The CMO Survey asks marketers to share their actual performance and future goals for each administration of the survey across a range of metrics: market share, sales revenue, profits, marketing ROI, customer acquisition, customer retention, and brand value. I took a look at what is happening with these metrics during this rough economic period.
1. Companies consistently fail to achieve the marketing goals they set. I compared the 12 month goals that were set in one time period (e.g., August 2010) to actual company performance one year later (e.g., August 2011). I did that consistently over the four time periods for which I have data. Looking at the difference between the two, companies achieve approximately 48% of the goals they originally establish. This difference was lowest in February-2010 (31.4%), increased in August-2010 (44.1%) and February-2010 (58.9%), while flattening in August-2010 (57.8%). Therefore, although companies do not perform at 100% marketing goal levels, they are achieving a bigger percentage of their marketing goals as we climb out of the recession.
2. Marketing goals are increasing modestly. One theory about a narrowing performance gap is that marketers went soft on goals and didn’t ask as much from their companies. That does not seem to be the case. Table 1 contains the change in marketing goals for each survey across time. Although there is variability by period and by marketing metric, there is a surprising consistency and perhaps even a slight increase in the goal level chosen as you can see from the average goal over time: Aug-2009 (5.0%), Feb-2009 (4.5%), Feb-2010 (5.4%), Aug-2010 (5.2%), Feb-2011 (5.4%), and Aug-2011 (5.6%).
3. Performance on marketing metrics has increased. A second, more encouraging, interpretation of a narrowing performance gap is that marketers performed closer to their stated goals. Table 2 shows that this is a more likely explanation. Actual change in performance dipped in the trough of the recession to an average performance increase of 1.4% in February 2010, a 50% reduction y-o-y from February 2009: 2.8%. However, results climbed from there to a high of 3.2% in February 2011 and stayed flat.
4. Goals for the subsequent period always rise relative to current performance. Here is how it works in the survey: Marketers are asked to rate their company performance on each metric and then are asked to rate their company goals for each metric for the next 12 months. Across the time periods, marketing goals have been an average of 2.8% higher than marketing performance in that period. This difference was at its lowest in February 2009 (1.8%) and picked up at the worst time in the recession, February 2010 (4.0%) and leveled off at 2.4% this August 2011. It is interesting that the goals have actually increased as the recession deepened. Perhaps to inspire? To urge stronger effort?
The August-2011 CMO Survey reported the following increases in marketing performance goals over the next 12 months: market share (4.9%), sales (6.8), marketing ROI (5.3), profits (6.0%), customer acquisition (6.1%), customer retention (4.2%), and brand value (5.8). If the observed marketing goals-performance gap trend holds, companies should achieve the following performance outcomes: market share (2.8%), sales (3.9%), marketing ROI (3.1%), profits (3.5%), customer acquisition (3.5%), customer retention (2.4%), and brand value (3.3%).