Q&A with Beth Comstock (GE)

 

 

How does one of the world's biggest, most diversified companies approach the challenge of measuring marketing effectiveness? MarketingNPV editors caught up with Beth Comstock, General Electric (GE)'s CMO, to find out.

MarketingNPV (MNPV): How does GE relate marketing investments to financial success? Is there a specific approach you use to determine the return you get on marketing expenditures?

Beth Comstock: I would say that we haven't figured it out yet. But we are putting a lot of energy into it.

At the end of the day, we believe that marketing is responsible for top-line growth -- that's it! You will be able to see fairly quickly if marketing is making a difference or not. Because the company is made up of very different businesses, we centralize some marketing functions such as skills building, tools, and processes. Then each business has its own marketing team that needs to react differently to its industry. Consumer finance will have different metrics than the aircraft engine business. What we try to do with measurement is focus on the broad indicators of top-line growth and translate that for each business unit in terms of what they have to do to move those levers. By the middle of this year, we are going to decide on some broad GE-wide metrics that not only the marketing people would be responsible for but the business leaders would be too. That will be a big change for us.

MNPV: So do you try to gather and decipher all these business-specific metrics and relate them back to revenue growth? How do you present that in a way management can understand and accept?

 

Comstock:Today we still do it at a fairly high level. The trick is to aggregate it in a way that means something to the company but doesn't become so constrictive that the business says, "If I'm only measuring this, I'm not measuring that." In the case of our corporate brand campaign, obviously we want to drive familiarity, awareness, and favorable perceptions. But in the end we have to ask, "Are we selling more?"

We are looking into the broad categories of market impact: "What kind of customer impact are you having? Can you measure the degree to which you are helping your customers make money? What impact are you having on your own business? What are the various levers there? Are you driving revenue? What is the margin impact? What is our share of market? Those are some pretty standard measures we're exploring, but at this point we don't do it as part of an ongoing process. We are still mainly project-specific, so we tend to tie metrics to specific initiatives like products launches or a campaign debut.

MNPV: Where does that legendary GE Six Sigma ability come into play?

Comstock: Like most companies, we must prove that marketing is needed. Our business leaders have recruited great marketing teams that really want to be measured. Our whole company wants to be measured. We grew up with the whole Six Sigma rigor, and we love measurement. If marketing can't be measured, you begin to feel like you aren't going to contribute to the company needs.

I think part of our challenge is that not everything needs to be measured, yet we tend to want to measure everything . We spend a lot of time asking ourselves which metrics are meaningful and which we shouldn't worry about. But we do have an inherent advantage because of the Six Sigma rigor that we have, and our people automatically think, "What's my return?" which is great.

I'll give you a good example. Within the past six months, we kicked off a company-wide effort, led by marketing, that focuses on top-line growth. At the end of last year's budget process, each of the businesses was told, "I want you to come in with five new ideas that are going to organically grow $100 million dollars each in the next three to five years." Obviously, some ideas are going to start to grow in 12 months and others in 24 or 36, so the process will help us learn how to track that growth and at what critical points the plan is most vulnerable. A marketing person can't say to his or her business leader, "I have this great new idea, but it will take five years to get there. Give me X dollars of funding, and I'll see you in five years." That's not the way the world operates. We've developed an intense focus around nurturing growth ideas and learning from one another how measurement might help jump start an effort.

Having said that, we still wrestle with how much measurement process is too much for marketing. How do you keep the creative element in there and prove that marketing can really grow top line? How does marketing create growth as a process? That's what marketing's call to action is right now: creating growth as a process and allowing that process to define just enough so that you repeat it again and again but not have it so tightly constrained that you don't allow for the creativity that develops the necessary big-picture view. We haven't figured it out yet, but that's where we are headed.

MNPV: So where does the Six Sigma piece fit in?

Comstock: Six Sigma helps us understand the tools we need and how to apply them. We still need a strategic mindset to identify exactly what we are trying to accomplish and identify the hypotheses to test. The tools help you validate it.

The challenge is what marketing people think when they encounter Six Sigma. For those who may have had a bad experience with it or who think it's too rigorous, we try to reinforce that marketing isn't going to succeed if the entire job is to do Six Sigma. You still need the business leaders to paint the picture; the visionary in marketing to say, "Here is where we are going;" and then Six Sigma to figure out how you are going to get there.

MNPV: So, is this an exciting time for you in your career as see these things happening?

Comstock: I would say that for us, the folks in marketing, this is the most exciting time we can imagine because we are building a function across the company. We have always had marketing here, but it's fallen in and out of favor, and production has taken away some of its metrics. I think we are just trying to find balance between sales, product development, and marketing. In marketing, we have a strategic role to fulfill and we have top-line gross we have to deliver.

If you have been a predominately sales-focused team like we have, sales tends to absorb a lot of this, which isn't their job. You need to free the sales team to get out there and serve the customer and help understand what the customer needs. Marketing has to interpret that feedback, which makes us a great partner for sales. We can take a large amount of data and make sense of it quickly. If marketing could come in and say to sales, "Look, if you are seeing one in 50 leads close, I am going to help get it to one in five," that is huge value added.