Choosing proper marketing metrics March 27, 2014Posted by Mike Gospe in Marketing Operations, metrics.
Tags: activities & offers, cascading marketing metrics, goals, marcom mix, marketing metrics, objectives
A common question from marketers: what metrics should we track? There’s a lot of confusion and time wasted spent on measuring (the wrong) metrics. Here’s a model to help simplify the process.
If you are a routine reader of my books and blogs, you’ll notice that I am a stickler for words. As marketers, that is really all we have. So, when setting the right metrics we need to consciously, clearly tell our executives and staff what we really mean. But we need to first deal with confusion around words like “campaign” vs “programs” vs “activities” versus “offers.” (See the blog post, The confusion regarding the word “campaign”, or my book, Marketing Campaign Development for examples.)
So, before we can decide which metrics are most appropriate to track over time, we need to understand what exactly we are trying to achieve. Many marketers tend to focus on metrics that are easy to measure, rather than on what metrics will help them make the best forward-thinking business decisions. For example, some marketers believe “the number of press releases generated each month” is a valuable metric. It is not. This metric means nothing because it is not linked to “newsworthiness”. This may be a good measure of personal productivity, but it says nothing of the quality or ROI of that activity or the outcome. If this metric were true, a PR manager could generate a dozen press releases on garbage. Yes, the metric would be achieved. But, what impact did that activity have on the business? It’s unknown. And, actually, pursuing that metric might actually damage the company’s reputation. While the following are examples of personal productivity assignments, framing them as a marketing campaign, program, or activity metrics is inappropriate:
- To generate 12 press releases, one per month
- To launch a new website in September
- To generate 1,200 leads
- To implement Google Adwords
- To update collateral pieces by May 31
- To hire a new director of marketing before the next board meeting
In order to best answer the “what metrics should we measure” we need to understand how the marketing department’s activities and metrics help the company achieve its business goals. The business goal is the impetus against which the marketing team, and all other departments, needs to align their plans. These goals will ultimately guide the team’s behavior as well as the determination of the campaigns and programs needed to support the business goal. This is what I call the model for cascading marketing metrics.
Directly underneath the business goal is where our campaign objectives reside. Underneath that, we will have the various program objectives that support the campaign. Whereas the campaign’s objective should be a single objective broad in scope, the program objectives may be multiple and more narrowly scoped. And finally, underneath the program objectives are the many tactical marketing activities and offers that are the building blocks for the marketing programs.
Although every marketing activity may also carry its own set of “personal-productivity” and “results-generated” metrics, it is important not to get too tangled and overwhelmed in the weeds. We must avoid the point where analysis paralyisis invades our thinking and sucks us in the black hole of indecision.
Here’s an example of what cascading marketing metrics look like:
1. Business Goal: to generate $100M this fiscal year. (It’s everyone’s job to help achieve this business goal. It’s a shared goal that should encourage organizational alignment. It’s not a marketing department-only goal because marketing cannot control if and when a sale is made.)
2. Marketing Campaign Objective to support this Business Goal: to grow North American market-share by 15% within 18 months. (This goal is something that can be owned by the marketing department. Notice that the objective has a specific result that includes a measure and a timeframe. All of the marketing programs, activities, and offers need to ultimately support the achievement of this campaign objective.)
3. Marketing Programs Objective: to launch an aggressive competitive replacement program aimed at The Widget Company’s installed base, converting 500 new customers in Q3. (There may be several different programs in place that work together to support achieving the Campaign Objective. There are 7 types of marketing programs: awareness, competitive replacement, cross-sell/up-sell, migration, new customer acquisition, nurturing, and renewal. Each type will have it’s own set of appropriate activities, offers, and metrics.)
4. Marketing Activities to support the Program Objectives:
– Digital ads + social media + speaking opportunities + website: Increase awareness of and preference for our product with CIOs and VPs of network security by 50% each year, as reflected in awareness levels shown in our company’s annual awareness study (in reference to the baseline survey conducted last year). (Awareness is usually never the result of an isolated marketing tactic; it’s a combination of activities that constantly reinforce your messaging. Therefore, any metric should focus on the outcome, not the tactical “how many ad placements” that may be required. The number of ad placements is an important tactic, but it is not the best metric. The measure of success is what is important. Have we achieved a 50% improvement in awareness by the end of the year? That’s the metric worth measuring. If we meet the metric, we can then talk about continuing the efforts. If we miss the metric, we can have a conversation about why — was it lack of budget, competitive pressures, timing?)
– Sales development: Use our inside sales team to mine The Widget Company’s installed base, producing 15 new qualified leads per month, beginning in April. (Again, notice the metric has an outcome, a run-rate, and a timeframe. Operationally, you’ll want to manage the productivity of each inside sales team member. However, to know if the activity was beneficial, we need to know if the desired outcome was achieved — hence, 15 new qualified leads per month.)
– Whitepaper promotion: Generate more than 100 web hits per month and convert 10% to sign up for a demo via the promotion of a new independent competitive comparison report showing use cases and results of our product versus The Widget Company’s product. (Here, the marketer needs to do whatever it takes to promote the whitepaper so that a minimum of web traffic is achieved resulting in a 10% conversion rate.)
These are just some simple examples. The metrics you choose will be unique to support your marketing objectives and business goals. In summary, when considering what metrics to track, follow these 4 guidelines:
- Track only those metrics that will help you make decisions. Focus on the outcome, not on measures of personal productivity.
- Avoid getting caught in the weeds. You don’t need a metric for every step of every process.
- Avoid the “more is better” trap. It’s better to focus on the few metrics that really matter. Otherwise, you’ll go cross-eyed.
- Choose “what is right” over “what is easy to measure.”
For more insight on metrics, measures, and marketing dashboards, please refer to Marketing Campaign Development.