Simplifying Marketing Metrics to What Really Matters
Today is quite unprecedented for most organizations. Unfathomable amounts of data are being collected, collated, and categorized (in real-time) on prospect and customer behavior. While this is exciting to many it also presents a huge challenge for marketers. Although much of this data may prove insightful and actionable – much of it likely will not.
Now, more than ever, marketers must measure the right things with the right perspective in mind. Too often, executives rely on metrics that look good in reports, but in reality, do very little to impact the business’ goals or upward trajectory.
While the responsibility for developing effective and relevant marketing metrics rightly belongs to the Chief Marketing Officer (CMO) and marketing team, executive management should also challenge marketing to measure what really matters. All organizational leadership should ask deeper questions regarding metrics:
What are the right marketing metrics to measure?
Why is it important that we track and measure this?
By measuring this what can and should we expect to learn?
What proactive or corrective actions can or should we take as a result of measuring this?
What else should we be tracking and measuring?
Marketers often feel great internal and external pressure to measure everything. If marketing is measuring everything, it is in essence, measuring nothing. Instead, marketing should pay more attention to prospect and customer actions that can be measured to help the organization better understand their behavior and journey. In general, marketing should measure whether its efforts are moving the organization in the right direction through customer acquisition growth, increased revenue per existing customer, customer retention rate, etc.
For marketing to truly be effective and relevant it must know exactly what to measure and influence. For this to be the case, metrics, or key performance indicators (KPIs), must be understandable, trackable, and actionable for marketing to be invaluable to the organization.
Understandable: The data variables marketing measures need to make sense to the those collecting the data, as well as to those using the data to make insight-driven decisions. (Metrics that are too complicated or convoluted are not useful or actionable and consequently reflect poorly on marketing.)
Trackable: Look at data that’s relevant and trackable. Relevant data that is easily and readily available provides a means for constant reporting cadence. (Avoid measuring or spending much time tracking granular data points like number of followers, shares, opens, clicks, etc. This data, while helpful to a point, is too granular to warrant executive level reporting.) Relevant data can be reviewed from one week, month, or quarter to the next. Regularly accessing relevant data requires organizations to tie multiple data sources together from marketing automation to CRM to customer support systems. The key here is dependability and accuracy of integrated data sources.
Actionable: Metrics should provide useful, actionable information that impacts the organization. Monitoring and seeing that metrics have gone up or down indicates that something has changed. However, what’s more important is seeing how that change is connected to specific actions taken by marketing.
The purpose of metrics is to help organizations be disciplined in what they measure and the resources deployed to influence those metrics positively. The more clearly marketers know what to measure the more likely they are to focus their efforts on positively impacting the organization. The right metrics, such as calculating the potential lifetime value of customers, will help marketing distinguish which customers are likely to be the most profitable over their customer lifecycle. Measurement is what makes marketing a science-driven effort, rather than just a creative art. Choosing the right metrics for measuring marketing success is more critical than ever before. No matter the industry, business model, revenue, size, or maturity of your organization, measuring what matters for the organization should be marketing’s top priority.
About the Author
Bray Brockbank is CMO and VP of Strategy for Brandegy, a specialized brand and digital marketing agency for technology companies. Bray has led marketing efforts for a wide range of B2B and B2C tech startups to tech enterprises.