By Eric Wittlake, {grow} Contributing Columnist
We’ve all seen it. We’ve probably all done it. Maybe as recently as today (gulp).
“…and our click rate is 30% above the benchmark!”
Click rate? No one cares!! Yet this isn’t uncommon. We are still reporting back to the business we are charged to support using metrics that don’t matter one bit to the business. Opens? Clicks? Likes? Yikes!!
We can’t become results-oriented marketers when these are the results we are looking at! But this is the next place many marketers fall down: identifying better metrics isn’t enough. Here are the three steps that have worked for me when I’ve followed them (and I’ve regretted when I stopped after just the first step or two).
1. Find the right metrics
Better metrics start by answering a pretty simple question: would you spend money to change that number?
You are investing time and money into your marketing, you need measure what justifies that investment!
There is, of course, an obvious answer for many of us that meets this test: profit. And a few of you really can measure marketing ROI directly against incremental profits. That’s awesome. But sometimes measuring marketing ROI is impractical.
For the rest of us, we need to work backwards to find metrics that are as close as possible to the results the business values. These should be metrics that we can observe with reasonable accuracy and relatively quickly (we want to be able to act on what we learn from our measurement). In some cases, this will be a direct measurement and proxy for your ultimate goal. For example:
- Ecommerce companies can measure against gross revenue.
- SaaS companies can often measure against product trials.
- B2B marketers may measure against qualified leads.
In other cases, it will be something that has been identified as a key barrier to increasing revenue and profitability, such as awareness or perception.
2. Sell your metrics
You are investing time and money to change a number, and next year you will be asking for more resources in order to make a larger difference. The business needs to understand how you will be measuring the effectiveness!
Be prepared to support your recommendation. For instance, everyone may not agree that increasing trials is important.
- “We get too many tire kickers.”
- “How will we know if they are actually buying?”
- “Decision makers don’t download trials.”
You will need to show your measurement is an effective proxy, through historical data, research or even that marketing favorite, creative storytelling. However you get there, your organization needs to be on board with the idea they are investing in order to change this one number and believe revenue, profits and long-term success will flow from there.
3. Check your metrics
You will almost certainly be measuring against a proxy or intermediate metric. Even though you cannot measure against revenue or profitability in the near term, but that is no excuse for not crunching the numbers from time to time to prove your efforts are making a difference. You need to follow leads through to sales, revenue through to returns and profits, trials through to purchase and retention.
Each time you do this, you validate the goal you are managing against is driving revenue and profitability.
Yes, it may take months to see the ultimate payoff. It may require manually consolidating data from disparate systems. But if you don’t, you will eventually lose support for the goals that you originally secured in the second step above.
Your Turn
Ok, let’s hear about the flip side of this: what are some of the worst metrics you are seeing marketers rely on today? Share your answer in the comments below or with me on Twitter (@wittlake)!
Photo Credit: Skakerman via Compfight cc