The Urgent Need for Marketing Metrics
Can I be honest? Numbers scare me. Well, at least they used to. I blame grade-school teachers who diligently tried to teach me algebra, but when asked, “Why do we do it this way?” would reply, “Cause, that’s just what we do.” A thoroughly dissatisfying answer.
However, over the years I’ve come to embrace, respect and even like numbers. Perhaps spending a few years as a programmer or the need to help my daughter with her algebra homework gave me a new appreciation for numbers and data.
And, as my career has advanced, I’ve come to rely on numbers to understand everything from media effectiveness to consumer preferences. How would our business survive without data? While numbers are now my friend, I have to share three quick caveats about data before we go any further.
Data is not insights.
Data answers the question, “What?” while insights answers the question, “So what?” Just having access to numbers, quite frankly, does not solve the challenges you may be facing as a marketer. All data must be put in context. What was happening at the time? How does that compare to last year? What changes have we made in our communication?
For about four years we worked with an extremely data-driven, international entertainment company. After several rounds of reviewing the numbers that appeared on the dashboard we built for them, we realized how susceptible their business was to events such as weather, news or unexpected financial changes in the world. From that point on, their dashboard included a current event module outlining recent data influencers from weather sources and news feeds.
Data is not the only way to judge success.
We are still humans selling to humans. And, it’s no surprise, humans do unexpected things. They make odd choices. I’ve always been amused by Sherlock Holmes stories. The most minute behavior reveals a mountain of understanding for Sherlock. Oh, if only it were so in marketing. If only one little bit of data could predict exactly what a consumer would do. Let me give you a personal example. I’m left-handed. That is to say, I write with my left hand. I kick with my right foot. I mouse with my left hand, I hammer with my right hand, I bat right-handed, I shoot a basketball right-handed, I saw left-handed and I shoot a gun right-handed. I would have driven Mr. Holmes nuts as he tried to figure out whether I had committed the crime based on where my fingerprints were left. But my unpredictable behavior is more analogous to our consumers than the predictable behavior in a short story.
That is why any marketing dashboard should include many kinds of information, including the results to key research studies such as a segmentation, attitude and usage study or competitive analysis. We’ve found this is particularly effective when videos of customers are available through the dashboard. Qualitative data being included as an element of your dashboard is a great way to keep the consumer in the room.
Data can be dangerous.
The third warning I’ll share is the danger of vanity metrics. Vanity metrics are those numbers that might make us feel good but really don’t help us make smart decisions. For example, page hits, follows, friends and page ranks are only a few metrics that can make you feel good while telling you very little about the impact your marketing is having. There are good metrics that are immensely helpful, and we’ll get to that later in this article.
Enough of the negative. What are the benefits of a good marketing dashboard?
Data can facilitate accountability.
Recently we were meeting with a new potential client. It was music to our ears to hear him say he wasn’t concerned about specifics of how every penny is spent, he just wants to have an assurance that his brand’s core Key Performance Indicator (KPI) is being consistently met. And, if it isn’t, he would want to meet as a team and make adjustments moving forward. That is perfect! That means this client is focusing on the right things as a marketing leader in his company. Now that’s accountability at it’s finest.
It seems as if today every marketer is tasked with providing their board, shareholders or company with the results of their marketing efforts. We’re all being asked, “How did we do? What worked? What didn’t?” And we welcome that.
Data can optimize success.
By going through a diligent process of defining our objectives, goals and metrics, we can put a stake in the ground and measure against it. But what should we measure? Agencies and clients need to align on what the goals of every campaign are and how they fits into the overall business challenges. Way too often we hear from new clients or prospects that there has been no measure of success in previous efforts. Surprising, but true.
Of course, each company is different, and the objectives and goals will vary, but here are some of the key metrics that should be considered:
- Store-level sales performance data
- POS daily summary data at store level
- Customer-acquisition cost
- Return on investment (ROI)
- Most recent Net Promoter Score
- Loyalty-program data
- Call-center data
- Lead-generation funnel
- Gift-card sales data
- Email-performance data
- Google Analytics
- Results of research, both qualitative and quantitative
This list is by no means exhaustive, but it is a good start.
Data can be an early warning system.
German military strategist Helmuth von Moltke said, “No battle plan survives contact with the enemy.” Wise words that apply to marketing plans as well. By having a real-time marketing dashboard, that is to say, a dashboard that reports numbers as they are rolling in, marketing decision makers can make adjustments as reality teaches us new things.
Three important questions:
- Is your agency taking the lead on success metrics? If your agency is unwilling to be measured or—I’ll take that further—if your agency doesn’t take the lead on measurement, you may have the wrong agency.
- Have you defined your KPIs? Even if you can’t get all the data points you would like, start now to gather the most critical results. Remember, some data is better than no data.
- Are you set up? Do you have a way to track sales, weather (if relevant), consumer segments and all other performance indicators? While there are lots of dashboard software solutions, clients often find it too hard to decipher how they will do it on their own.
The first step is to take a stand and outline everything you want measured, then begin to identify the sources of the data. Make your agency accountable for how to make it happen. You might find yourself sleeping better at night knowing your advertising is working.
If you feel overwhelmed, we’d be happy to share our approach.