In God We Trust…Everybody Else Better Have Numbers to Back It Up
When it comes to marketing communications as a business discipline, owners and executives have had a love/hate relationship with marketing from the start.
They love the fact that it can drive sales, they hate the fact that they can’t effectively measure it. As John Wanamaker famously said, “Half the money I spend on marketing is wasted, the trouble is I don’t know which half.”
Anybody involved with inbound marketing knows that this paradigm is no longer valid. Marketing today can, and should, be among the most measured and attributed disciplines in your business. Today, we can identify, track and measure conversion paths to:
- Ensure the effectiveness and ROI of your marketing efforts
- Identify early warning signs of trouble, before they happen
- Continually gain insights that let you dial in and improve your marketing results
What’s scary is that many marketers don’t measure. The studies I’ve come across indicate that as few as 1/3rd and as many as 2/3rd of marketers aren’t measuring their efforts consistently. My experience working with small and mid-market (SME) is that the number for SMEs is closer to the 2/3rd.
The Case for Measuring
Outside of the well-known axiom, what gets measured improves; the failure to measure is devastating for two primary reasons:
- First, you are certain to be wasting money. You simply can’t go with your gut, as your gut is increasingly wrong.
- Second, the opportunity cost is HUGE. Every day, I’m surprised by at least one set of numbers. A blog post we do for a client that we think is tertiary turns out to get crazy traction, or a social media platform proves to be far more effective that we thought it was. I’m a pretty intuitive person, but I’ve learned that by looking at the right numbers every day, I get smarter without even trying.
What Should You Measure?
The trick lies in understanding which KPI's (Key Performance Indicators) are important for you to measure and why. I’m convinced that the primary reason most marketers fail to measure is because they get overwhelmed at this point.
The first step is to narrow down your focus and clearly define your objectives. Do you want to:
- Enhance your brand?
- Increase leads?
- Drive more sales opportunities?
- Build loyalty and word-of-mouth?
I know what most of you are thinking. “We want to do all four!” And that’s where the seeds of failure are sewn. Unless your marketing effort is highly sophisticated and resourced, you must focus on one primary objective. In more sophisticated efforts, you can add a second.
For example, at Imagine (and for many of our clients), increasing leads is the primary focus for our marketing efforts. With that focus, we know to select KPI's that are indicators of a prospect moving through the funnel.
Here are some typical KPI measurements you would use for each focus:
KPI'S for Building Your Brand:
- Website visits
- Social reach
- Time on site/ time per page
- Video views
- Ungated content downloads
- Blog subscribers
- Email newsletter subscribers
- Inbound links
- Blog comments
KPI's for Generating Leads:
- Gated content downloads
- Event attendees
- Webinar registrations
- Marketing qualified leads (MQLs)
- Sales qualified leads (SQLs)
- Conversion rate
- Average lead quality score
KPI'S for Converting Leads Into Sales:
- New customers
- Top-converting pages
- Conversion rate
- Content asset ROI
- Cost of customer acquisition (COCA)
KPI's for Increasing Loyalty:
- Customer lifetime value (CLV)
- Product/service upsells
- Social sharing
- Newsletter subscribers
- Email forwards
Be sure not to measure too many KPI's. Keep your list to no more than 5 – 7 indicators. By measuring too much, you actually end up measuring nothing at all (we like to descibe this as measuring "KP Lies"); and worse, you add complexity to the puzzle.
If you’re new to measuring, don’t worry about analyzing your numbers. When you’re first starting off, the key is just to track them consistently. Build at least three months worth of data before attempting to read into what the numbers mean.
As the data builds, you’ll naturally change some of your indicators and gain the ability to adjust as you go.
What KPI’s do you rely on most to measure the success of your marketing efforts? Share in the comment section below!