Christine Pilkington is the CEO and founder of Crisp, a fractional CMO and contract marketing services firm based in Vancouver, Canada.
Using data to track progress is an essential aspect of marketing. But nowadays, with the wealth of numbers available to report on just about any channel or digital behavior, measuring and optimizing for the wrong things can cost you time, effort and budget.
A rise in vanity metrics (those stats that look good on the surface but might not hold up to analytical scrutiny), such as likes, followers and impressions, might make us believe we’re impacting customer behavior. However, this is often a distraction from more meaningful data points.
The good news is that there’s a simple solution to the noisy reporting problem. To avoid misdirecting marketing efforts and obfuscating progress, focus on tracking and reporting the metrics that align with business goals, rather than treating metrics as an end in themselves. In other words: Collecting more data doesn’t necessarily lead to generating more insights, and just because you’re capturing attention, it doesn’t mean you’re driving the right business outcomes.
How To Measure What Matters
There’s a common adage in the business world: “What gets measured, gets managed.” It’s often cited in pithy praise of analytics, but I believe it should also serve as a warning to those who tend to overfocus on data without the context to anchor it. What happens when you try to micromanage too many things at once? You mistake tactics for strategy and end up missing the forest for the trees.
So what should you be measuring? The specifics will differ from business to business and industry to industry, but your north star for determining key metrics should be your business goals themselves, and what is likely to indicate meaningful impact or progress toward them.
For example, a B2B company looking to grow revenue might focus on:
• Pipeline growth
• Customer acquisition cost (CAC)
• Customer lifetime value (LTV)
• Percentage of revenue attributable to marketing activities, like conferences or webinars
Meanwhile, a B2C company aiming to expand its market share would likely keep an eye on:
• Branded versus non-branded search volume
• Return on ad spend (ROAS)
• Number of orders driven by different channels and activities
This is not to recommend that you should only be monitoring three to four metrics as a business, but rather, to illustrate what kinds of things meaningfully ladder up to broader marketing and business impact. It is also useful to track additional metrics as at-a-glance pulse checks or early warning indicators. The trick is not to get too caught up in optimizing them, nor individually overemphasizing them without understanding their part in the broader story you’re telling.
Rooting Marketing In Business Context
Although this seems relatively simple, there’s another common pitfall that many companies (especially smaller ones) stumble into: not letting marketing in on business goals in the first place.
Unfortunately, marketing has developed a bit of a reputation as a cost center, rather than a revenue-generating department. This is typically because marketing isn’t given a seat at the senior leadership table or privy to larger conversations about broader business vision and direction.
But when marketing is empowered to operate with a clear strategic vision in line with business goals, it’s able to drive business success rather than act as a disconnected department struggling to articulate its value.
Driving And Communicating The Results That Matter
Assuming your marketing team has a solid understanding of business priorities and is measuring the right things to track their progress toward them, the last piece of the puzzle is creating a well-structured reporting system to communicate the relevant metrics and put them in context.
Every dashboard should help marketing leaders answer three key questions:
• Are marketing activities impacting revenue?
• Are we operating efficiently?
• Are these activities driving meaningful customer actions?
Reporting systems should also measure leading indicators (like web traffic, engagement or pipeline growth) as well as lagging indicators (like revenue, LTV and customer retention) to provide a full, connected picture of the marketing funnel.
Perhaps most importantly, every report should help the team guide action, not just summarize past activity. A savvy marketer should be able to read the data and translate it into next steps, whether it’s adjusting the overall strategy, optimizing campaign spending or pulling the plug on an underperforming activity.
Marketing As An Engine Of Business Growth
Evaluating which marketing numbers matter to the business can go a long way in transforming marketing’s role and impact, but it also takes a shift in mindset to drive results. A strategic marketing department will be proactive and growth-oriented, rather than caught up in individual channels and activities.
So, before you dive into dashboards looking to weed out vanity metrics, ask yourself if the marketing department is equipped with the right information to prioritize what they need to measure—and most importantly, why.
Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?
Read the full article here
