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The most common misconception of marketing metrics is that it should be stated as an individual correlation between the entire marketing investment and the ultimate sales performance in an attempt to determine the return on the marketing investment (ROI). This approach provides only a lagging indicator of performance that could have been impacted by an almost infinite number of potential variables.
Instead, think of Marketing Metrics as tools to improve your performance, not just a report card on past success or failure. By breaking down marketing metrics into the sum of its parts, the results can provide the kind of information that marketing executives need to determine the real performance of individual elements and ultimately in aggregate how they impact the bottom line.
As a fundamental premise, marketing metrics need to be designed into the marketing chain as early in the chain as possible and at every significant tactical event. Understanding your sales closure rate doesn’t tell you how the client became aware of your offering, made the decision to contact you or realized the value that you bring to them. Whether you are tracking brand development, educational marketing, networking, direct marketing, tradeshows or specific targeted campaigns, you need to understand how often your marketing is being viewed and the perception of it, good or bad.
Metrics are most frequently initiated as a defensive reaction to senior executives probing for the effectiveness of last year’s marketing investments. Without metrics in place to define marketing performance, the marketing team will most likely get a smaller budget than the previous year. Consequently, marketing metrics are usually implemented as an after thought for many marketers, especially services marketers.
Let’s face it, if any team in any discipline within a business cannot define their contributions, why should the business continue to invest in that function. However, when it comes down to it, marketers are actually the lucky ones as they have the ability to design metrics into their work and use them to show the business as a whole how they contribute to the bottom line.
Metric Considerations
Marketing metrics can be designed as purely quantitative tracking such as views, calls, open rates or click-through rates, but not all the important information is quantitative. Designing in qualitative tracking is also a critical requirement to be able to dig more deeply into root customer needs and to be able to define more clearly the key reasons for the quantitative results. Creating the opportunity to make marketing as interactive as possible can also improve the frequency and quality of information to track your metrics. Ultimately, if the base of qualitative information is large enough, it can often be converted into statistical results and trends for quantitative reporting.
Call(s) to Action
In tracking marketing communications performance, I traditionally use a unique call to action for each tactic. If I am designing a direct marketing campaign, I make each wave of the series have unique contact information. Having a unique telephone number/extension and a unique URL will verify which direct marketing piece the customer/client is reacting to. This can also be used for advertising, sell sheets, websites and anything that includes contact information that you have in your portfolio.
Broader Metric Value
As previously stated, in addition to the obvious objectives of relating sales to marketing, well-designed marketing metrics should be able to tell you much more about how people react to your communications and what it really takes to get them to act. Understanding what works and what does not can help improve the effectiveness of future communications strategies.
As an example, it is common to send out a campaign with multiple waves of post card mailers that are spaced out on a monthly basis to create awareness and action on the part of the reader. One would expect that a majority of the readers would react to the first card and a decreasing number would react to subsequent post cards until there is little contact by the time the fifth or sixth postcard is received.
However, in evaluating the tracking based on the unique calls to action, the scenario on the part of readers in the majority of the campaigns I have managed looks a bit different than what you would imagine. As expected, a significant number of the motivated contacts come immediately after the first card is sent out. But there after, the campaign performance begins to deviate from the expected. During the second through fourth wave of the campaign, the contacts often plummet and one could assume that there was no need to continue the campaign, as it will yield little future benefit. But surprisingly enough, during the fifth and sixth wave of the postcard campaigns, contacts stimulated from the ongoing campaign takes a sudden and significant upturn that often approach the initial card performance. But the real surprise comes when you analyze the source of the contacts. In many cases, the tracking metrics show that the contact did not react to the recently received card, but to the call to action in the first card received.
At least two conclusions can be made from this example of the value of designing in marketing tracking and metrics. In the case of the direct marketing campaigns, many readers retained the original card as they apparently understood the value and postponed taking action until they had the time in their schedule or took the time to fully understand the issues associated with the offering. The fact that the campaign continued on until the reader was adequately reminded or motivated to react to the first card reinforces the justification that direct marketing needs to be a campaign and not a single touch point. Without adequate tracking metrics in place, you may never understand what is really occurring in your campaigns and consequently the full benefits of the campaign will never be fully realized.
Surveys and Focus Groups
As a tried and true tool, talking directly to existing or perspective clients/customers allows you to probe on a more personal level into the effectiveness or potential effectiveness of your marketing communications. Asking open-ended questions creates significantly richer knowledge of the marketplace perception of your brand and offerings. Tracking survey and focus group conclusions and trends can help you convert soft data into metrics that can be related to marketing performance.
Media Tracking
Many publications offer free or fee based surveys of your advertising awareness and comprehension. Knowing that a high percentage of the publication’s readers remember seeing your ad, but most of them drew the wrong conclusions from the message can be a very valuable tool. Enriching your contact data with qualitative information will allow you to use the information to improve your media performance in the future.
Conclusions
Marketing Metrics are not just a performance confirmation, they should be powerful tools to direct your marketing decisions and ultimately improve your bottom line through effective marketing. Keep in mind that without designed-in marketing metrics you may never know what it takes to motivate perspective customers/clients. Good or bad campaigns, you need to understand how and preferably why people are reacting or not reacting to your marketing. Avoiding experimentation and repeating failed campaigns will help hone in on the most effective methods for communicating your real and definable value to the marketplace. Ultimately, increased effectiveness yields better performance and a better return on your marketing investment.
Jim Payne is President of S-Market Strategies of Rochester, New York. He has more than 25 years of experience in all aspects of management and marketing. His innovative strategies, programs, and tactics have provided increased market penetration, growth, revenue, and profits for businesses of all sizes in segments such as IT, healthcare, consumer, entertainment, graphics, and government markets for both direct and channel sales.
For more information on creating Marketing Metrics or to learn more about the value that the S-Market Strategies team can bring to your services marketing effectiveness contact Jim Payne at 585-368-0567 or jimpayne@smarketstrategies.com and visit http://www.smarketstrategies.com
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jimpayne@smarketstrategies.com
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