Tuesday, November 10, 2015

Measure What Matters


Digitization has increased the marketing touchpoints in a customer journey before marketers can find a quality lead or a make a sale. How can we ensure that our investments are working and if we are better connecting with our customers? The answer lies in better measurement. To achieve more Marketers should determine their measurement foundation first before they dive into the creative work.  There are four components that can help Marketers build a strong analytical foundation for their campaigns: 

 

Selecting the right metrics

In picking the right metrics marketers should ensure that the metrics they select are aligned to the goals which determine the success of their campaign. Picking metrics that resort to measuring lower tier indicators will lead to an irrelevant understanding of the success of the campaign. If your company’s biggest goal is to increase profits then you should show how your campaign contributed to the profits. If your goal is to generate online leads than lowering your cost per acquisition (CPA) might also lower the quality or volume of your leads and eventually driving down your revenues and profits. In this case you might need to create a new metric such as cost per high quality acquisition.

Next factor to focus on in picking the right metrics is the context. Suppose you launch an online video and you get ten thousand views. How do you really know whether that number is a good number or a bad one? May be you should compare your video to similar videos and determine your success. You might also think about the creative goal behind your video. If you launched the video to spread awareness, were you able to achieve that? It is important to look at your metrics in the context of comparable benchmarks or success criterion to drive value from them. 

The final point is to ensure that you have reliable data to keep track of your results and drive your metrics from. Your metrics will be as good as your data. You can use the appropriate analytical tools for both online and offline channels to be able to collect accurate data that will give you an insight about your performance. The more reliable your data is the better you will be able to respond to the needs of your customers.

  1. Have I selected relevant metrics and benchmarks to measure marketing success?
  2. Do my marketing metrics align with business goals such as revenues and profits?
  3. How can we break down silos and make teams jointly accountable?
  4. Do I have the right measurement tools on hand?

 

 

Value your best customers

As much as it is important to know what to measure it is also important to know who to measure. And instead of measuring the customer transactions alone it is important to model the life time value (LTV) you derive from your customers. For example, it is quite possible that 20% of your customer drive the 80% of your sales (80/20 rule). And focusing on getting to know these 20% customers better can help you distinguish between your ‘whales’ form the ‘wasted energy’. And as you start to know your customers more, remember that the customer journey is constantly evolving and you will have to constantly adjust your campaign to continue to connect with them.

  1. How much do I really know about my customers? Have I defined “customer” clearly?
  2. How do I acquire more customers who resemble my best existing customers?
  3. Do my advertising investments align with my strategy to reach and win the “whales”?

Attribute value across the journey

Marketing attribution can be broadly defined as dividing up the value of an online conversion across the different touchpoints that led to that point. Attribution helps you understand what is working in your marketing and what is not. It can help you understand and optimize your different marketing channels and how they are influencing your customers so that you can not only adjust your investments but also your strategy. Attribution is backward looking and will not be able to tell you if you have used a new channel in you campaign. To get the most out of attribution marketing tools can be paired with the channels.

  1. Am I measuring and valuing all of my customer touchpoints, both within channels and across channels?
  2. What does the full customer journey to conversion look like for my business?
  3. Am I applying attribution results to improve my investment decisions as well as my customer messaging?

 

Prove marketing impact

Ultimately the right metrics, the right customers and the right channels all have to lead to an impact that the business is striving to achieve. And as a marketer you should be able to clearly demonstrate the effectiveness of your campaign to manage the perception of the investment among senior executives as well as to ensure marketing is seeing as a revenue driver rather than a cost center. The best method to prove the impact is through causal measurement. To show causation, you have to experiment that are well designed and statistically robust with a clear test group. These experiments should be on going and iterative. To get a feel for the types of hypothesis that you want to test keep up to date on industry trends and consumer studies. Through this process you should strive to show that the marketing department or your campaign is fattening the bottom line and use what you learn to validate your own investment plans.

 

  1. Am I relying on correlations, or can I base my decisions on measured causal impact?
  2. Do I know the incremental value of each of my media investments?
  3. How can I incorporate experimentation to prove the value of my marketing, including new channels?
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