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Defining marketing metrics that matter

Is your marketing data producing the results your business expects? According to a recent report from
The CMO Survey, the answer is probably not. Marketers plan to increase their analytics spend 200%, but that spend isn’t expected to drive much of an increase in performance.

It is clear that the desire to increase the use of data and analytics in marketing exists. However, the majority of companies are not sure how to track and utilize data effectively in marketing. These findings are consistent with what The Reference has seen in the market. How does an organization move from collecting data to using it effectively?

The Disconnect

business analytics that matter

To understand the problem facing organizations, it is helpful to understand the current state. Most businesses are using some form of analytics tracking. For example, every company has Google Analytics tracking on their website. Many companies are collecting data from additional sources, such as a marketing automation platform, social platform or CRM. The initial disconnect comes from not using the data available.

If a company has the data, why aren’t they doing anything with it? Most people, when faced with too many choices, make no choice. There is too much data available to know how to use it properly, so it continues to accumulate while the marketer waits for a solution. This can be either an AI solution that can sift the data for them, or the hire of a data scientist. Unfortunately, this creates a negative feedback loop because you have to prove marketing is effective to get more budget for new tools or staff.

Another area that is a concern is the data that is being tracked. Statistics from databox shows the top 3 marketing metrics being tracked in Google Analytics are users, bounce rate and sessions. While these data points can be valuable, it is very difficult to link any of these metrics to results.

Overall the problem is knowing what to track. How can a marketer know what is valuable data? The CMO Survey shows that 50% of marketers use analytics in their decision. Yet, the impact has not been what is expected. The problem here is not with data, but the metrics tracked with the data.

The disconnect leads to another problem. Marketing is viewed as a cost center and not revenue center. From a C-Suite perspective this makes sense. How is marketing impacting the business? Without the proper marketing metrics, the question of business value is impossible to answer. Metrics are tracking more soft data like increased traffic or engagement. You cannot tie that back directly to revenue or other metrics.

Find the right marketing metrics

If we agree that there is a disconnect between the metrics and value, how do we close the loop? The easiest way is to focus on your customer. For a marketer, the customer is sales and the C-Suite. Sometimes the goals of an organization are apparent. Sometimes it is unclear. The goals can change depending on business units as well.

Don’t be afraid to interview your clients. What you are looking for is information detailing the results that are expected by the business. For example, a sales person may tell you that their quota has been increased by 10%.

Think in the form of questions that your clients may ask. Here are some common examples:

  • How much has our marketing increased top line revenue?
  • How much has our marketing increased our bottom line?
  • What is the number of new customers that marketing generated last month?
  • Has marketing helped to decrease the amount of time it takes to close a sale?
  • What is level of increased awareness generated by marketing for a new product line?

Once you have your list of goals, you can create a list of marketing Key Performance Indicators. Don’t be afraid to get it wrong. Expect to adjust over time to dial in your KPIs. The objective is to get your analytics on the correct path to better answer questions on how marketing is performing. You will begin to gain insights, deliver more valuable marketing reports and continuously improve your marketing metrics.

Starting with your data

Having data is great. The key is to focus on a single source when you are starting out with analytics. This may sound counterintuitive, but remember the goal is show the value of marketing. The business goals and KPIs you have generated should guide your approach to creating metrics from your existing data.

Start small

A common mistake at this stage is to track absolutely everything. This leads from too much data to process to too many analytics to track effectively. What is important and what is not? This hand grenade approach attempts to get close to the answers, but winds up missing the mark entirely.

Pick a single KPI. Now is the time to look at more traditional marketing. Put yourself into the business’ customer view. What is the path that the customer goes from prospect to buyer? Here it can be helpful to work with sales. They are talking with customers and can provide insights that you may not have thought about.

The path to conversion becomes a holistic view of your data. What data do you currently have on the conversion path? What data is missing? Fill in the missing data where you can. When starting out, you may have to make a few assumptions and test. No matter what, the reports and insights you gain will be more valuable than basic metrics or no tracking at all.

Become a revenue center

Analytics is not a one-off event. It is not enough to create a dashboard and leave it. To move your marketing organization to a revenue center you need to continuously adjust and analyze your metrics.

Becoming a true revenue center requires centralizing your data. To gain an entire view of the customer, you need to be able to track actions across all channels and systems. This may require an upgrade to your marketing technology stack and integrations with various systems. The move from tracking metrics to being able to view historical trends open up new opportunities.

As your analytics provide more complete views of the customer journey, you can begin to see future trends. Trend data is invaluable to a business. You can anticipate customer needs and changing behaviors as they happen instead of reacting. The goal is to provide individual personalization at scale. Once your marketing organization gets to this point, the value to the business and its role as a way to produce revenue is clear.

Conclusion

Half of marketing departments are not using analytics in their marketing decisions to drive business performance. Those organizations that use analytics do not expect much of a return on the investment. The key to getting the value from analytics is to track the correct marketing metrics.

Understand the goals of the business and develop a set of KPIs to track. Start small and focus on understanding and tracking a single KPI. As your marketing department becomes more mature, centralize your data and begin to analyze trends. Making your marketing team a revenue center all starts with asking the right questions.

Contact The Reference to learn about our workshops to help you get started.

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