But the sheer number of data points and massive volume of statistics can be overwhelming. That volume of data can be beneficial or misleading for professionals trying to keep abreast of the myriad of available sources of information. Their professional time can be spread too thin with tasks falling through the cracks and more important initiatives slipping away.
The solution may be to track fewer metrics but make sure they are the right metrics. Easier said than done. How do you know which metrics to measure?
Let’s explore the most important marketing metrics and consider a roadmap for creating the most effective approach for managing any number of clients or campaigns.
The State of the Industry - How Marketing Metrics Are Changing
Campaign Magazine recently made the point that all marketers are increasingly being held accountable for measurable results much further downstream than in previous years. And the bottom of that stream is the bottom line. Marketers need greater clarity and closer hands-on management of data sets than ever before. Fortunately, this need is paving the way for a new suite of data-driven platforms and tools to help you collect, synthesize, and integrate incoming data into existing campaigns.
With each new martech innovation, the marketing landscape grows more complex with new data points and a daily flood of new information. It’s a chicken-and-egg reality: as tech improves, you are expected to know more and implement better campaigns faster. Hopefully, your CEO is paying attention, seeing the connection to an increased bottom line. If so, she should become eager for better technology that helps you target greater reach and awareness.
But without a solid plan, this evolution can also foster chaos in even the most well-run marketing departments as systems overlap, fail to link, or simply become silos. The CMO is then left with plenty of data which becomes stuck in various places ending up unused.
Impact Metrics - What Matters to Those Who Matter
CMO’s must focus on creating and hitting measurable KPIs that translate to the bottom-line focused CFO’s and CEO’s. But that doesn't mean more measurements. In fact, according to Brian Kardon, CMO of Fuse, a California cable and satellite channel, you cannot focus on 50 or 100 different metrics. It must be fewer than more. In an interview in Ad Age Kardon explains the woes of marketers who fail to do this, including short tenures, strained relationships with the rest of the C-suite, and a lack of credibility from the CEO. Karden also makes the point that the most important metric for both a CEO and Board is that the increasing productivity of Marketing corresponds to a decrease in the cost of customer acquisition.
A side effect of the disconnect between a CMO’s KPI’s and those of a CFO has lead to a statistic cited by Forbes which states that 80% of CEO’s don’t trust marketers. That’s a statistic all CMO’s will need to rise above to ensure a long and satisfying tenure. In order to make that leap, Ad Age suggests asking the question, “How much of your current customer pipeline did marketing source?” Tracking that connection is now what more and more what principals are asking for.
Friction points - The Difficulty of Attributing Sales to Marketing
No one doubts that tracking business KPIs through marketing efforts is the brass ring, but doing so remains difficult for a variety of reasons. As Cambridge-based Media Consultant Brad Adgate recently remarked, "There’s a friction point between the ad and the sale. That friction point is the ability of the retailer or website to convert the sale. The advertising is responsible for driving the consumer to the location to buy the product or service. But after they arrive, much of the success or blame goes to the store or site. The ad was successful in driving traffic but the conversion was low. Is that the fault of the ad?" Also, consider the monumental volume of ads and marketing that P&G buys daily. How do they expect to know which ad can be attributed to the sale of that tube of Crest?
Looking Ahead - Changes and Trends to Expect
Regardless of the current difficulties of attributing business results to marketing dollars, technology is paving the way to making it a future reality. So what strategies are on the horizon for CMO’s who need to sate this hunger for meaningful metrics? How can a busy CMO synthesize the needed data points, track the process, and create an integrated set of KPI’s about which the rest of the C-suite can champion?
This translates into the next step for an advancing CMO’s strategies: creating an environment in which per-customer acquisition costs consistently decrease into a smaller and smaller percentage of revenue.
To be more effective at providing material value to the organization at large and to gain the favor of your CEO, Forbes suggests doing four things: automate your dashboard and insights to keep real-time data on the front burner, close the gaps between analytics platforms to ensure no critical KPI goes overlooked, integrate data points to translate easily from numbers on paper to results in dollars, and show the connection between your hard and smart work and your company's bottom line.
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