Marketers today are under increasing pressure to measure the impact of their marketing efforts.
In fact, thanks to the ubiquity of online marketing—where responses and actions of one form or another can be relatively easily tracked—along with the growing use of marketing automation systems, marketers have more data at their disposal than at any other time in human history.
Nevertheless, as Jim Lenskold pointed out in last week's episode of Marketing Smarts, just because marketers have access to technology that allows them to capture data and just because they are beginning to manage marketing activities according to specific metrics, they aren't necessarily using the available data and technology to maximum effect.
What's missing? A holistic approach to marketing metrics.
There's Always More to Measure
If you are running a lead generation campaign whereby you offer a white paper download, for example, in exchange for contact and company information, the first level of measurement is fairly straightforward: How many people completed the form and downloaded the white paper?
Of course, if you stop there, you won't exactly be able to figure out if the money you put into writing or renting the white paper was well spent. For this reason, if you're like most marketers (and the people who approve marketing budgets) you'll want to know what happened next.
If your systems are sophisticated enough, you should be able to tell whether the person who downloaded the paper was a new client or someone already in the system, whether they have visited your site before or visited it post-download, whether they have ever responded to emails, whether they have ever been contacted by a salesperson, and so on, until you can say whether they became an actual customer.
Even if they did become customers, you will also want to know how much they ended up spending with your company--- and if you can tie a marketing expenditure (creation of a white paper) to a specific amount of revenue, then you are doing pretty well!
At the same time, if you are able to demonstrate the revenue impact of your marketing, then you also realize that there is always more to measure and, as Jim puts it, "You're not looking for one measure, but the set of, the portfolio of measurements that really tell a better story."
A Holistic Approach
Developing a portfolio of measurements (one that doesn't stop at the metrics that are the easiest to tally or the data points that the easiest to capture) is only part of a holistic approach to marketing metrics. For a truly holistic approach, you not only have to look at the whole picture but also involve the whole organization.
"You really need processes," Jim told me. "You need the organizational structure in place; you need the ability to measure—measurement is part of that—and you need the results focus; you need these different dimensions that come in, even sales and marketing alignment can come into play."
In other words, when people say, "We have to start measuring this stuff!" or "You need to show me what my marketing spend is actually accomplishing in terms of revenue," they are asking for more than the generation of a monthly report.
Instead, they are asking for an organizational shift built around measurement that strives to tie all marketing activities to revenue impact and that focuses on applying the insights gleaned from measurement to plan future marketing efforts and guide the strategic direction of the business.
Such a holistic approach is not achieved simply by implementing this or that technology or tracking this or that number. It requires, as Jim suggests, processes for gathering and analyzing data, the ability to use that data to guide business decisions, the people capable of working within a metrics-oriented, results-driven organization, and, above all, the discipline to maintain a focus on results and make changes based on whether or not you are getting the results you want.
Tracking downloads or email opens or click-through rates (or whatever) is relatively easy compared to establishing and maintaining a truly holistic approach to measurement. The problem is that, without the latter, the former doesn't really matter.
If you would like to hear my entire conversation with Jim you may listen here or download the mp3 and listen at your leisure. You can also subscribe to the Marketing Smarts podcast in iTunes or via RSS and never miss an episode!
My name is Matthew T. Grant, PhD. I'm Managing Editor here at MarketingProfs. I divide my time between designing courses for MarketingProfs University and hosting/producing our podcast, Marketing Smarts. You can follow me on Twitter (@MatttGrant) or read my personal musings on my blog here.
If you'd like to get in touch with me about being a guest on Marketing Smarts or teaching as part of MarketingProfs University or, frankly, anything else at all, drop me a line.