A quick word about metrics. You know those figures that your marketing agency should be reporting to demonstrate that they’re delivering results? When I onboard new clients I often get a look at reports produced by other agencies and chat through the results. These can be enlightening, confusing and anywhere in between. But more often than not, they’re not really helping.
One of the problems with metrics is that often they don’t make a lot of sense to your CEO, CFO or the Board. Let’s face it, they’re interested in increasing revenue and profits, not whether your organisation’s Facebook page has gained 500 new likes. Instead they need metrics that measure marketing performance and business outcomes. If they can’t see how your marketing activities are having a positive impact on the bottom line, they’ve got a very effective way of increasing profitability by cutting costs – your marketing budget.
Poor metrics are not always your marketing agencies fault
The problem for marketing agencies is that they can’t always back up their metrics with evidence or make the link between revenue and profit. It’s not their fault. Generally, they’re not privy to this information and can only report the metrics they do have.
As a result, marketing reporting often focuses on ‘vanity’ metrics, which are generally traffic and engagement style metrics. These are feel good metrics, like the number of Facebook likes or email opens, where the bigger the number the more impressive. These metrics are about quantity, not quality, they may make us feel like we’re doing a great job but they don’t tell us anything about the quality of the lead.
That’s not to say that big numbers aren’t desirable, or that in some cases it’s OK to attract large numbers of prospects to the brand knowing that only a small percentage will be quality leads. When costs per acquisition are low, this approach may be valid. But how do you or your marketing agency know this works if you don’t know what your cost per acquisition is and the value of those customers?
What metrics should you be measuring?
The first thing to do is align your marketing objectives with your organisation’s business goals. In a survey from IT company Spiceworks of B2B marketers, 28% said their objectives are “not at all” to only “somewhat” aligned to their company’s objectives. That’s a job that in-house teams need to do and then communicate to their external partners.
The next step is to identify metrics that relate to these objectives such as conversion and revenue metrics. You need to know cost per acquisition, cost per conversion, lead to close ratios, campaign ROIs, influenced revenue etc. Many of these metrics won’t be available to your marketing agency, they may need to come from your sales team, but a lot of the data your marketing team does have can feed into these.
These are also the metrics that you should share with the senior leadership team, not the number of Facebook likes. Instead they need to know how the increase in engagement or traffic impacted bottom line metrics such as influenced revenue. Use this information to feedback to your marketing team and agency so they use it to improve the performance of future campaigns.
Taking this approach is also helpful when a Board member asks why your company only has a certain number of social media followers, when a competitor has many more. It provides you with evidence to demonstrate that the marketing activities you engage in deliver results, and also evidence that some activities are not worthwhile for your company.
Get in touch if you would like to discuss marketing metrics in more detail!