Forrester, along with Heidrick & Struggles, found in a survey that nearly 80% of CMOs want to prove their capabilities as business or strategy leaders. To achieve this, making metrics meaningful is crucial.
This requires good and thorough planning. Here are the decisions you’ll need to make and what to consider:
1. What to measure
There is a tendency to measure what is easy to measure, as opposed to deciding what would be most useful and then working out how to measure it. Rather than thinking about ‘how’ first, think ‘what’.
Consider the purpose of the metrics. Why are we gathering this data? What do I need to get from it? Who am I presenting it to and what do they want to know? It’s important to be able to relate your findings back to both your individual objectives and the business’s – and to demonstrate the effect your marketing efforts are having on revenue, market share, acquisition and retention levels.
The Modern Director’s Guide to Getting Buy-In From The Board highlights three key marketing metrics:
- Revenue metrics – the total impact on business revenue.
- Campaign performance metrics – the individual impact on business revenue.
- Customer-centric metrics – the customer lifetime impact on business revenue.
It also highlights the need to clearly present the return on investment (ROI) as well as simple marketing metrics. When speaking to the likes of CEOs and CFOs they will want to know the overall ROI as well as metrics such as cost per lead.
2. How to measure it
Now you’ve decided what to measure, work out how to measure it. Remember why you chose each metric, and don’t be swayed by what marketing technology/tracking systems are telling you they can do. There will be a way to measure what you want – it’s just a case of finding it!
Budget and time will affect this step. Identify the resource available to you before you start. Bear in mind once you’ve identified ‘how’ the first time, it will be much easier moving forward.
Consider the number of sources you are collecting data from – a range is best. Construct a formal plan summarizing the whole ‘how’ element, to use when repeating this process for this or future projects.
3. How to analyse the data
Set goals to track. This will help with presenting your findings, give you something to relate the data to and ensure that you are bearing in mind the purpose. Setting goals that link your chosen metrics with the business objectives and the purpose of the exercise is key.
When considering goals, think about the effect on those working to achieve them. Short term goals with a narrow focus can harm productivity and effect results obtained in other areas. A mixture of shorter and longer term goals, and group goals over individual will deliver better results.
If what you are measuring is new, compare your findings to other data sets that are reputable. This is so you can analyze it effectively until you have enough data of your own to compare trends.
4. How to present your findings
Bring everything together in a way that is clear, will be easily interpreted and understood.
Consider the use of visual aids such as graphs, charts and summary diagrams. Include frequent opportunities to allow for questions. Provide handouts or a copy of the presentation to refer back to. Highlight that you’ve considered what they need to know, and where you’ve used comparable data explain why.
5. What your findings mean
Modern’s Director’s Guide explains:
Marketers need to harness data and analytics and embrace a forward-facing focus. Marketing plans should include a section with a financial forecast. Tying investment to revenue ensures that as the business grows, so does the marketing investment.
Analyzing past-performance should be combined with thinking about business strategy and the direction of movement. What are the long term goals – customer acquisition, customer retention, sales? Through demonstrating that you’ve considered marketing’s impact on these goals, and through relating your activity to changes in revenue you end up in a much better position. The budget you need and the technology you’d like to use are more likely to be provided.
This idea that you’ve tied investment to revenue is key. Through measuring the right metrics and presenting the data in the right way you’ll increase the respect marketing has – and therefore the input you have when it comes to strategic decisions being made.
Download the full Director’s Guide here on the Metrics That Matter. [No forms. You’ll instantly get the PDF]