Tips for Measuring Marketing Effectiveness
Accountability has become an essential part of marketing. But not all marketing teams use the right KPIs for measuring marketing effectiveness. If you aren’t aligning marketing with business growth, you’re wasting time and resources.
Companies invest millions in modern marketing technologies. They see expanding marketing capabilities as a means to deliver greater business results. These marketing programs need more complex measurements than most companies can deliver.
These programs often produce mixed results where marketers waste resources. You need more than the best ‘marketing mix’ to produce measurable, consistent results. You need to define metrics in advance that align with business value and cut out the exceptions.
There are dozens of ways to gather information about marketing performance. But most marketers are stuck managing information with no business value. Teams can realign their marketing programs to drive meaningful metrics from their efforts.
The Three Cardinal Rules of Measuring Marketing Effectiveness
HBR identifies three cardinal rules for choosing the right marketing success metrics. It starts with identifying goals upfront that marketers can strive to reach. And HBR’s rules apply to companies of all sizes and industries.
Use Metrics that Are Practical and Easy to Understand
Return on Investment (ROI) is one of the most common marketing metrics. But Forbes reports that companies have different definitions for ROI. “This makes connecting marketing to revenue or other business outcomes even more difficult.”
Now, academics have tackled the issue of practical marketing metrics. Their approach recommends marketers define metrics in a “specific business decision-making context.” This allows them to derive ROI figures that align with business value.
Too many marketers have ROI models associated with short-term, channel-specific objects. This can involve website traffic or social activity that are small in scope. When marketers define ROI’s scope and metrics, they can translate into tangible benefits.
Metrics Should Carry Over to Existing and Future Initiatives
Stakeholders can’t interpret business value when initiatives have different metrics. They cannot compare the results of one initiative to another. This is problematic when choosing between different marketing approaches.
Email campaigns can serve as an example. Marketers measure loyalty program signups for loyalty-driven emails. The might not measure bounce rates from emails directing to program landing pages. They will succeed with one metric that reflects campaign performance.
Marketers might measure bounce rates for a product-driven email campaign. They might find bounce rates are high for those emails. But they cannot compare similar webpage elements to those of the loyalty campaign.
Now, marketers can’t compare email and landing page content performance. Despite the different programs, understanding content elements is valuable. Campaigns that share metrics provide greater business value.
Marketers must see how changes connect with specific actions, behaviors, and content. This allows them to identify high- and low-performing elements across campaigns. This could drive broader campaigns in the future.
Use Metrics to Create Actionable Information that Impacts Business Results
Metrics should align with stakeholders’ intentions for the original investment. They should align with overarching marketing goals as well. Marketers must look for ways to improve marketing strategy while delivering business results.
The two go hand in hand. For example, ROI doesn’t have to translate into profit. ROI tracking should drive insights that allow teams to optimize future campaigns. Even campaigns that struggle can drive value with the right metrics.
Assume a team launches a product-driven content campaign across several channels. The CMO invests in both targeted emails and social media. The team identifies clickthrough rates and conversions as metrics.
Both channels score similar clickthrough rates, but social media conversions suffer. Marketers can conclude their customer base has a wide interest in the product. The two metrics revealed that social channels don’t drive conversions for this product.
The two metrics provided insights that will influence future campaigns. Although conversions from social media suffered, the team will save on future investments.
Your Next Steps for Strategic Development
Again, driving revenue for every campaign isn’t your only goal. Your real goal is to identify and engage with the most profitable customers. The right metrics can serve as a control to market and business variables.
Start a conversation with your key stakeholders to begin. You need to understand your organizations’ defining values to develop value-based metrics. That means starting with the promises you make to customers.
Your next responsibility is asking the right questions. These include “Why are we tracking this?” “How do our campaigns align with our objectives?” and “What should we look at to maximize the value of our campaigns?”
Then you should identify scope. You must outline the scope for individual campaigns. But metrics for individual campaigns can also have scope.
The scope of one campaign metric might be total return on marketing spending. Another might be returns on an individual tactic. You might also have metrics for variant elements like A/B testing.
Prepare Your Team
You should now have a high-end understanding of what you want to achieve. Your top goal is helping your team identify the specific ways they can succeed. This will help with metrics and align them with stakeholders’ objectives.
You can help your team understand how metrics align with business value. Again, that doesn’t always mean driving revenue. Balancing costs means optimizing campaign efforts even while driving business growth.
Teams that understand how metrics align with business initiatives drive greater success. They will notice performance trends that contribute to improvements in efficiency and ROI. Teams that understand the bigger picture will see value in all campaign metrics.
Not all marketing teams have internal resources for these types of measurement. Third-parties provide solutions that take the work out of aligning with business success. But be sure to get more info before investing in a solution.
Get the Most Out of Your Marketing Strategy
Struggling with measuring marketing effectiveness? You need the best resources to build successful marketing strategies. Identifying the metrics you need doesn’t have to be hard.
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