More than ROI: Determining the Correct Marketing Metrics
It’s a question that every marketing team must ask themselves: How are we going to track and manage our marketing effectiveness in a way that aligns to our business goals? However, determining what metrics best illustrate your marketing efforts and guide continuous improvement can be tricky.
In a recent episode of Mad Marketing TV, Jim Lenskold, President of the Lenskold Group discussed the importance establishing metrics to measure performance and provided some guidance as to what metrics to choose.
Determining a Mix of Metrics
According to Lenskold, marketers need to develop a set of metrics, because one metric, even ROI, doesn’t stand on its own.
As Lenskold explains, ROI is like the score at the end of any sports game; you want to know if you won or lost, that’s most important, but the score alone doesn’t tell you what you did well or what you need to improve. That’s where this other sets of metrics come in.
4 Key Steps to Creating Successful Metrics
When it comes to creating successful metrics, Lenskold says there are four key steps to consider:
- Relate it Back to the Business
Make sure you’re aligning the metrics, in some way, to the business outcomes. It’s the collective set of metrics that we’re trying to manage.
- Create Clear and Consistent Definitions
Make sure you have clear and consistent definitions for metrics. This is important because these metrics get shared around the organization and everyone needs to have the same understanding.
- Know How to Interpret Results
Make sure that you know how to understand the results. What do the numbers derived from metrics mean and what do the deviations mean? Is there an acceptable range?
- Select Metrics Influenced by Marketing
Don’t get attached to any metric you don’t know how to manage and improve. It’s important to understand what ways marketing influences these outcomes.
In summation, Lenskold encourages marketers to avoid the “feel-good metrics.” As marketers, we need to make sure that we’re putting meaningful metrics in place. That might mean it’s more work, but meaningful metrics help build creditability within the organization.
Mad MarketingTV is sponsored by Act-On Software.