The marketing metrics even the CEO might care about
Most firms with a significant marketing function expect some kind of marketing report tabled at the board meeting each month?
If you are a marketer preparing this report, do you ever feel it’s just a box ticking exercise? Perhaps the only reaction you get is a “please explain” from the CEO when the visits to the website are down this month? And:
- Does anything happen as a result? Does anyone really care?
- Does the board pour over the numbers with any sense of anticipation?
- Do the marketers find any genuine insights in these reports or have enough information to leverage them in time for the next meeting?
- Can marketing activity be distilled down to simple metrics like page visits?
Metrics to be genuinely useful need to actually control and guide action in your marketing activities.
I have my own ideas on what some of these metrics are which I cover in another article, but first I wanted to raise the idea that not all metrics are created equal. I think they fall into one of 3 groups representing 3 different purposes. Being clear on these will help you figure out how to piece the puzzle together.
Think of gauges used to steer an ocean liner. Imagine if the captain was bombarded by every piece of information across the ship in their cockpit – every sensor, alarm, indicator etc. they would be overwhelmed.
All that information is available to the captain if they need it, but in terms of the day to day sailing of the ship to its destination across the ocean, there are only a few things they really need to know.
- Their direction, so they know they are going to arrive where they expected
- Their speed, so they can plot where they are going to be at any point in time and chart their progress
- Early warning of underperformance, dangers or obstacles in the way
And that’s it!
Other than when there are special maneuvers to be made like coming in and out of port or responding to technical problems, there is little need for any more information.
When there is a technical fault, it’s at this point they’ll consult other indicators, call down to the engine room and troubleshoot.
How does this apply to marketing? Well, I like to think of metrics in 3 ways.
Navigational metrics steer your marketing machine.
You only need a handful of these, but they will tell you if your marketing is on track. Use your navigational metrics as a control room. Everything you need to be confident that all is on track
Defining effective navigational metrics requires thought and clarity on what “on track” means for you.
Good navigational metrics will have the following attributes:
- They are high level: They have to be because you don’t want detail. A good navigational metric distils a lot of information into one number.
- High quality (high signal to noise ratio): The usefulness of a metric is how efficiently it conveys its intended meaning. Bad or irrelevant data can bury meaningful information.
- Short term: They generally provide a short-term outlook, tell you what is happening now (or in last month or so) giving you enough warning to take action before it’s too late. Yet, they can be tracked over the long term to get a feel for trend patterns that may signal irregularities.
- The directional trend of the metric is more important than the actual metric itself. I find it effective to give my metrics granularity down to one month. Plotting into a month to month trend line gives you a good feel for the direction of the metric. They don’t tell you what’s wrong: But they tell you to start looking and possibly where to look. A good metric will tell you at a glance if you are heading in the right direction or heading off course.
- They will reflect your marketing strategy and support their outcomes.
Some examples of navigational metrics could be:
- Monthly Growth of Quality Leads
- Monthly Cost per Quality Lead
- Monthly Engagement Over Growth
- Monthly New SQLs (Sales Qualified Leads)
- Monthly Cost per SQL
You can read more on these metrics here.
Activity metrics are the control room and provide just enough detail for a clear representation of all measurable marketing activity. They give you enough information to measure how the action you took last period is working and where the focus should be in the next
In designing these metrics, it’s important to distil as much marketing activity as possible into the smallest set of useful numbers.
They are fine-grained enough to be tied to individual marketing activities, but not so low level to get bogged down in detail.
There are a few reports I use as a basis for setting up my activity metrics. These are::
Activity Summary Report
This report is intended to provide a representation of all marketing channels, broken down across the stages of the marketing funnel.
This report I organise into a table format. The table columns contain each metric organised from left to right, representing the depth in the marketing funnel. Metrics on the left are focussed on lead capture. Metrics on the right are lead conversion to customers.
The rows split out each metric into the lead source channel. This way I can measure the effectiveness of each channel right through the funnel.
Looking for an example? – see here.
This report gives me a break down per campaign of new leads split out by the lead source channel.
I set this up as an interactive report that allows me to filter by individual or groups of campaigns, showing trend lines over time, along with tabulated data.
Diagnostic metrics are usually managed for you automatically by each marketing platform. They help you answer very specific questions you may have about each discrete component. This includes KPIs like individual email click-through rates, the performance of individual ads, traffic to the website etc.
On a day to day basis, assuming you’ve set up your other metrics correctly, it’s unlikely you’ll need to pay too much attention to these.
They become useful when your other metrics point to a problem or you need more specific information that can only be answered by lifting the hood to find out what’s really going on.
Without this structured approach, almost all measuring and analytics gravitate towards the diagnostic level.
There’s a good reason for this. It’s accessible to anyone without requiring any kind of IT or tech skills and doesn’t require too much upfront planning or thinking. It comes free out of the box.
It’s why most marketers hobble along, relying on the out of the box metrics.
Trouble is that even though you’ve got all this data, it still doesn’t seem to help you feel any less in the dark!
At best your analytics will be interesting. At worst, they’ll be overwhelming but not overly useful for meaningful decision making.
Keep in mind, it takes some serious thinking to develop a quality set of navigational and activity metrics.
It’s also likely to involve a collaboration between marketing and IT to pull the data together and represnt it in a visually useful way.