The first step to creating effective marketing is to identify what your objectives are.
It may seem simple, but as the world becomes more digitally focused, there is an ever-increasing number of data points to consider.
Furthermore, this vast amount of data is not uniform. Your measurement plan can quickly spin out of control with so many disparate channels and metrics, causing your marketing to become costly and inefficient.
From the perspective of a CMO, having a firm grasp on your marketing ROI and how it aligns with business results can mean the difference between being viewed as a strategic leader within your organization or the head of an expensive cost center.
Thankfully, there is a secret to managing this deluge of data: not all of it matters.
Focusing On The Right Marketing Metrics
A few years ago, you couldn't read a marketing article or attend a conference without immediately hearing the term "big data." As brands continue to become more digital in their marketing, the number of data points coming from their marketing increases. The concept of big data offered a solution for dealing with these large, complex data sets.
Today, the need for big data hasn't gone away, but as brands explored the amount of time and effort that it would take to implement big data solutions, it did lose a bit of its shine.
For some, the sheer cost of creating a truly data-driven organization caused companies to put their big data initiatives on hold–especially as times got tight.
For others, it may be the technology or AI that promised to aggregate and simplify all of this data just isn't quite there yet.
Regardless, the fact is that data is still critical to the success of your marketing. It's just that the focus should be on the right data, instead of all data.
The process of finding the right data begins with identifying what's most important to your business. To get there, consider the following questions:
What are your organization's business goals?
It may seem redundant, but you'd be surprised how many times we sit down with a new client only to see that the goals they've set for their marketing do not align with the goals of the CEO. If your executive team reports to a board, how would a discussion of business goals sound? Chances are it's not the percentage increase of Instagram followers in Q2.
What does success look like?
In twelve months, if the AdAge wrote about your brand's success, what would the article title be? In this scenario, what is the big insight or advantage that you were able to uncover? Mental exercises like this can help separate the vanity metrics from those which are core to your marketing success.
What are the current barriers that exist for your customers?
Your marketing objective should be to guide prospects towards making the right decision. So, where are they getting lost along the way? Are you able to identify specific barriers, questions, or competition within the customer journey where your marketing can add value and guide prospects back on the right path?
What will you do with it once you have it?
The final gut check for your measurement plan should be to confirm that it is, in fact, a plan. The definition of a plan is a detailed proposal for doing or achieving something. So, what will you do with the data you're collecting? Can you act quickly on it? If there is no action tied to it, should you spend time and money closely tracking it?
The key stakeholders in your organization should discuss these questions and agree upon them to ensure everyone is on the same page.
Establish Marketing Goals For Each Business Objective
Knowing your high-level business objectives, the marketing goals that fall from those should be:
- Realistic - your marketing plan shouldn't be a wish list
- Achievable - benchmarks based on past performance that reflect the investment put against achieving them
- Measurable - assign a number to each goal
- Time-bound - set a deadline with milestones along the way
Once your business objectives and marketing goals are set, determine the market segments you want to focus on and how each segment might differ with respect to your marketing goals and their unique journey.
All of this work will result in a clear framework for your measurement plan. You should judge any channel- or tactic-specific data in terms of whether it fits into your measurement framework or not.
For everything you track, be sure that you understand why you're tracking it, how it's calculated, and what actions you can based on this information.
Marketing Metrics to consider:
- Customer Churn Rate
- Market Growth
- Market Share
- Marketing Cost Per Unit (MCPU)
- Response Rate
- Promotion Profit
- Direct Mail Return on Investment
- Net Promoter Score (NPS)
- Value to Volume Ratio
- Share of Voice
What The Best Brands Know
Measuring marketing effectiveness is a must for any business that is serious about influencing its growth and profitability.
The best brands know the data that matters most. They understand their customers and marketing channels better than their competitors do.
Not because they're able to track all of the information available, but because they have identified information that matters.
They know what their target audience wants, what they like, what they don't like, and how they make shopping decisions.
Focus on the right data for your business, and you can know this too and maximize your marketing ROI.
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