If you cannot measure and control it, it is not existing anymore. This is a pretty straight forward sentence but a pure reality nowadays in the companies. It is true, that sometimes it is not easy to track or measure some topics, but we could always find a way to do it (perhaps in an indirect or influencer way). However, a good question to raise is, why should we measure anything? It is easy, how can we track the progress or results? There are tons of post talking about KPIs, metrics and dashboard talking about this. Just to stress out, that all of them should be fully in sync with the corporate strategy
Digital Marketing
One of the biggest benefits of the digital marketing is not only that it provides an easy way to track back the ROI (Return of investment). But also we can get operational or tactical metrics, helping us to understand and improve any initiative.
In the digital marketing is easy to set up metrics. It is very technology focus, and it allows us to get any result in a really easy and fast way. But, bringing back to the initial paragraph, digital marketing should be positioned as an enablement function that help and support the company in meet corporate goals and ambitions
The marketing is a key function in all the company, supporting all customer/consumer lifecycle, but especially first phases. We should remember the vital role it plays in the customer/consumer retention and activation.
Checking any specialized blog or web we could find a huge list of metrics and concept to use in this goal measure. Some of them cover different actions done in a web or emails. Some examples:
Open rate, click through, cost per click, ….
All of them are very interesting, as help us to understand the performance of different web components, emails or activated campaigns. From an operational point of view are perfect, but no company has this kind of corporate goals. Any corporation get more if they sell products, services or solutions. The sales drive benefits. But, why then, digital metrics or KPIs are not based on this concepts? Even more, sometimes classic marketing KPIs follow same wrong principles.
Marketing goal is create brand awareness, generate demand generation and help sales teams to meet sales goals (related with financial growths). We should look at it as an end to end process, even though there are several players. Linking all the dots for this long, and sometimes complex, process, would be easy to talk about marketing financial benefit, and how support any initiative to meet global ambitions
Business model
Each Company is different, and each one operate under s different business model. In a nutshell we can differentiate two big groups: B2C and B2C companies. In the first ones, customer lifecycle and purchase phase is much longer and a sales rep use to control, track and follow up each of these potential sales. In B2C it is not easy close the marketing-sales loop. In some cases, the consumer search for info in the web or social media, but buy products in a retailer (Amazon or Physical shop). In this cases, the brand is only a influencer for their own products but have not a direct sales. We should search for conversion rates. Or try to get real data for retailers to have full big picture around buying behavior.
KPIS to measure with
The ultimate goal is monetize any marketing initiates (via product sales). An open rate shows the performance of a certain component at operational level. However, it is not relevant or there is not a direct impact in the corporate goals/sales. But conversion rates, in conjunction with open rates/click through rates will drive more insight about global targets.
A good approach is group KPIs under 3 different buckets: strategical, tactical and operational. Each bucket has a different goal and we could get different insights. The first group will help us to drive the business. All these KPIs are valuables to take long term decisions, having in mind the big picture. Tactical ones will adjust the actions or initiatives to run in to meet company strategy with goals. They have a high relationship with the strategic. Last bucket, operational KPIs should be monitored in a daily basis, and help us to understand factor to be optimized in our operations. All the “classical digital marketing” KPIs as open rate, click through… are, from my point of view, classified in the operational bucket. These KPIs show the performance of different component of our digital landscape, but there are not KPIs to take strategic decision with. This is a gap that not all the digital marketers and managers have in mind. If we want to step up, this needs to be the first though.
Each KPIs and metric has importance, the key is know how and why to apply them. Have a clear picture of the definition, logic underneath and thresholds is vital to be success. In order to properly control the business, the full lifecycle should be covered, having in mind how to support the corporate strategy
Right, James. Thanks for your article. At an end we must be sure why we are using a KPI – which is to support a goal. Metrics for their own sake are meaningless and we tend to mix up the measures and the goals (or forget the goals looking at the metrics). Prime recent example is Wells-Fargo. We might also attribute the GFC partly to this (add some greed, too)
2 ct from Down Under
Thomas
@twieberneit
Absolutelly. But not only KPI or metrics but also any kind of project or initiative to kick off should be in sync and fully aligned with corporate goals and strategy. All the goals not based on this, will fail at some point (i.e Wells-Fargo). KPIs and metrics are tools that will help us to drive the company in the correct direction (to meet goals). Cheat the KPIs is cheat ourselves.