Most marketers typically have mountains of data at their fingertips but often struggle to translate the stream of reports in their in-box to actionable outcomes for their business. These reports often reflect the competing interests of internal stakeholders. That’s why when overhauling your measurement system we think it’s critical to start by focusing the organization on one critical business metric…. one that marketing, sales, finance, and customer service can rally around. This might be a customer value or share of wallet metric, something each member of the organization feels it can move the needle on. Your entire framework should cascade from this clear corporate priority.
To ensure the metrics are actionable, first understand and agree on the most critical business questions you would like to collectively answer. Ideally this will give you the platform to accurately assess the effectiveness of your marketing program, identify and exploit upside potential. Questions you may want to broadly consider are:
- What is the greatest return on each marginal marketing dollar?
- What is the optimal mix and sequencing of marketing activities throughout the buy cycle?
- Is an individual customer worth more to your business today than in the past?
- What is the relative value of your top 5-6 critical customer segments?
You’ll want to establish a champion of the measurement process to instill a corporate-wide culture of fact-based decision making driven by a shared set of performance information…. not competing reports that positively reflect on each group’s objectives. Collective financial incentive will reinforce the importance of shared goals and align organizational focus.
Next, deliver a dashboard that facilitates ongoing learning for all decision makers. It should roll up to corporate objectives such as market share, revenue, and margin growth or even customer loyalty. It should drill down to strategic and operational campaign metrics…. from customer value to acquisition cost and retention to response rate, close rate and campaign profitability.
Finally, be sure to regularly revisit your metrics system and ensure its relevance to business goals and marketing performance. If a metric isn’t actionable, get rid of it. Try to focus on only those critical to customer value and collective success. As basic as it sounds, measuring less might just result in more.