How do you know if you are on the right track with your marketing?
So you have a marketing strategy in place and you have rolled out your marketing plan. But how do you know if it has been successful? Here are four key areas to consider when measuring and reviewing marketing performance.
Measuring and reviewing marketing performance is about measuring what matters and reviewing it holistically and strategically, so that you can deliver actionable insights. Actionable insights are the key to improving marketing performance.
Ahead of providing our top tips for measuring and reviewing marketing performance, we answer the question, ‘What are actionable insights?’ and consider the difference between marketing performance metrics and KPIs.
Alternatively, go straight to any of our 4 tips for measuring and reviewing marketing performance:
- Tip 1 – Review trends and KPIs to assess marketing performance, not just metrics
- Tip 2 – Measure and review marketing activities across the whole customer journey, not in isolation
- Tip 3 – Measure and review marketing performance holistically across the whole business, not in silos
- Tip 4 – Review performance from a strategic, not just tactical, perspective to deliver strategic actionable insights
What are actionable insights?
Actionable insights are conclusions, drawn from the analysis of data and information, which can be actioned to achieve desired outcomes. Data can be structured or unstructured, qualitative or quantitative.
Insights come from analysing data and information, but they are not all actionable. Actionable insights drive decision-making about what you should do (and not do) and why. Consistently harnessing actionable insights will lead to improving your marketing performance.
The difference between marketing performance metrics and KPIs
These terms are often used interchangeably, but the difference is that KPIs (Key Performance Indicators) are strategic while metrics are often operational or tactical.
Marketing Performance Metrics
Performance metrics look at the performance of specific processes and should be tracked and managed regularly. The regularity will depend on the context e.g. the type of business, the marketing activity and channel, level of investment, priorities and external factors such as volatility in the market place (perhaps from competitors).
Typically, marketers will keep a close eye on the performance of individual marketing campaigns, particularly digital campaigns and paid ads, so that they can optimise them at the earliest opportunity.
Marketing Key Performance Indicators (KPIs)
Marketing KPIs track progress towards your most important goals. These are likely to be more holistic in nature rather than specific to a particular process, product or campaign.
When you plan your marketing activities strategically, you will know, or at least have theories and expectations about how everything in your marketing mix will work together to achieve your marketing objectives and long-term goals.
When you review your marketing performance, you need to do so from this strategic perspective and be able to measure success by evaluating KPIs rather than a snapshot of performance metrics. For this reason, KPIs are typically monitored monthly and strategically reviewed on a quarterly basis.
Review trends and KPIs to assess marketing performance, not just metrics
When evaluating performance metrics analysts and marketers will be looking at two things:
- significant change from baseline metrics (which might be your business-as-usual results) and
- trends i.e. change over a period of time.
The key question is whether performance is as expected and if not, why not? Similarly, if performance has exceeded expectation, then why and is the success repeatable? And, critically, is progress being made towards your overall strategic marketing objectives and goals.
Whether progress is headed in the right direction or not, it is important to review assumptions and other factors (internal and external) that may influence marketing performance. For example, the success of a marketing campaign depends on all factors that influence the final purchase decision such as price, product quality, credentials and customer experience; it is not just dependant on whether the campaign itself was well designed and implemented. Performance metrics for the campaign may indicate that it has been successful but if your KPI for increasing product market share has dropped, then you need to fix the bottle neck before spending more money on campaigns.
KPIs help analysts and marketers to focus on the key areas which affect the bigger picture. This approach will help improve marketing performance and overall return on investment.
Measure and review marketing activities across the whole customer journey, not in isolation
Different marketing activities have their own set of relevant metrics to assess their individual performance against their objectives.
Metrics are associated with each of the stages of what marketers call the Marketing Funnel. The Marketing Funnel is simply the funnelling of your potential target audience through the various stages of awareness, consideration, conversion and loyalty.
At the top of the funnel, you are looking to measure reach. At the consideration stage, you should measure engagement and at the conversion stage you should measure conversion rates. At the loyalty stage you can measure your net promoter score or, for example, referrals per 100 customers.
Whilst you can measure return on investment (ROI) at any stage of a marketing activity whether it’s a one-off activity or an ongoing campaign, you can’t measure impact on profit and margins until you have reached the conversion stage and have sales income to measure.
In addition, it is important to remember that there is rarely a direct correlation between one specific marketing activity and impact on the bottom line. There are invariably multiple factors at each stage of the customer journey that might impact the performance of a campaign on the bottom line.
To measure and evaluate overall marketing performance, you need to track what happens at each stage and ideally each touch point of the customer journey. If there are multiple touch points and too many to track (due to cost or time constraints), then track those that are most influential in the customers’ decision-making process.
When assessing marketing performance, review marketing activities not in isolation but collectively. Marketing campaigns can be targeted on a specific touch point of the customer journey or planned to cover the entire journey. Either way, the impact of the campaign can be across the whole journey. To assess overall performance (and value), it is important to measure and review impact across the whole customer journey
Measure and review marketing performance holistically across the whole business, not in silos
Marketers and business owners/managers are typically well informed about individual marketing metrics, but they often fail to evaluate them within the context of their overall marketing activities and strategic objectives. When this happens, valuable insights and opportunities are often missed.
For example, an email campaign for a particular product or service may appear to have relatively low impact when measured in isolation because few or no sales nor leads are directly generated from it. However, that email campaign could be keeping your brand front-of-mind with your loyal customers and driving repeat sales and customer referrals for other products/services. This hypothesis can be tested over time by comparing repeat sales data of those customers who read email campaigns with those who don’t and analysing the source of referrals (assuming that information is captured).
The value of some marketing activities is more difficult to measure. This is often the case when the sales cycle (from brand awareness or interest through to completed sale) is longer and/or there are multiple touchpoints and different customer journeys that an individual can take. In these situations, you need to develop and test hypotheses, and evaluate as many of the influencing factors collectively as well as individually. Customer surveys can also be utilised to capture qualitative as well as quantitative data.
Review performance from a strategic, not just tactical, perspective to deliver strategic actionable insights
Performance metrics and KPIs should be reviewed with the wider team, so that everyone’s knowledge and expertise can be drawn upon before actionable insights are derived. In addition to reviewing performance metrics to make operational and tactical decisions, the leadership team should review KPIs from a strategic perspective to help improve marketing performance and ROI.
All actionable insights should lead to performance improvement. However, if you don’t specifically focus on strategic improvement, then it may not lead to improvement in the direction that will help you to achieve your marketing objectives and long-term goals.
To read further on this topic go to our accompanying blog on how to consistently harness actionable insights to improve your marketing performance and return on investment (ROI).