4 Steps to Measuring What Matters Most
While most brands have a digital measurement plan in place, it’s never a bad idea to take a fresh look at how you measure to determine if your approach is as strong as it can be. Even the best plans need realignment and there’s never a bad time to accomplish this. So I was excited that our team at Google recently published a brand-new guide for marketers to understand, and measure, what matters most.
This is especially important because as the digital landscape gets more complex, it takes even more marketing touch points (at the right time, with the right message) to connect with a customer, find a quality lead, and eventually make a sale. Measurement is clearly the answer, and can help you ensure investments and working and that you’re not wasting money or putting customers off with the wrong messaging.
I know you’re busy, so in today’s post I wanted to share some core takeaways from the guide:
1. Focus on the Right Metrics
Set yourself up for success by identifying clear metrics that you want to affect before launching a campaign. Today, with advances in analytics, it’s possible to better align your metrics with your core business goals. If your company’s biggest goal is to increase profits, then your marketing metrics should show how your campaign contributed to profits. Don’t get hung up on key performance indicators (KPIs) like pageviews or Twitter followers – certainly use them as directional metrics and if you suffer a large loss of one dig into what happened, but remember to optimize aggressively against outcome metrics, with KPIs lighting the path along the way.
2. Value Your Best Customers
It’s understandable to want to increase store and website visits with tactics such as coupons or promotions, but what if those customers end up costing you more money than they bring in…and never return? When incentives are geared solely around short term sales and CPA, it’s tempting to buy cheap placements and keywords for ads and promotions. However, doing so can lead to short-lived customers and success. Instead of measuring transactions alone, model the lifetime value (LTV) you derive from your customers. For example, you may discover that 20 percent of your customers are driving 80 percent of your profits. By focusing on getting to know those best customers as well as how you acquired them and how you can find and retain more like them, you can cut costs and increase revenues.
3. Attribute Value Across the Journey
How do you know what’s working in your marketing and what’s not? Start by identifying the role of each touch point along the customer’s journey. Once you have a handle on what the customer journey looks like, marketing attribution can help you to optimize your digital campaigns. Marketing attribution, broadly speaking, means dividing up the value of an online sale (or conversion) and distributing fractions of that value across the different touch points that led to the sale, from a display ad seen last month to a search ad clicked this morning. To get the most out of attribution, be sure to pair it with flexible marketing tools (and incorporate offline channels via marketing mix modeling). That way, you can adjust your investments and messaging to better connect with your customers.
4. Prove Marketing Impact
The right metrics, the best customers, the full purchase journey — each of these is crucial to smart measurement. Yet perhaps more important than any of these is proving marketing impact. What you really want to understand is what happened only because of a given marketing spend change (and would not have happened without it). Beyond helping you invest more wisely, proof of incremental effectiveness can also help change perceptions among senior executives, taking marketing from a “cost center” to a “revenue driver.”
Collectively, these points show how better measurement can improve campaign effectiveness, help you get the credit you deserve for your programs and, most importantly, ensure a better return on investment for all of your marketing.