I was on a call recently when a CTO said, ‘That’s numbers, if the Marketing Team know what they are’. It got me thinking: what is it about marketers and marketing metrics and measurements? Why do we have this (unfortunately, deserved) reputation?
We don’t give MDs, CEOs, business leaders the numbers they want
Well, we do. But not easily and not quickly. I’m often asked, ‘But how many leads does it take to convert to a sale? How much marketing budget to get one sale?’ with a hint of understandable frustration in the voice. My reply rarely helps. I can give you those numbers, those key marketing metrics and measurements. In time.
And the reason it takes time is because it is never as simple as, ‘We run advert X and Y happens’ (substitute ‘advert X’ for ‘a multi-faceted campaign that has many touchpoints all of which should lead to prospective customers moving along the Buyers Journey or exiting it if they are the ‘wrong’ type of client).
We’re measuring human behaviour
Fundamentally, when it comes down to it, marketers are measuring human behaviour. This makes life particularly tricky.
Us humans are irritatingly hard to predict the behaviour of and the more involved the decision we are taking, the harder it is to forecast the actions that we’ll take. There are so many variables.
Things that affect human behaviour when it comes to purchase or engagement decisions are:
• Our own thoughts, wants, needs, fears, beliefs, hopes
• Other people’s thoughts, wants, needs, fears, beliefs, hopes, behaviour all of which can influence us
• External forces such as: the weather, a pandemic, politics, the media, next door’s cat distracting me as my husband talks to me about options for a new car…and so on.
As you can see, pretty full on stuff.
That makes it hard to measure because there is no one thing that leads us to buy or choose one company over another.
There are lots of different things that influence the human decision making process.
And please, don’t be fooled, this applies when you are selling into a business too (because there are still people in businesses who make the purchase decision or are responsible for setting up the processes that assist in making that purchase decision).
Measurements that count
As one of my clients says, ‘The only measurement that counts is how many sales’. Yes. And No.
The bottom line, profit, is often THE measurement for businesses.
Over 25 years ago, John Elkington coined the Triple Bottom Line (3BL). He successfully proposed that businesses consider:
which leads to sustainability all round. This was widely praised and adopted but also abused.
Businesses still put PROFIT first (leading to the counter phrase, ‘People before Profit’ and ‘Planet before Profit) while relegating Planet and People to inferior positions. This leads to imbalance and goes against the whole point of balance that Elkington was making.
In fact, Elkington actually withdrew the 3BL in 2018 because of this abuse (I’m curious about how you can withdraw an idea that is widely used, but that is for another time).
What Elkington and other business leaders like him did successfully do was challenge the belief that the only measurement is profit.
In fact, the recent pandemic saw many businesses shamed or praised depending on how they are treating their people. And we are seeing more and more in the mainstream media businesses being praised or shamed for their impact on the planet.
What does all this mean for you as an SME?
Let’s get to the practical point. As an SME you need to know what is crucial to your success and then be able to measure that.
So, the first step is, define what success is for your business.
Here are some examples:
• To make £xxx,xxx profit p.a.
• To have happy, empowered staff who actively contribute to our success
• To be able to run a charitable arm
• To have ABC impact on the lives of XYZ people
• To reduce carbon emissions in our field by X%
Your business has to determine what success is for it and how you can sit back at the end of each year and decide if you have been successful.
Once you have this definition, you can set your measurements.
• To make £xxx,xxx profit p.a. Measurement: amount of profit
• To have happy, empowered staff who actively contribute to our success. Measurements: 85% staff retention, 90% of product improvement ideas come from staff, high scores on GlassDoor
• To be able to run a charitable arm. Measurements: Able to fund pro bono 3 charities p.a.
Then for every measurement, go into more detail.
So, let’s take a typical one: Profit.
- What does that mean in terms of: sales needed, customers needed, cost per sale, average sale value? How often do you need to measure each of these?
- What does that mean in terms of: how many people enter your buying process, how many become leads, how many convert? You can look at past data to project what you need to bring in to reach your goals.
- What does that mean in terms of figuring out which marketing activities are successful? Make sure you look at all the marketing activities that took place over one period of time and measure them singly and together; the cumulative impact cannot be ignored.
Now you should know what you need to measure – and why you need to measure it.
Marketing measurement is a huge, interesting, and exciting (yes, it is!) topic.
It covers data measurement and crunching, assessing and understanding human behaviour, running experiments to test if changing certain elements changes the outcome and if so by how much. It really is a field to embrace and enjoy.
But, ultimately, it is what allows us to see if marketing has been successful. And to get that right, your business needs to clearly know what success is for them.
For more on measurement in SMEs, here are some other blog posts you might want to read:
- Marketing Metrics – some fundamentals
- Three reasons why your marketing doesn’t work
- An introduction to Bayesian for Marketers
- Three Key Customer Experience Metrics you should be measuring
There’s a lot more that I can say (and will say!) on this subject but for now, I hope it has given you food for thought and clarification around what to measure in your business.
About the author
Kara Stanford is a Strategic Marketing Consultant.
If you want clarity around what your business is doing, who it needs to market to, and how to do effective marketing, then get in touch.
She’d love to help you.