Here’s a classic client – marketing consultant interaction:
Client: I want to improve customer satisfaction by 50 percent.
Consultant: What is your customer satisfaction score now?
Client: We don’t know.
Consultant: Then I guarantee I can improve it by at least 50 percent.
Repeat this scenario with any number of worthy goals that have no measurements to back them up.
I call these situations “Wannamakers” after the fellow who said “Over half the money I spend on marketing is wasted. The problem is, I don’t know which half.” Many marketing professionals understand his pain. Even with a comprehensive marketing strategy, you won’t have any idea how much of your effort is wasted, how much money you’re tossing in the trash, or whether your latest consultant or agency is leading you down the garden path without an effective way to measure progress and success.
If you’re measuring at the campaign level, there are some good guidelines available. According to ‘Data-Driven Marketing’ by Mark Jeffery, some of the most important ones include:
- Brand Awareness
- Test Drive
- Customer Satisfaction
- Take Rate
- Net Present Value
- Internal Rate of Return
- Customer Lifetime Value
- Cost Per Click
- Transaction Conversion Rate
- Return on Ad Dollars Spent
- Bounce Rate
- Word of Mouth
Consider these metrics in three groups. The first five look at the effectiveness of your branding, customer loyalty, comparative marketing activities, and campaign performance. The next five (6 – 10) are financial metrics that consider the payback on the campaign from several angles and the final five look at relative cost and impact.
Measuring a campaign is only one aspect of the overall measurement process however. Campaign metrics must be integrated into an overall marketing plan and these types of campaign metrics are not a fit for all of the aspects that a marketing exec should be measuring.
For example, what about the impact of customer communications on loyalty, retention and cross-selling. This must be measured based on more than response to individual message blocks on a customer’s bill. What about measurement of call volumes? Qualification of call volumes (questions, complaints, compliments, or new service activation.) Timely and accurate payment of bills? Conversion to electronic channels?
The data collected must be appropriate to the communication it relates to. Before you start collecting data, you need to determine what you’ll do with it; what data you already have and what you can learn from it; and what your current customer knowledge tells you about retention and acquisition. Too many companies attempt measurement processes in ways that leave them with masses of data and very little useful information.
Where ever possible, avoid silos in your data collection and analysis process. There should not be completely separate tools for email campaigns, direct mail campaigns, social media, statement message initiatives etc. There may be some specialized toolsets, but the information needs to come together on all touch points to be truly useful. If you are embarking on this type of project – talk to your colleagues around the company. Don’t reinvent the wheel (until you find out they have no wheels – which also happens.)
Customer data-driven marketing is a major game-changer. The internet, social media, and mobile networks are opening up a huge opportunity for collection of data regarding customer interactions with your marketing funnel.
If you create a solid strategy now, including measurable metrics of success, you’ll enjoy far better financial performance, brand awareness, and customer equity than competitors who don’t know which half of their marketing isn’t working, or that the half is actually more like ninety percent.