Wednesday, October 10, 2012
Let's talk numbers for a minute. When you look at the technical side of marketing it really comes down to costs, revenue, and profit. At the end of the day, if you're spending $100,000 on marketing and generate $100,000 in revenue, you're going out of business fast! Your marketing shouldn't just cover costs, it must generate a profit. Following marketing campaigns from initiation all the way through to profitability is everyone's responsibility.
Key Marketing Metrics
A question I often get is what are the key marketing metrics everyone should know. From my vantage point it all depends on your role but everyone has numbers they need to be responsible for. Take the designer for example. You might be asking what numbers a designer needs to know. The reality is that the best designers can tell you that a 3-panel brochure generated more leads and conversions than a 4-panel brochure. This point is even more pronounced when you look at web designers. Does a green button convert at a higher rate than a yellow button? If you're a web designer, you better know your friggin' numbers!
Another area of great concern is email marketing. You must go beyond delivery and open rates. What are your click-through rates, average order size, lifetime value of a customer? ...you gotta know your numbers.
Better Numbers Mean Better Results
I'd argue that the correlation between knowing your numbers and marketing success is VERY high. If you know each of the inputs you have control over and what they currently produce, you can begin to test and try alternatives - measuring the effectiveness of each campaign. This ensures continuous improvement and results.
When I hire marketing people I always ask about their understanding of and use of metrics. Yes, even the copywriter. They should be able to answer information about split testing (A/B) and long form vs. short form. In a nutshell no marketer is immune from number responsibility. Know your numbers and you'll not only improve your effectiveness as a marketer, you'll also raise the bar for your organization.
If you're not sure where to start, ask the following question, "What's the goal?" By knowing the outcome you want and working backwards, its easy to determine how best to get there. Looking to put more people into your sales funnel? Okay, how do you know when you've added someone to the funnel? Is that a phone call, an email, a contact form on the website or all of the above? Are you tracking them? Once you understand the outcomes, start asking about inputs. How many completed contact forms do you receive on a daily or weekly basis?
After developing a scorecard of key performance indicators (KPIs), its time to improve upon your results through testing. What if you shortened the contact form? Made is longer? Eliminated some required fields? What would your completion rates look like? Again, start with the end in mind and work backwards to determine what inputs you can begin to manage more effectively.
The key is to get started today. What are the 2 - 3 key performance indicators you need to start monitoring. After a couple of weeks, begin your testing and measuring results. You'll be well on your way to improved performance.