Marketing ROI And Metrics: Keep It Simple

When you are trying to make the business case for your marketing initiatives, you may be wondering how to report or forecast your marketing return on investment (ROI) and metrics. And when we say, “You may be wondering,” we really mean, “The CFO keeps emailing about it.”

Well, we’ll let you in on a little secret. You won’t hear this from many marketing professionals, but we’ll tell you right now that most marketing metrics programs are too complex, poorly executed and a big waste of time. If you’re measuring more than a few critical numbers aligned with your marketing, sales and business goals, you’ve fallen into the tender trap.

At the end of the day, you should start with your business strategy and select only those metrics that give you insight into whether or not you’re achieving your goals. If you’re tracking a metric now that causes you to say, “Oh, that’s interesting,” but doesn’t drive a change in behavior, you should stop tracking it because is eats up time, money and other resources.

Here’s the deal: on the subject of marketing metrics, we could write another entire book. There are literally hundreds of metrics that could be tracked. In order to know which ones should be tracked, you have to know what marketing, sales and business goals you’re pursuing and what information is possible to track. We can’t cover all of that here, but we can offer a few suggestions.

Keep It Simple

Simplicity is a virtue when measuring ROI. If you don’t keep your metrics dashboard simple, it won’t get updated. Also, we know you’d like a technology product that integrates all of your metrics, but trust us, stop looking. Bigfoot stole it and sold it to the Easter Bunny.

Ask A Few Key Questions

Obviously, there’s no one-size-fits-all solution for ROI because every company – and every marketing plan – is different. However, we do want to give you a little direction, so start with asking these three questions:

• What’s the point? If a metric doesn’t change your behavior, don’t track it.
• Where’s the alignment? If a metric isn’t directly related to a marketing, sales or business goal, don’t track it.
• What do we measure? Consider metrics for quantity, quality, cost, time and satisfaction. The most important metric in our space is derived pipeline value. If you don’t know what that is, call us. For demand generation, focus on cost per inquiry, cost per opportunity and cost per sale. For branding, focus on recognition and recall through surveys.

It’s Not The  Size Of The Dashboard …

In our experience, we see an inverse correlation between the size of a metrics dashboard and the experience of a marketing executive. That is to say: a huge metrics dashboard usually means the marketing team isn’t confident in their plan or experience. That doesn’t mean that metrics aren’t important, but tracking too many or creating a process that requires a full-time employee to maintain is never necessary. Pick a few good metrics and stick to them. Otherwise, you’ll end up with analysis paralysis.

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