Standardized Metrics: Ensuring a financial return on your marketing investment.
What standardized metrics are and why they are important.
A lack of measurement standardization can lead to disasters, including in some of the world’s most high-tech industries: think of the metric mistake that botched the Mars mission, when engineers failed to convert units from Imperial to Metric, costing NASA the loss of a $125-million satellite.
And unfortunately, this is still happening especially in marketing.
Companies are losing money due to the lack of metric standardization.
The cost of lead acquisition, level of engagement, customer satisfaction, conversions rates are all subjective figures with no importance to an organization if they don’t link to a financial gain.
What makes it worse is that today, we use multiple marketing platforms like Facebook ads, Pinterest ads, Google adwords which generates a lot of data making it even harder to analyze and determine the true value of these metrics irrespective of the channel used.
No wonder marketers are still putting forth hundreds of disparate measures for their specialized fields, with most of them stopping short of linking to financial return.
While many at the top of their field, making passionate arguments that it’s all about viewers, impressions, click-through, engagement or the elusive brand awareness.
For any business, it’s all about financial profit and growth.
When marketers accept the primacy of profit, they set metrics directly linked to generating a return on investment and it all starts with standardizing their marketing as a process, and the respective metrics of measurement to ensure a return on investment.
In my previous post, we covered standardization in marketing.
And as promised, today we are going to go over how you can standardize metrics across your organization.
But this article will make more sense if you have a bit of foundation to build on.
So If you haven’t read my previous post, here is the link
This is what am covering in this post:
- Definition of standardized metrics
- How to standardize your metrics
- Benefits of standardizing your metrics
- Considerations to make
Definition:
A metric is a system for measuring something.
What makes a metric different from any other measurements is that a metric is based on standardized procedures, calculation methods and systems for generating a number otherwise it’s just any other number in your database.
For example;
A company interested in measuring its product’s customer satisfaction, and in their first survey, they ask customers to rate their satisfaction on a scale of 1–5. But in the next survey, they ask customers to rate their satisfaction on a scale of 1–10.
Such measurements can’t be considered metrics because they aren’t observed using a system or standard.
But if the same company decides on a standard scale and technique for gathering and computing customer satisfaction, it can accurately be referred to as a metric.
How to standardize your metrics.
- Define the goal you want to achieve
Have a goal in mind. Taking the example above, if my goal is to improve customer satisfaction for my product, the key metric I would track is the number of satisfied customers.
Increase=ing the number of satisfied customers would translate into an overall improvement of my product customer satisfaction.
So how will I achieve this goal?
2. Create a strategy to achieve that goal
This includes whatever you are going to do so as to achieve your set goal. Sometimes this involves a number of steps.
To improve customer satisfaction, my strategy can including, improving product onboarding experience to make sure that users get the product value as early as possible while removing any friction that might cause a negative experience.
The next step would be creating additional value to compound on what my product is already delivering just to make sure users know they get a lot more value than they pay for.
Then lastly, a survey to determine how we are performing.
In this case, my strategy has 3 steps to ensure that I improve my product’s customer satisfaction.
Clear define what the strategy and all the steps involved because your strategy makes determines the next part.
Note that,
For two different organizations, a common metric like customer acquisition could have totally different processes and therefore a different meaning.
This is what makes copy and paste marketing bad for business.
2. Identify the data you need
Given your strategy, what data will you need in order to measure performance and ensure you meet your goal.
Based on my strategy I would need product onboarding data, customer feedback, and survey data to effectively track any changes and improvements made.
3. Method of data collection, compilation, and analysis.
This is the most important but also the most overlooked step because any alterations here generate can create a whole new meaning for your metric.
This is where you determine how you are going to collect your data, what tools will be used to collect this data and who in the organization is responsible.
At the end of the numbers themselves are concrete, it’s our interpretations, evaluations, and meanings of them that change.
4. Communicate your metric and how it’s measured.
Make sure everyone in your organization is informed about the metric and understands what it means for the organization and how to measure it.
The cost per customer acquisition should mean the same for everyone in the organization.
In terms of definition and how it’s actually measured.
A metric is not standardized if it’s not accepted and adopted by everyone in your organization.
Here is why you should consider standardizing metrics.
Standardizing metrics for efficiency and scale has been the norm for several years in other industries and company functions, including manufacturing, operations, finance, sales, and human resources.
In marketing, we standardize metrics for basically the same reasons:
1. Enable scaling.
Scaling a business, just like any other business activity should have a goal/target to be achieved if successful.
This could be revenue growth.
To achieve this goal, a company can choose to scale by either increasing the marketing spend on Ads, building a bigger marketing team or entering new markets.
Before scaling, a company must have a proven process/strategy of applying available resources to generate a positive ROI.
Your process determines your scaling method, if Facebook ads are working great, then increasing ad spend could help you reach your goal. But if organic traffic is your best performing channel, then expanding your SEO and content team might make more sense.
Before you scale facebook ads, you will need a successful Facebook ads funnel that’s proven to generate purchases from the leads collected.
Such a funnel normally comes with a number of metrics to track such as leads collected, conversion rate and purchases made.
These metrics help you determine how successful your strategy is to ensure that you reach your scaling goal.
Similarly, when adding new team members for SEO scaling, you will still need a proven SEO process that achieves the desired result.
The process should be one new member can easily learn and improve for even better results.
Having a proven process makes it a lot easier to onboard new team members.
Without which you could have marketers across the organization using five different analytics sets, three marketing automation tools, and building and executing integrated campaigns in 17 different ways.
2. Enables organizations to automate key operations.
We live in the age of marketing automation.
As long as a task is repeatable, it can be automated. Most applied in email marketing, social media marketing, and customer inquiry responses.
Automation has so many advantages but the most important is that it helps marketing teams scale and free up scarce time and resources needed for more creative, strategic initiatives.
Standardized metrics provide a clear way for anyone in the organization to measure and optimize marketing automation to ensure success.
Considerations when standardizing your metrics
1. There’s no one best metric to track
The value of any piece of information varies with regard to context.
This is why creating a strategic process for how your company collects, analyzes and leverages specific metrics is very important.
This process must take into account who will be leveraging the data and when that info will be of most value to them.
2. Timing is literally everything
The value of insights changes with time.
So, identifying when a certain metric provides the greatest benefit is crucial to any marketing strategy.
Of course, this will vary from business to business — measuring a campaign’s opportunity-to-customer conversion rate a couple of weeks into a B2B tech sales cycle is unlikely to be helpful, and may even result in ill-advised program alterations.
On the other hand, evaluating various data sources social media, content platforms and assets like ebooks by lead volume and higher-funnel conversion rates a couple of weeks into a campaign is quite useful.
3. Feeding people the insights they need
Company executives are most likely not going to care about which blog post resulted in 130 ebook downloads.
But they may be interested to know that content marketing was responsible for a 22% increase in revenue the previous quarter.
The effectiveness of metrics depends on getting the right people the right information.
This obviously varies, every company is different, and it’s important to identify who requires what information and when.
4. It’s a process that starts with a goal in mind.
You should seek to standardize your marketing metrics by developing a process customized to your organization’s marketing or sales funnel.
No metric is going to collect the most accurate data and be 100% accurate.
You need to define a metric that is strict enough that it represents the exact same concept, but not too strict that you require a team of 100 rocket scientists to make sure they are accurate 24/7
Here is a goal-based example you can follow to better understand the process.
Let’s say a SaaS company has created a standardized marketing process with which it aims to generate an increase in revenue by 30% in four months.
And say, that process is to involve attracting new visitors to their website, converting those visitors into leads who will then be nurtured into paying customers.
Each major step in this process should have an operational metrics like prospects, qualified leads, sales accepted leads, sales are considered and then quantified with their relative KPIs like lead volume, conversion rates, number of customers, etc.
With the KPIs in hand, you can then list the specific metrics, stakeholders need (and when they need them) in order to optimize and increase the performance of each stage relative to set KPIs.
This is to fundamentally ensure that the company is able to meet its performance metric, the number of sales generated within 4 months.
If the sales generated within the period do not reflect a 30% increase in revenue, then something went wrong.
What went wrong?
Analyze this metric across different dimensions, are you overestimating or are you slacking?
Analyze your operational metrics as well, somewhere in your process could be the explanation you need for the failure.
Come up with a solution, and a new metric goal, that’s how you improve.
This kind of goal-focused marketing is what AI marketing platforms like DataSlinger, help companies undertake to achieve their bottom line growth.
It’s time to make marketers’ jobs a little bit easier by taking a break from the everyday madness and laying down the right foundation.
The result: more time and resources for that creativity that is needed to take your business to the next level.
At Humanlytics, we offer advanced marketing analytics services and also have a process of identifying metrics in order to standardize definitions, and then see the data effectively analyzed to generate actionable insights.
Our Dataslinger tool is designed to help you bypass any analytics hurdles and make analytics at your business effortless.
We currently support integration with Google Analytics, Facebook Ads, and Google Ads, and if you are integrated, don’t hesitate to reach out to us at bill@humanlytics.co, or visit our website at www.humanlytics.co for more information about what our product can do for your business.
