Few marketers these days would dispute the need for metrics to provide some measure of achievement for their activities. There are, however, many issues related to their effective use.
No metric is worth measuring unless objectives can be set against it. Objectives are, in fact, vital if the metric is measuring the desired outcome from an activity that has required investment – in financial and/or human resource terms. The objectives serve to tie together the past experience, the ongoing learning from it, and the expectations and requirements from the activities being planned for the future. Nevertheless, even if such metrics have properly established objectives, are regularly monitored and used to evaluate plans, the majority are – despite being in themselves of value, not the metrics critical to the business.
In an environment where the only metrics that are measured and valued relate to video views, click-throughs and short-term engagement (related to sales activation) etc., however, the marketer is flying blind. They can see what is happening, but not why, nor hope to forecast what is likely to happen in the future. Additionally, the attention is often focused on particular known customers and prospects – the low-hanging fruit. It is too often forgotten that the audience in a particular channel, however large, is frequently very unrepresentative of the total target market for the brand. In other words, the metrics end up measuring what is easiest to measure, rather than what will really impact on business growth.
For instance, there would seem to be some confusion amongst marketers as to what brand engagement – a frequently used metric – actually means, and how to identify an ‘engaged user’. In a piece of research conducted with marketers by Marketing Week, nearly 80% of respondents believed that engagement measured ROI. One can only imagine the reaction of a finance director to the finding that whilst only 60% of those researched believed that a purchase indicated brand engagement, 84% believed that a positive mention on social media did so. This tends to reinforce the questionable usefulness of much brand engagement as a meaningful business metric. As Peter Boucher, the CCO of Addison Lee is quoted as saying: “(True engagement) either goes into brand and ongoing reputational management or it’s driving business outcomes. Often with marketers they focus on those little puffs of smoke and lightning bolts, but that’s not what builds businesses.”
Even the more strategic metrics can present problems. One of the most frequently misunderstood and abused terms in marketing, and thus its use in metric setting, is ‘awareness’. The word is bandied around in the worlds of marketing and communications as though it was clearly understood and served as some magic touchstone. It is certainly true, as most hierarchy of effects models, as well as the now commonly used purchase funnel concept, highlight, that the customer journey to purchase and loyalty begins with awareness. However, it can mean anything and everything unless precisely pinned down. Awareness should be ‘awareness of’, in the same way that one has heard an individual’s name, but never met them or learnt anything about them; if asked, the response would be ‘yes, I’ve heard of Sheila, but I don’t know anything about her’. Asking the ‘awareness of’ question is a potentially important first metric, but it takes a brand very little distance.
Unfortunately, awareness is far too frequently taken to refer to the next few stages along the customer journey as well, as prospects begin to learn a few things about the brand, start taking a bit more interest, decide that they like the things they’ve learnt and are coming to believe in the brand. These stages will vary by brand and category, and some of them may take place after purchase. They are not the same thing as awareness, however, and if vital in developing a customer’s relationship (however shallow) with a brand, need metrics of their own. These are strategic intermediate metrics, necessary to understanding how successful the brand building efforts have been.
Many organisations seem to see every metric as a KPI (Key Performance Indicator), not understanding that the word ‘Key’ is key. As noted, many metrics are of no great relevance to the overriding goals of the organization (particularly the financial ones) – and in no sense are they ‘key’. The number of ‘likes’ for a particular online post, the volume of tweets, or the number of followers for someone blogging on the brand’s behalf on social media, might be pertinent metrics to justify and improve such tactical communications activities, but they are not directly related to strategic objectives such as increasing market share or gross margin. Achievement of the targets (where they exist) for such tactical metrics may have a cumulative – but quite likely marginal – effect on the achievement of the strategic KPIs, but they are not what senior management usually needs to spend its time monitoring or concerning itself with.
Key metrics should ideally relate to every element of the marketing mix – not just communications, but the core product or service, pricing, customer experience, etc. Ultimately, what matters is putting in place a set of metrics, and KPIs, that enable the brand owners to readily understand and track how every significant marketing activity, and the investment being made in them, is helping to build a brand that attracts the growing loyalty of an expanding customer base: and thus, the financial health of the business. Good marketing plans recognise how activities relate directly to the achievement of the higher goals, whilst ensuring that sound metrics are in place for them.
Further discussion of this topic is welcomed.
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