As you follow customers down the marketing funnel, are you measuring the right things and leveraging the data necessary to paint as clear a picture of your campaign’s performance as is possible? You’re not simply looking for numbers, after all, but intelligence that will help you measure and understand the impact of your efforts to determine the value, and whether what you’re doing is good for the short-term, the long-term, or both.
Ironically, that means you need to take several steps back in order to determine what you should measure.
“One of the biggest challenges in measuring isn’t about the metric, but about the holistic view,” says Douglas Brooks, a New York-based executive vice president for the consulting firm Marketing Management Analytics. “You have to measure in context — consider things like operations, weather and what’s in the news. If you’re selling outwear, for instance, did sales drop because of your marketing campaign because the weather’s warm?”
David Ricciardi, president of Proximo, Inc., a business-intelligence company based in Jersey City, N.J., agrees.
“Data is a more-the-merrier thing,” he says. “You want as much data on the customer as you can get, and then use it to identify the key indicators that drive their decisions.”
From there, you measure activity on different channels, traffic levels and consider things like demographics and online behavior. When you put it all together, you may find that customers with a certain level of income who visit your website at a certain time and look at two specific pages are the ones most likely to buy, he said.
The mischief begins when you put that conclusion in context. If your data set’s too narrow, for example, you may discover that when you overlay your buyer’s profile over the market as a whole, you’re only dealing with 5,000 people.
“You want to look at segments that are reasonably large and will get you to your revenue goals,” Ricciardi says.
Plan Your Measurements Up Front
So how do you do that? Marc Engelsman, the vice president of strategy and analytics at Digital Brand Expressions, a digital marketing agency based in Princeton, N.J., says “it’s essential” to identify your key metrics in advance. Many measures, he notes, need to be properly configured with tags, code additions or triggers. If you want to track website conversion in terms of lead generation, for example, you could designate a contact thank-you page as a trigger for that conversion. Of course, in order to set that up, you need to have decided ahead of time to track conversions.
Besides that, Engelsman says, identifying metrics in advance allows you to generate a baseline or benchmark of current performance for you to measure against in the future.
“Without the baseline, data you collect won’t allow for pre/post performance insights,” he notes.
“Most companies still don’t get ahead of this,” adds Brooks. “They deal with data after the campaign. The smart companies think about the metrics they want to capture up front.”
Less Gut, More Data
Another step is to rely less on your instincts.
“Most marketing people use their gut a bit too much,” Ricciardi says. “You want to use data to validate your intuition.”
He suggests starting by compiling customer data from both internal and external sources and combining it with demographic data. “Start with a broad set and identify areas of high activity,” he says. “That’s where you get into the measurement of activity and can develop KPIs.
Basically, Ricciardi is saying start with a broad set of information and narrow it down until you can identify your target. Once you’ve done that, you can start to think about how to move the target further down the funnel. And, he points out, marketers need to take the same approach when identifying their customers’ key behaviors.
Engelsman points out that most analytics platforms already capture large swaths of data on visitors and allow you to segment it to get at comparative insights based on things like location, device, channel, time variants and conversions. At the same time, he warns that a data set that’s too holistic “won’t necessarily provide a clear, actionable analysis.” If you decide situational data, like weather or news events, are impacting performance, a number of sources allow you to gather such information after the fact. This is another reason for companies to identify key performance indicators upfront, he says. “Companies need to understand the value of and investment in all these metrics from the start.”
All of this requires a solid grounding in data. That skillset that will bridge the gap between the realities identified by your metrics and the gut feel many people in marketing still rely on. If you don’t change your thinking away from gut instinct to data-backed reality, “you’re not doing as well as you can be,” Ricciardi says.
Measure in Context
But just as you can’t measure data in a vacuum, campaigns and user behaviors don’t take place in a vacuum. It’s important to know the purpose of each campaign, Brooks says — for example, are you trying to drive brand awareness, in-store sales or push a new product? At the same time, you must take into account that you can’t control customer behavior, only influence it, and not always in the way you intended. For example, your brand-awareness campaign may also drive sales, so you must be prepared to measure sales response even for campaigns not intended to directly generate revenue. Such “incrementally,” as Brooks calls it, “is very important.”
Not only that, but campaigns can’t simply be walled off and measured in a silo. While a media channel may generate $1 million in sales, 10% to as much as 40% of its impact could be generated as result of synergies and interactions with other media, operations drivers and even external factors such as the economy and weather. Turning it off won’t necessarily equal a $1 million loss in revenue, since all activities could have both a direct and indirect effect.
“You can’t assume every sale from a campaign resulted only from that campaign’s intent,” Brooks says.
Different Data, Different Uses
Finally, it’s important to remember not all data can be applied to the same use. While understanding what’s worked in the past lets you plan for better results in the future, Engelsman warns that “you need to be careful to understand the data in terms of trends and not [make] knee-jerk planning decisions based on one-off events.”
As an example, he recalls a termite-control company whose marketing director wanted to hold off on committing its springtime general media campaigns until the business experienced initial termite swarm reports. Since swarming is largely dictated by weather conditions, which can’t be precisely predicted months in advance, such an approach would have been expensive and the time delay in getting advertisements on air would have missed a large number of initial sales.
“By looking at data trends on swarming activity over years, we were able to designate the ideal campaign window start time and length to ensure coverage before and during key activity periods,” Engelsman says. “This allowed for more effective and efficient planning of the media buys, though it didn’t do anything to help creative development for the campaigns.”
While individual campaigns may have different goals, different approaches and different audiences, identifying your measures of success before the campaign begins is the critical step in deciding whether you’re capturing the right information. Determining whether your work in fact succeeded then requires you to analyze the results in a way that considers a number of factors that are beyond you control, like the weather, how news events might impact a user’s behavior or any number of other factors.
Mark Feffer is a writer and editor who focuses on topics related to technology, analytics, technology, and workforce development. His most recent work on technology has been copywriting for the website of services provider INSYS Group (www.insys.com) and stories on the use of IT in recruiting and workforce management for SHRM Online and Dice Insights. Mark is a paid contributor to THINK Marketing.