Marketing KPI's: Choose Wisely
Did you know that not all Marketing KPI's are created equal?
Some have great value for your business. And some are mostly irrelevant.
So, just like Indiana Jones in his Last Crusade (which wasn't his last crusade at all, but that's a conversation for another day), you must choose wisely.
Let's take a look at some of the most common KPI's for B2B businesses and explore when they make sense, and when they don't :)
Follower Growth
This is a big one for anyone focusing on their digital presence. But what does it actually tell us about our digital presence? Well, that there are some people who have found us interesting enough at one point or another to give us a follow. But NOT interesting enough to take an action. So there IS opportunity there. But NOT if you leave it at month-over-month or year-over-year growth.
⛔DANGER⛔ If you're not TALKING to your followers, getting to know them, and finding out what drew them to you in the first place, having them is mostly irrelevant.
Website Visitors
We all have a website, right? I feel like it's one of those things that people have been taught makes a business "legitimate". So, if we have a website, we better get people to visit it, right? This is the measurement of that. And a lot of SEO services are focused on getting MORE visitors to your website. Which is great...IF they're the right visitors.
⛔DANGER⛔ If the people who visit your website don't have a next place to go that's in alignment with their current level of relationship with you, your website isn't doing it's job. And if you're bringing people to a place where the representative isn't doing it's job...NOT great for a funnel.
Social Media Engagement
Just like with Followers, people love to talk about the importance of engagement. And I'm not going to argue; engagement is good. REAL engagement that is. You see, social media engagement is mostly about likes, comments and shares. So much so that "experts" have created what are called Pods of people who provide that type of engagement. But that's not meaningful engagement. Because it doesn't actually start what could be a business conversation.
⛔DANGER⛔ If you're faking engagement just for the numbers, you're wasting your efforts. You may be looking good from an algorithm perspective, but if your social media presence isn't contributing to business, it's not doing anything for you. Small, legitimate engagement is better every day of the week.
Pieces of Content Published
So easy to measure. And another one that's mostly irrelevant unless people are ENGAGING with your content. And as we saw in the Engagement piece above, meaningful content, that gets engagement from your target customers, is really what matters here.
⛔DANGER⛔ If you publish a social media post every day AND a blog post once a week AND you don't have interested parties getting into conversations with you about the content, the content might as well not exist.
Event Attendance
This is another pretty common marketing KPI. If I host an event, how many people come to it? And it's actually one of the easiest things to measure. But if you don't know WHY your event attendance matters, neither does measuring it. When someone attends one of your events, it means that they WANT to be in the same room (either in-person or digitally) with you. That means there's something about you that is attracting them. Do you know what that is?
⛔DANGER⛔ If you DON'T know what that is, then what's the value in knowing the number of people that were there? It might be nice to celebrate, but it's not going to teach you anything, and those people won't put themselves into a funnel on their own.
Return on Investment
Return on Investment, or ROI, is a measurement that shows us what we got for some money we spent. So, let's say we bought some ads that allowed people to click through and book a demo, and then we know that some of those demoes turned into business. We subtract the marketing expense from the sales growth, then divide it by the marketing cost, to see the return on that investment.
⛔DANGER⛔ The tricky bit is that, there are very few customers that you have that will attribute their business to ONLY ONE TOUCH. Actually, I've NEVER seen this be the case. So, while the ad (in this case) might be the catalyst for the purchase, it's important to understand how other efforts are contributing as well.
Marketing Qualified Leads
Oh, the famous MQL. This is where we decide that a person who has engaged in some marketing interactions is now qualified.
⛔DANGER⛔ I'm jumping right to the dangers on this one, because the trouble is that we give clicks, likes, downloads and other things of that nature "points" that show us who is qualified and who is not. But we haven't actually ENGAGED with these people, so, best case scenario, this is a GUESS. And that's what the sales team LOVES right? Us sending them leads that we "guess" are qualified?
Customer Acquisition Cost
Customer Acquisition Cost (or CAC for short) measures that amount of money it takes to convert a potential lead into a client. I do quite like this metric, but it takes a HUGE amount of effort for it to be accurate: 1) the cost of contributory marketing campaigns, 2) the cost of the time of the marketing team to produce (and report on) the marketing campaigns, and 3) any direct contact with the potential client based on an accurate hourly rate of each employee.
⛔DANGER⛔ Honestly, that's a LOT of reporting. The time for which could be spent doing activities that actually CONNECT to the customers. So while this metric is fun to know, and can help make budgetary decisions, if you're low on resources, this is NOT the number one place I would spend them.
Lifetime Value of a Customer
Whoa, hold it Tracy. Isn't LTV a customer service metric? The lifetime value of a customer isn't just relevant to the client care team. It's relevant in marketing because, when we know how much we can expect to make from certain customer profiles, we can make "better" decisions on where to put our marketing budget. It's also good to compare against your CAC to ensure you're not spending more money obtaining a client that you will receive in revenue over their lifetime.
⛔DANGER⛔ Again, I'm not going to pretend this isn't a good thing to know. But, if you're in a small marketing team, and you're trying to create funnel right now, this is an activity for later. Knowing it isn't going to get you leads today. So just be wary how much time you're spending calculating it.
What's Missing?
What's missing for me, what's ALWAYS been missing for me, is a number that was actually meaningful as a leading indicator in marketing. NONE of the above KPI's fit the bill. But there is something that does.
CONVERSATIONS.
But wait! Conversations aren't for marketing; they're for sales.
OK. And how's that working out for you?
If we WERE having conversations in Marketing, how might that address the dangers outlined above?
Follower Growth - we could start conversations with our followers, and identify people who might be interested in buying.
Website Visitors - we could invite our visitors into a conversation where team members can actually meet them.
Social Media Engagement - we could invite the peeps who engage in our content to have a conversation with the creator, because we're clearly interested in the same conversations.
Pieces of Content Published - we could produce content that MATTERS to the people we want to read it, because we know that that is.
Event Attendance - we can create community in our events, giving our prospects a chance to voice their opinion AND hear ours.
Return on Investment - we could spend substantially less money, which would make our ROI numbers look amazing.
Marketing Qualified Leads - we could introduce peeps to the sales team who already have a relationship with the business (aka better leads).
Customer Acquisition Cost - we could have our team doing more meaningful activities, thereby decreasing the cost of acquisition (and the business would be able to FEEL the ease, instead of spending a lot of resources on reporting on it).
Lifetime Value of a Customer - we could increase the potential future revenue from clients by seeing them as people first.
So, one thing can actually have a positive impact on ALL the other Marketing metrics?
Hmmm.
If you're intrigued by what it could look like to take your current processes and focus on conversations instead of empty numbers, let's chat.
