Why is measuring marketing performance important?
Every Wednesday and Thursday evening, my friend and I go to the gym. We race for 2000m on the rower (he always wins) and they we lift heavy things and put them down again in the same place. Barring a recent back injury which took me out of commission for three weeks, we've done this every week since 1 November 2022.
On that first evening, I turned up to the gym with a wee notebook and proceeded to write down all the exercises we did, how many sets I managed, and the weight I lifted. I've now got my pal doing the same, but often we're the only ones in the gym doing so. We probably look really nerdy.
Why do I do this, when I could shave at least five minutes off the time I need to be in the gym and get home faster by just battering through the exercises back to back?
I do it because it allows me to:
see how far I've come since I started
set new goals for myself
keep me motivated
push me on the days I am struggling
have insight into when to dial back a bit, if something is niggling or doesn't feel right
I put effort into lifting weights. I give up at least two evenings a week. And it costs me £40 a month in membership. I need to make sure the investment going in is delivering results. Measuring performance on an ongoing basis is important.
Measuring the performance of your marketing activities on an ongoing basis is no different. If you invest time, money and thought into promoting your business, you need to make sure that it is working as hard as possible to achieve your marketing goals (whether that is bring in new customers, create loyalty and reduce churn, reduce cost of acquisition, or something else).
What marketing performance metrics should you be looking at?
I'd start by making a list of everything you can actually measure. Think about all the channels you use - what numbers can you draw from them? What about from your customer or sales data? Do you have information from prospective customers?
Write it all down, so you have good understanding of the data you have access to. It's easy to forget that a system or a tool that you rely on to perform one task actually holds information that is relevant for performance measurement.
Once you've got this, hone in on the ones that are critical to your business. For most businesses this is growth in sales (or the equivalent in another sector, for example donations if you work for a charity). This is your North Star.
Then look at all the other metrics which you have which would indicate a positive shift towards your North Star.
Marketing KPI examples
Positive indicators should show a deepening of engagement with your business. For example:
Increased visits to your website from new users
Increased repeat visits
Longer time spent on your site
More sign ups to your newsletter
Higher levels of positive media coverage
Reduced cost per conversion from paid search
I tend to record, but not place too much weight on social media metrics (likes, shares, followers etc) because too often they don't indicate a developing relationship with your customer. They don't clearly align with your journey to your North Star.
(That said, analysing the performance of individual social posts is helpful in understanding what engages your audience. Do it so that your posts get better over time.)
Baseline measurements and industry averages
Critical to making measurement meaningful is recording where you started. You need a baseline to evaluate against over time. Don't worry too much about whether where you are is "good", just look to consistently improve over time. You can research industry averages for the different metrics, but unless you work in a very niche industry, these can vary so much that they provide no meaningful insight.
Marketing performance reporting
Create a report which allows you to monitor progress over time against each of the metrics you have identified. Remember these should align to your North Star metric, so that the value that marketing investment is generating is clear to your CEO, your team, your stakeholders and yourself.
There are several tools you can invest in to do this, and this might be a worthwhile investment if you are reporting on a wide range of activities, across a large number of products, or in multiple geographies.
But if you are working on a smaller scale, or you need to prioritise your budget on the actual marketing (rather data visualisation of its performance) then a spreadsheet pulling data from Meta Business Suite, Google Analytics and your CRM system will do just fine.
Set time aside each week or month to update this, and create a clean and simple slide deck or word document which gives anyone who needs to know the key facts.
By the key facts I mean: the impact of the activity. "We had 33,000 unique website visits this month" means nothing to me. "We had an increase of 5000 unique visits to our website this month, which is a 10% rise on last month and we can track this back to our special offer to existing customers on our email list" gives me insight. And makes it so much easier when you later say "can I please have £1000 to improve our email system, which is only a tenth of the income email brought in for us last quarter?"
KPIs: Key Performance Indicators, Keep People Informed, or Keep Pointing It (out)
My last piece of advice around this is to share that slide deck or document whether people ask for it or not. Never forget your own internal publicity. Show your value and reinforce the difference marketing is making. It raises the profile of the marketing function as a strategic enabler and, over time, gets marketers a seat at the table for the big discussions.
And just like me with the barbell, on a day you're not feeling so rosy, you can look back and see how far you've come.
If you would like expert insights to improve your marketing performance, get in touch for a chat.