Marketing's love-hate relationship with metrics

By Jerry Rackley

Gone are the days when a marketing executive could report in vague terms to the CEO about things like brand equity, saying, “it’s at an all time high!” Right. And you know this how? “Show me the data” says the wise CEO. Measurements really matter. Lord Kelvin’s quote has oft been paraphrased, “if you can’t measure it, you can’t measure it.” This is truth, but at the same time, it’s not the whole picture. We marketers love metrics for what it they tell us, but if we're honest, we get a little nervous about being held accountable to them.

At a marketing advisory firm with the name “Demand Metric”, you would think measurements are considered important, and they are. Yet, there is some sanity needed in the measurements discussion, at least where marketing is concerned. As with many things in business and life, there is a spectrum when it comes to measuring marketing, and the place to live on this spectrum is somewhere in the middle, not at either end. But first, we have to know what the end-points look like.

At one end of this spectrum, we have a frantic urge to measure anything and everything possible about the work of marketing. This isn’t healthy, because what often results is a fixation on that which is easy to measure, not that which is necessarily meaningful. Albert Einstein, whose genius no one questions, said this: “everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.” Well said. Who am I to argue? If your marketing metrics dashboard has 29 “key” marketing metrics on it, you might be living on this end of the spectrum.

On the other end of the spectrum is the point where nothing gets measured. It’s a place where marketing operates on feelings and instinct. I believe that both feelings and instincts have a place in the lexicon of marketing leadership, but in the absence of some metrics, they can lead you to places you never intended to go. This metrics vacuum is like driving a car with no dashboard – you’re never really certain how fast you’re going, how much fuel you have left or if that “Check Engine” light is on. Without a set of indicators, you can start well but finish poorly, or never finish at all.

So where on this spectrum should marketing live? It will come as no surprise that the answer is not the same for everyone, but there are some principles that will help you find your marketing metrics happy place.

1. Start with objectives. You can’t just randomly pick out a set of metrics and go with them. Business objectives, not marketing objectives, should drive metrics selection. To not consider business objectives first is to put the cart before the horse.
2. Select metrics that someone besides marketing cares about. As marketers, we’re often guilty of using jargon and speaking in terms that only marketers care about. Perhaps we are zealous guardians of the corporate brand, growing and nurturing its brand equity. However, how can you measure that, and how can you help the CEO understand the connection to revenue, profit or other metrics the CEO cares about?
3. ROI is a good metric, but not always appropriate. To listen to some marketing pundits talk, ROI sounds like the holy grail of marketing metrics. It’s great when it makes sense, but it doesn’t always. When a sales process is pretty simple, it’s relatively easy to track the revenue that comes from a marketing campaign, and then calculate the ROI. But many sales processes, particularly in the B2B world, are long, convoluted and complex. It’s hard to tell which of the many tactics deployed over the course of an 18-month sales cycle influenced the purchase. Use ROI when it makes sense, but recognize that quite often, it won’t.

So how can you find out where on this spectrum you should live? There are some excellent resources to help you, both in the Demand Metric library and through some of our partners:

• The Demand Metric How-to Guide, “Implementing Effective Marketing Dashboards”
• Stephan Sorger’s new book, Marketing Analytics, which we have had the opportunity to review and find consider it an excellent resource.
• Hubspot CMO Mike Volpe’s recommendations, “The 6 Marketing Metrics Your CEO Wants to See”.

The value of picking the right metrics is realized in two important areas. The marketing team not only understands how it’s doing, but has the evidence to prove it. This proof creates the second, and more important benefit: credibility. Until the CMO can provide evidence of marketing’s impact through the right measurements, it will lack credibility. This credibility gap will keep the CMO from being a full-fledged member of the C-suite.