What are the most compelling ways to measure marketing success?
Direct marketing purists will almost always default to cost-per-lead and cost-per-sale as the critical metrics in any campaign. That said, today’s marketing programs are more multifaceted than ever before—and beauty (in terms of success measures) is in the eye of the beholder. Each sub-discipline within marketing looks at the craft through a different lens. Click-throughs, downloads, opt-ins, likes, and followers may constitute success for some marketing practitioners, while exhibiting thought leadership and strengthening the brand are the success measures for others. Even with that diversity, most marketers will agree that we’re held accountable for our impact on sales.
In fact, direct marketing programs rarely show a strong return on investment in a one-off campaign. The pioneers of direct marketing recognized that marketing is an iterative process with success measured downstream of the initial campaigns. However, today’s instant gratification culture looks askance at campaigns that produce nominal results from the outset—or ones that fail.
But if your organization isn’t occasionally failing, you’re likely not introducing new products, exploring new markets, or testing new marketing tactics. General Colin Powell summed it up best when he said, “Success is the result of perfection, hard work, learning from failure, loyalty, and persistence.”
Success that endures
To build an enduring formula for measuring marketing success, you need to examine how your marketing strategy is being executed and refined against three fundamental building blocks.
Database: Whether it’s B2C or B2B, the first order of business should be shoring up your ability to measure the growth and performance of your database. Outside of mass media, communicating with your customers and prospects effectively depends on the health and mass of your data. Analytics tools and modeling strategies create test-beds for refining and building performance baselines against which to measure. Key performance indicators (KPIs) based on growing the reach and penetration into your target audiences are foundational to marketing success. Every marketing effort that isn’t purely awareness or brand-building in nature should be examined in this fashion.
Lead generation: You should compare the performance of all marketing activities on a cost-per-lead or cost-per-customer-acquisition basis. Marketing programs favored by an organization’s sales team and its prospects go immediately to the top of the list. Efforts that provide those two parties with the desire to interact generally produce great results.
Social media is finding its stride as a lead generation tool for consumer marketers who can push targeted messaging and offers to customers at a relatively low cost. Trade shows and customer-facing events may not fare well when looked on a cost-per-lead basis. However, high initial cost-per-lead doesn’t necessarily mean an activity should be discounted. All things equal, more leads at a lower cost certainly help define what’s successful for marketing, but the ultimate test is measuring against lead lifecycle and conversion to sale.
Measuring leads to sales: Naturally, you’ll experience significant attrition from initial leads to sales-ready opportunities for a variety of reasons. But you could well be in position to capitalize on these leads’ next buying cycle.
That said, the next challenge is planning, measuring, and monetizing the incremental touches needed to convert warm leads to sales-ready leads. Following the lead lifecycle through the CRM and marketing automation blender adds complexity in tracking. So, retaining the original campaign source code becomes critical in establishing the actual cost-per-sales-opportunity. Additional touchpoints through social media, outbound calls, direct mail, and other campaigns now come into play. The cost-per-opportunity will generally be many times higher than the original cost-per-lead, especially for big-ticket items with long sales cycles.
Test, refine, succeed
Ultimately, there are a number of compelling ways to measure marketing success. Are you gaining traction with a database of prospects and customers who allow you to market and remarket to them? If so, you’re setting the stage for future success. Are you continually improving your ability to identify and focus on marketing activities that are generating leads at a lower cost? Are you finding lead sources with a higher conversion rate to sales-ready leads, or actual sales? Are your lifecycle marketing strategies improving the flow from prospect to sales opportunities?
To ensure that you’re able to answer yes to those questions over the long term, use the “Test, Succeed, Test, Fail, Refine, Succeed” formula—but also set KPIs for each step along the journey, measure your efforts, and show the link between your marketing efforts and closed sales.
Craig Conard, Sudden Impact Marketing
Craig Conard is president of Sudden Impact Marketing. After graduating from Ohio State University in 1983, he began his career in the then-emerging high-tech and research fields, where he gained experience combining old-school direct marketing techniques with innovative marketing technologies. In the ensuing 14 years the Ohio resident managed sales and marketing teams for high-tech Silicon Valley firms through a local B2B tech agency. Then, in 1997, he launched Sudden Impact Marketing, to focus on multichannel marketing for B2B companies. According to SIM’s website, Conard’s “roll-up-your-sleeves, sweat-the-details, win-at-all-costs approach is only tempered by his affection for his team and love of a good laugh.”