NEW! Listen to the article
“There is nothing so useless as doing effectively what should not be done at all.” – Peter Drucker
In our increasingly data-driven business environment, marketing managers and data analysts often work together to build dashboards full of metrics to guide their consumption, channel management, and strategies for the year.
Unfortunately, most teams end up tracking outdated metrics that do not specifically relate to Marketing’s key performance indicators (KPIs), or that do not provide meaningful insight into Marketing’s contribution to growth pipeline and revenue.
Marketing teams need to be agile and lean in order to bring the greatest possible value to the wider organization so that they do not have time to track measurements that do not provide value. Here are a few examples of marketing metrics that are ready to retire, and suggestions for better metrics to replace them.
Useless Marketing Metric # 1: Leads
Leads – whether they are raw, marketing-qualified or sales-qualified – are a worthless measure for small businesses to track in isolation or even in conjunction with several other measurements.
Marketing forms equate to nothing but beginning interest, and they are only the beginning of a customer’s journey. Leads obtained from these forms can be misleading if you do not see where dollars start to seep down.
What to try instead: Pipeline dollars pr. channel
Why it’s better: Instead of monitoring any number of leads per. day, which may or may not convert, provides pipeline dollar tracking per. channel you able to see how the dollars you invest contribute to the real bottom line – earnings.
Consider the table below. Which column will get the management’s attention?
Useless Marketing Metric # 2: Cost per Lead (CPL)
CPL tracking is a great way to throw money at cheap lead sources. Sure, you’re probably tracking close / won conversions along with it, but that’s not the whole picture. You also need to understand how much it costs to acquire new customers, and CPL and conversion rates are only part of that equation.
What to try instead: customer acquisition cost (CAC)
Marketing + sales costs / number of new customers = customer acquisition costs
Why it’s better: Regardless of the cost or conversion rate, leads provide no value to the organization until they have converted. We are looking for the true cost of acquiring a new customer, balanced in terms of revenue over the customer’s lifetime.
Consider this example of comparing leads from Google and Bing. In this case, looking at CPL only may lead to an uninformed decision about channel optimization.
Useless Marketing Metric # 3: Vanity Metrics
While email clicks, bounce rates on websites, and keyword placements on the first page can be meaningful to the application optimization marketing team, there is no point in spending time on “interesting” things, such as Facebook likes that do not directly contribute to the pipeline and turnover .
It’s OK to keep a general pulse on some of the individual channel performance metrics, but superficial social media metrics should not serve as your north star for digital marketing activities.
What to try instead: customer lifetime value (CLTV or CLV)
Average turnover per customer x average customer lifetime = Customer lifetime value
Why it’s better: Calculating customer lifetime value as a marketing metric provides a benchmark for which segments and vertical industries bring long-term, profitable customers that increase revenue. Consider this comparison that looks at vanity measurements vs. CLTV. Which provides more value?
The role of the marketing team is to attract, retain and engage customers. That process starts with building the pipeline and ends with closed revenue from marketing strategies, programs and activities. Keeps track of right Marketing metrics are critical – especially for lean, effective teams.
More resources on marketing metrics
Advanced measurement strategies: Metrics that actually matter
Close the marketing performance gap: How to start delivering on the most important metrics
The marketing metrics that matter to the bottom line