If you’re still counting email opens, page views and ad clicks, your days in marketing may be numbered. Vanity metrics like these aren’t enough. Today’s marketers need to do more than measure something that has already happened. They need to know why it’s happening and track that impact through the sales funnel to tie their marketing campaigns to customer lifetime value.
Until recently, marketers couldn’t effectively track marketing results across channels and through the funnel.
But with new technologies like customer data platforms and AI-driven analytics, marketers can now track customer activity as they move from an ad click or piece of content to an online order, phone order, or in-store purchase. Like the fictional Rod Tidwell from Jerry Maguire, marketers too can reasonably ask their campaign analytics to “show them the money.”
This new world of marketing requires new metrics that deliver a deeper understanding of customer behavior and what really drives sales and engagement. In the past, marketers might launch a campaign with a 40% off coupon to reengage at-risk customers, see a spike in sales and assume the campaign was successful. But they didn’t know what part of the campaign was successful. Was it the coupon, the product(s) advertised, serendipity or something else? There were simply too many variables to draw a straight line between cause and effect, yet there was no measurement tool.
Finding New Metrics That Matter
As marketers move away from vanity metrics to measuring intent and action, new terms will arise to measure success. Going forward, I believe these four metrics will matter most to marketers and their companies.
Customer Lifetime Value (CLV) Impact
Marketers have historically looked at CLV from a user perspective — as in, “What is this customer’s lifetime value?” Looking ahead, marketers should measure CLV more closely as it relates to campaigns, content, and quarterly sales. Specifically, they need to measure how their marketing efforts impact sales through the funnel and across channels to tie that directly to their business’s bottom line. This is sometimes referred to as attribution analytics because it analyzes the impact of campaigns and customer experiences on customer lifetime value.
Most attribution to date has been focused on top-of-funnel advertising, trying to solve the problem of ad-spend-caused conversion. Instead, focus on experience or pieces of content contributed. Marketers also need to implement an identity strategy, a holistic mentality to drive higher percentages of users into logged-in experiences, which is especially important with the death of third-party cookies. They must also implement a closed-loop feedback system that drives constant optimization.
Marketing Maturity Score
We’re most comfortable doing what we know. For marketers, this often means building campaigns around their own experience rather than the customer’s experience. For example, a marketing team might decide that what’s needed is a campaign to reduce shopping cart abandonment, but data might point to a drop-off between free trial sign-up and subscriptions instead. This is where recommendation engines can be invaluable in helping marketers create next best experiences that drive results. But this is also where marketers are most cautious.
Fear of experimenting with success is one of the biggest mistakes that marketers make. They tend to view campaigns with a “one and done” mentality. If a campaign is producing results, they leave it alone. If it isn’t, they try to figure out how to make it work. What happens is that marketers focus too much on improving underperforming campaigns rather than improving their most successful campaigns. A marketing maturity score can be helpful in showing marketers how much a campaign has developed over time.
Most marketing maturity models focus on measuring activities instead of results. Instead, measure by the velocity of change. Ask yourself these questions: What is your mindset and willingness to make change? Are you focused on results versus activity? Do you focus on data and then activities instead of activities and then data? Are you focused on your customers’ objectives or your objectives for them?
Data-driven companies have flipped the model to focus on results and then choose activities based on that data.
This is bigger than just omnichannel analytics. Cross-channel visibility provides insight on what channel activities are driving deeper engagement and why they’re creating engagement with the customer. For example, a marketer might be able to see that a customer read a particular blog and then signed up for a newsletter, but they may not understand what in the blog drove that action — or even if the blog was the driver. Metrics that measure this correlation by digging deeper into content affinities can help marketers understand what’s working in their content and repeat that success by recommending similar content. In this way, marketers understand the customer journey so they can better control it.
Start by measuring your percentage of connected identities to understand the strength of your relationships. Companies that have a persistent login, such as Facebook or Spotify, are examples of successful cross-channel relationships. By providing relevant content specific to customers’ needs, you justify them logging in.
This might be the most important marketing metric of 2020. Marketing technology can, for the first time, measure the health of the customer relationship: engagement levels, churn likelihood, propensity to buy and more. Marketers tend to focus on moving customers through the sales funnel, but much can be learned by understanding why customers drop out of the funnel. This is a crucial metric for driving better customer engagement. When you know what kinds of content and campaigns are promoting healthy engagement, you can ensure customers get a steady diet of it. Move beyond NPS scores, and think holistically.
Marketers will probably still measure “eyeballs” out of habit. But it’s what’s happening behind those eyeballs that matters. Understanding buyer intent, content affinities and campaign impact is the new math for marketers. Marketers now have the technology to create KPIs and metrics that really matter, from boosting customer lifetime value to promoting healthier engagement. Anything less won’t measure up in the new era of marketing.