Thursday, August 04, 2016
Talking about marketing metrics
There is an interest, even a desire, to demonstrate the return on the investment put into marketing and it is handy to have a few Key Metrics to support this. These may be displayed on a 'dashboard' and track the responses and value of a marketing campaign. For email campaigns we add an analytic tracking code enabling us to follow via the client's Google Analytics, the source of enquiry. So we can track who has opened the email, then clicked on a link to the sales offer on the html email and gone to the landing page and in due course placed an order we hope. Monetary values can be assigned to this based on knowing how much the campaign cost, the cost of each lead and the value of the resulting order should the visitor take this path. In practice it doesn't really tie up. It is a relay race from the email tracking handing over to the analytic tracking and ultimately the financial software. In theory we also know geographically where customers and prospects are located from their server's IP - but the buying office and accounts people are often indifferent locations.
Of course it would be very nice to have this path from marketing initiative through to sales and shipping, so different campaigns could be compared.. But there are other influences at work. The customer may already be familiar with the brand from other advertising and ordered because it seemed cheaper than the usual price. Even in a relatively simple situation where customers respond to a promotion and inputs and outputs are measured often to an implied accuracy that does not really exist.
And here is the core of the issue. Numbers can be expressed to several decimal points which sounds impressively accurate, but typically relies on data that not only lacks such precision, but can actually be very misleading. Take an example. When I worked in the lighting industry, member companies submitted monthly sales returns by category of product, which the industry body compiled into a total figure for the different markets and product. The completed forms were returned showing our numbers, the total market and by simple math to calculate market share as a percentage. It looked impressive that we had say 50.35% share of a market, but it was a total market only of the member companies, it excluded imports which in several categories were growing fast.
The end figures are only as good as the data that is entered and too often this is at best a guess. So the marketing metric needs to ne treated with caution.