KPIs: Friend or foe? How to maximise value for your CMO and the board.
- Beth Lloyd-Wright
- May 30, 2022
- 7 min read
Ahh, KPIs, ironically despite my expertise in digital and social media marketing, this is my least favourite topic. Most clients and marketing peers I speak to at the moment are struggling with this. It’s a constant conversation for me lately. And it seems we’re not alone. The Nielsen annual marketing report (released in May this year) stated that fewer than 20% of marketers surveyed say they feel confident in their ability to measure their return on investment (ROI). I mean. Wow.
Fewer than 20% of marketers surveyed say they feel confident in their ability to measure their return on investment (ROI).
And, currently most marketers are relying heavily on digital, naturally so, given the pandemic. And along with keeping customers and clients one of our biggest business goals is customer acquisition. How can we best measure that when the majority of marketing professionals actually are unsure about what KPIs to track and measure for success?
The way I see it, there are two core issues here: the lack of confidence to report, and the lack of knowledge to report.
I strongly believe that confidence is the greater challenge! Because the answer is relatively simple – but can be overly complicated, especially so in the early days (for example, setting up KPI reporting templates, UTM tracking, conversion pixels, goals setting on GA etc etc) and on top of this we can often be side-tracked by senior/board level stakeholders questions – because they too, don’t understand what and how to measure ROI.
What a vicious cycle.
Another element to consider here too, is the wealth of data available to us. Impressions, website visits, visitor time on site, clicks, likes, comments, shares, click through rate, engagement rate, form submissions, downloads, traffic source….I could go on! And that’s just the stats you can analyse before paying for any advertising.
The majority of marketers are at an impasse when it comes to KPIs
It’s no surprise then, that the majority of marketers are at an impasse when it comes to KPIs. Which ones do you track? What do you feedback to your organisation on? Which metrics actually matter??!!
How do you make KPI manageable, and understandable for your key stakeholders?
How I’ve come to accept the KPIs challenge (and manage it) is to collect as much data as possible. Yep. All of it. (And I appreciate that doesn’t sound simple on the surface.) I think as marketers we can’t assess success effectively, if we don’t have the full picture. But, all this data is not really useful for every campaign, every stakeholder, or, every business. This is where our trusty friend the sales and marketing funnel comes in.
If you can assign certain KPIs to each stage of the customer journey and buying cycle you will more clearly be able to attribute digital marketing effectiveness. Ultimately, all KPIs need to be aligned to your business objectives.
Because, trying to be everything to everyone at the same time means you could end up in random acts of tactics, peaks and troffs in the data and no serious long-term improvement in any one area.
Ultimately, when you’re reporting upwards, understanding the bottom line is the most important metric overall as it justifies your true ROI. With the wealth of metrics at your disposal you need to use the data to tell a story.
Doing this will:
provide more valuable insight (what’s working, what’s not and why)
bring your conversations with stakeholders to a more strategic focus.
What KPIs are most useful?
For social media specifically you could look at it like this: If your business objective is to ‘deliver significant business growth’, then your marketing goals may be:
Better known in your core market(s) : AWARENESS
Develop strong relationships with clients : ENGAGEMENT
Increase sales qualified leads : CONVERSION
The social KPIs and tactics that support this then would be:
Impressions and reach
Combined likes, shares, RTs, replies, comments, views and Visits to website
Downloads and demand generation
This is a rudimentary way to look at it, but you can start to see how much more clear the story becomes when you take all that data and simplify it to what matters to your business.
On their own (especially the likes and comments on social) are just vanity metrics. They don’t matter in isolation – unless your marketing goal is to increase ‘in-channel engagement on LinkedIn’ for example.
This story you build with KPIs also helps with experimentation. Over time this can help you build a better more informed view about your marketing activities and ultimately your customers.
To support your efforts when it comes to measuring KPIs, it’s useful to have a decent MarTech stack. Again, knowing your core business objectives first will help refine the options.
For me, as I predominantly work with social media, the raw data from each platform is far more accurate and informative than any pretty looking report Hootsuite or SproutSocial give you. I’ve also had a great experience with Meltwater in the past and would recommend them as a great tool for social listening as well as reporting. In fact, speaking of Meltwater, they released a report in collaboration with Harvard business Review in summer last year, titled: “A blueprint to help companies fully capitalise on social media investments”. In the report Neal Schaffer, author, speaker, and CEO of digital marketing agency PDCA Social was heavily quoted and he shares some awesome insights about the future of social media ROI. He has a clear view that it’s not necessarily the place to market your product/service but to develop relationships with people and find customer insights. He talks about assessing value of social media by giving more weight to how the relationship you built with your customers lead to improved product development. Really measuring the quality of relationships that provide business change rather than the metrics I’ve been talking about.
But whilst this is inspiring and very useful, I don’t believe this approach fully lends itself very well to SMEs and service based business.
Metrics still matter, but B2B marketers could start preparing for the incorporation of relationship based KPIs in the near future.
Ultimately, spend the time now getting this right. Speak to your stakeholders, define your goals, keep your KPIs updated regularly. Getting into the habit of checking stats across your key channels and record, record, record. Your professional instinct will go a long way but if you can back it up with some figures, then that’s all the better.
Prefer audio? Listen to the full discussion including insights from industry experts in the BMC Marketing Podcast.
Further reading: Citations and references
Measurement is a universal challenge
The proliferation of new platforms and devices amplifies a shared pain point among companies of all sizes: cross-channel measurement. In fact, fewer than 20% of marketers surveyed for this year’s report say they feel confident in their ability to measure their return on investment (ROI). This illuminates a significant disconnect between marketers’ main objective for the year (customer acquisition) and their ability to measure the success of their core marketing tactics.
Nielsen Annual Marketing Report, May 2021 ‘Era of Adaption’
Understand your why and be clear about how each MarTech tool guides you toward success.
Where are you going to achieve a greater ROI?
The trick is actually more simple than it may seem.
You’ll generate ROI when you test assumptions and land in the right place at the right time.
With measurable and actionable results, you tell a more informed story about your customers.
A better story leads to better experiments. Before you know it, your marketing machine does all the heavy lifting for you.
For example, your life is easier when you put the majority of the load on your MarTech stack.
Your MarTech tool stack is the key to achieving successful ROI in your marketing efforts. Without it, you’re Captain Ahab in the ocean minus a paddle and spear.
Neil Patel blog re MarTech stack, https://neilpatel.com/blog/martech-tool-stack
More Ways to Expand on Social
In addition to the need to dive deeper on direct customer relationships, gaps remain between current and potential social media use in tracking brand health, monitoring competitors, researching product development, and strengthening performance marketing.
Vanity metrics such as followers, clicks, and comments can cast a rosy glow over social media marketing activities. But marketers can dive deeper by leveraging multiple social media metrics together. For example, considering your market share, your competitors’ market share, and social share of voice— which measures percentage of brand exposure on social media against a competitive set—can reveal performance gaps. “If we have 50% market share, but only 5% of conversations are around our brands and 95% are going to our competitor who only has 10% market share, that’s an indication that maybe we’re losing market share and maybe this competitor is gaining because they’ve tapped into social media a lot better than we have,” says Schaffer.
Data and analytics are key to both understanding customers and measuring social media impact and performance gaps. Identifying and selecting the right tools is critical, but so is learning to use them to drive decision making without drowning in data. Many marketers are finding dashboards key to balancing the two.
“My own use of analytics has evolved,” says Landauer. “I used to just show people big shiny numbers, but those big numbers don’t really mean anything. I’ve tried to get more granular over time.” This must be done carefully, however. “The main thing is don’t look at too much [data],” he explains. “Look at the few things that you’ll actually use to make decisions, and act on them.”
This balance should get easier as measurement tools increasingly incorporate artificial intelligence and machine learning to identify actionable data that align with marketing goals and to recommend prescriptive actions to address gaps and optimize performance.
Beyond standard social analytic metrics such as sentiment, to truly reap more value from social media, Schaffer
“The greatest ROI of social media might not be in ad spend,” says Schaffer. “It might be in the ideas and the relationships you build with people that have helped you develop the number one product in the market or have helped you expand to a new market.”
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