I’ve heard many times people that run good businesses complaining that they don’t know their real time marketing performance. Or that they don’t know if their marketing team performs at all and how it should be evaluated. Or, last but not least, that they are not sure how much money to allocate to the marketing budget and how to measure its ROI…the holly grail of any performance management.
Although naturally I might feel a taste of disappointment when confronted with such confusion, I also realize that structuring and measuring marketing has become more complex and difficult than ever, in the context of exploding digital channels and the multitude of options that come along.
When things become complicated, the best thing to do is to come back to basics and refer to them first, then build a structure for a controlled complexity. So I have put together for an easy reading and understanding here the 6 main blocks that should be the base for a decent marketing KPIs dashboard, that should help any CEO in any moment to map the marketing area of their business:
1. The customer decision journey (CDJ) touchpoints. This shows how a potential customer might hear about, get in contact, strengthen the relationship with your brand/products, then consider buying and in the end buys, recommends further or gets loyal. This is a very useful tool that shows us where we lose business, meaning where on this conversion journey we might lose clients. It is extremely important to assess which are the biggest gaps between the different touchpoints and the reasons behind. A set of KPIs should be defined and tracked. Is your potential market aware of your products existence? Do your potential clients consider you as one of their top choice? Do they recommend your products to others? What is the situation now and what can you improve in the future? Sort that out and transform it into marketing objectives. The most used KPIs here are awareness, consideration, intention to buy, transactions and recommendation rate, but these can be completed with many others – e.g. in the ecommerce business the whole conversion funnel should be measured and optimized.
2. Products/services related performance. Most of the companies track and measure in one way or another the product related attributes such as quality or price perception. Not putting them in the right context might give a limited picture though. Is your product/service perceived as high priced or rather accessible? By your clients or non-clients? Is that accordingly to your wished positioning? Take these questions and translate them into measurable points to track your products/services aspects.
3. Communication mix and allocated budget. A good marketing strategy should define which are the communication channels used to promote/expose your business. When I say communication I don’t mean paid media only, but also “owned” channels like own website, PR, or even salesforce, which in many B2B businesses act both like sales and communication channel. Among all these, which channels should get higher priority in reaching potential customers and why? Does the budget allocation follow this prioritization? Any business should have a clear overview of the used channels and budget distribution, and also define corresponding performance indicators, like cost/visit, cost/purchase, etc.
4. Customer satisfaction. Knowing which are the satisfaction drivers for your clients is crucial. No matter it’s about shopping experience or the sense of belonging to a community you create, identify and measure them and their progress in time. But knowing your satisfaction drivers is not enough, as knowing the dissatisfaction drivers is even more important. They are usually different and influence the behaviour of your clients in a different way (read more about customers satisfaction and dissatisfaction here). Tracking and measuring them constantly will give you a clear picture of how your customers are doing, and give you tools to intervene, improve or know what to keep. Be cautious when you measure them, as they are lagging indicators (like most of the brand/marketing related KPIs), and they can show you at a certain moment the reality from the past (read more about that in Perception is not reality or “up to the star”). Satisfaction and dissatisfaction are very sensitive factors and they can boost a business if managed right or they could ruin it.
5. Brand attachment. Would your customer miss your brand if it disappeared? Do they trust your brand? Do they feel proud when buy your products or services? It is proven that emotional connection with one brand boosts its sales volumes. Building it is not that easy though as it needs the deconstruction of the relationship and consistently build it. Most of the emotional connection indicators are also cumulative as expressions of a multitude of past experiences and perceptions. One of the most important is trust, which is a very generic but strong feeling and it can be deconstructed in different elements for specific businesses.
6. Brand personality integration. Does your brand expresses itself in the same way on different channels? Is it easy to be recognized even in small pieces or is it kind of schizophrenic? A unitary brand identity needs to be defined and tracked. Distinctiveness and clarity sells. The elements that make one brand identity and how much the consumers recall them should be also tracked and evaluated.
There is a strong relation between these blocks. The first 4 are more functional and most of the executives have an idea about their performance. The last 2 are related more to the emotional part of the brand and usually only marketing specialists are aware of them, although it is known they contribute massively to improving the performance of the functional ones. So any CEO should have an idea about how his/her business is doing for each of them (not only how much marketing spends), as most of them depends on the whole team, not only on marketing functions. The picture of this post shows the regular imbalance of the two categories, and their prioritized “weight” of importance. Anyway, please note that these blocks are meant for guidance only and they don’t represent a rigid recipe, as each business is specific.