When you mention the word "success" to a business owner, there's no shortage of mental images that immediately spring to mind.That's both good and bad - it's good in the sense that there are literally dozens of ways that business owners, employees and customers can ascribe value to what businesses do day in, day out. Some people tally success whenever a business has high customer retention or robust employee satisfaction ratings while others measure success based on sheer profitability or whether your customer base is expanding.
Indeed, the fact that success is such a malleable term means that (unfortunately) two people might not be talking about the same thing or that, for instance, the marketing metrics that you're focused in on might be measuring activities rather than ROI-yielding outcomes. Here's what we mean by that:
Key Marketing Metrics Measure Outcomes
When you talk about marketing metrics and key performance indicators that produce real-world results, this should typically be conveyed to you as a percentage (or number) and in some way relate to lead generation, lead nurturance or conversions.
Customer acquisition cost is one such key marketing metric that most business owners are already familiar with. This is the combined cost that your sales and marketing processes spend (e.g., advertising cost plus salaries and marketing overhead) in a given timeframe to attract a new customer.
You'll notice that you're measuring a result or marketing outcome here rather than an activity. One example of measuring an activity instead of actual marketing result is metric like "reach" on social media. Your total number of followers on sites like Facebook and Twitter could indeed impact your inbound marketing…but indirectly.
Potential Problems Measuring Activities
The problem with measuring your success by an activity instead of an outcome is that the former might not have any connection to your business' profitability or tell you how you can improve your lead nurturing and content marketing.
To know that you have, say, one hundred thousand followers on social media doesn't necessarily tell you if all (some? most?) of those followers are qualified leads, marketing originated customers, what you can do to streamline your content marketing—or how much you have to.
Outcome Metrics are More Effective
On the other hand, a metric that tells you what percentage of your new customers in a given timeframe were lead generated by your marketing team (i.e., your marketing originated customer percentage) conveys a lot of information in one percentage and immediately indicates whether you’re spending your marketing dollar wisely.
Contrast that with tracking success by social media followers - could that activity somehow translate to success? Maybe having more followers nebulously leads to more sales, but without diving deep and using key marketing metrics, you won't really know how that happens, why certain prospects became qualified leads or the effectiveness of your inbound marketing at each stage of the sales funnel.
You want clear-cut and ongoing answers to your marketing's effectiveness, preferably displayed all in one place like a CRM's dashboard, so that you know which marketing processes to strengthen and which to downplay, scrap or overhaul.
When Social Media Helps
Now, up to this point, it may seem like we've been picking on social media a bit. To play devil's advocate, your followers on social media and your total number of subscribers to your email list (collectively known as your "reach") could be a valuable metric.
How? If customers are acting as brand advocates, using social media to discover more about your company and its products, or socially engaging with your business, then social media can be an ROI-generating behemoth.
One valuable metric that business owners can take advantage of to more efficiently identify brand advocates, and market accordingly, is Facebook's People are Talking About This metric. This tells business owners and marketing directors active on social media the frequency with which your followers, for instance, share an offer or pass around a blog post that you put out.
Purpose of Key Marketing Metrics
This all gets at another important point - key marketing metrics should ideally tell you which channel is driving your leads and, in turn, what content is most efficiently turning leads into conversions for your company.
You obviously still need to track your website's organic traffic, but you should also be looking at which aspects of your content marketing are producing the most subscribers, leads and conversions.
Once you know what content sources are the best at, say, nurturing leads, then you can further increase marketing influenced customer percentage, which tells you what percentage of leads were converted based on your marketing efforts.
Your marketing success actually happens at this kind of granular level: Diving deep and taking a microscope to your key marketing metrics pays off in higher customer satisfaction, more conversions and greater profitability.
You might also be interested in: