KPIs…are you hitting the right mark?
Within the marketing industry, KPIs are the lifeblood of campaign planning. With increasingly tight budgets and ambitious business objectives, marketing teams need ways of tracking performance in order to prove it’s positive ROI to senior management. We are all looking for overnight results, especially when it comes to expending time and money.
However, campaign impressions and website clicks won’t solve business problems or drive your organization forward. It’s time for the industry to take a step back and look at the bigger picture – what are your overall business goals? What gaps do you need to fill to get there, be it knowledge gaps about your target customer, or lack of understanding of which type of campaign resonates more.
Test, learn, iterate & learn again – hitting campaign KPIs means relatively little for overall business outcomes, they should be used to inform next decisions and allow you to move towards success in the future.
What is marketing effectiveness when effectiveness is subjective?
Much of the debate around KPIs comes down to the dichotomy between efficiency and effectiveness. Efficiency prioritizes speed and lower costs with a focus on short-term financial metrics. Conversely, effectiveness concentrates on longer-term results such as customer lifetime value (CLTV) and brand uplift. We talk of these terms as if they are universal measures yet they will mean different things for different businesses, depending on specific goals. The metrics to measurement, therefore, will inevitably be different too, for example cost down doesn’t necessarily equal effectiveness up.
Many marketers look at ROI as a critical KPI. The problem is that if focused on in isolation, ROI can create poor incentives by rewarding strategies that increase short term revenues, often at the cost of more important strategies. Again, it’s not the overnight fix marketers should be focused on – what is needed is a measured trajectory to success.
Instead of focusing on rudimentary metrics like conversions or ROI, there are other measures of strategic impact, which could lead to longer-term success, such as quality rate of leads, for instance, which can help businesses improve CLTV and drive future performance. Given the context of ever-increasing acquisition costs, focusing on such a KPI that returns compounding growth could be a crucial business decision.
At Fospha, we frequently see businesses continuing to invest in high-performing channels without realising that they are already saturated and can no longer tell them anything new about their campaign. By basing campaign success on ROI, businesses are only measuring short-term success, ignoring future business goals and ultimately wasting resources. You would be hard pushed to find an organization happy to invest heavily in channels that are not proven to report a high success rate against a net return on investment – yet these channels could be the most effective yet.
It’s all in the data
There are now ways to achieve a clearer view of the truth by using a data-driven approach to measurement and attribution. By identifying underinvested channels with a high probability of success, teams can save time and budget and drive optimum performance.
The best way to gain the true picture of a customer’s buying preferences is by moving away from fragmented data silos to a unified system such as a customer data platform (CDP). With data-driven insights, marketers can push the right content at the right time, increase customer engagement and building brand recognition.
Getting a Handle on Attribution
It is impossible to calculate the ROI of a channel without being able to differentiate its impact from other touchpoints. Despite the industry widely acknowledging the shortcomings of single-click attribution for measuring conversion points in a customer journey, a recent survey showed that 67.7% of UK and US marketers are still using either last-click or first-click models.
Unsurprisingly, this leads to marketing teams pouring budget into the final touchpoints in customer journeys, failing to acknowledge the impact and effectiveness of other channels. Fospha’s Multi-Touch Attribution (MTA) solution uses customer data to quantitatively measure the impact of every touchpoint and therefore provide insights as to which channels should be focused on to increase efficiency and effectiveness.
Sowing the seeds of success
Companies need to look at how they are defining and measuring for campaign effectiveness and efficiency. Aligning KPIs to business outcomes for long-term success is key. However, to do this marketers need to integrate their customer data and apply the tools that help them understand the customer journey, the best performing channels and the right metrics to do it.
If you would like to learn more about how Fospha’s data-driven solutions could help your business driving future performance, please contact us at firstname.lastname@example.org