What to Measure? Start at the Top

  |  August 1, 2013   |  Comments

Just because you can measure every online thing these days, should you?

You can measure every online thing these days. But should you?

Big data says yes: collect it all and decide what questions you wish to ask later. This bottom-up approach is fine if you have the technology and the resources. It's great for discovery and correlation hunting. But what it you just want your business to improve? Then you should start at the top.

Metrics Priorities Begin With Philosophy

Philosophically, the most important thing an organization can do is make customers happy. You can do that by entertaining them, feeding them, or making their life better in some other way. You just have to make a product or service that is fun, interesting, or useful.


"What about profits?" I hear you cry.

If you make customers happy, price your products appropriately, and watch your expenses, then profits allow you to reinvest in order to satisfy goal number one, thereby making more customers happy.

"What about shareholder value?" you retort.

Philosophically, I leave that to Henry Ford who said, "It's a poor company that makes nothing but profits." Customer satisfaction is the primary goal, and if you do the rest well, profits are a happy outcome. So measure customer satisfaction first.

When it comes to marketing metrics, measuring expenses are the easiest: how much did you spend where? But we need a series of proxies for revenue. Return on marketing investment is not impossible, but it so quickly becomes so complicated that it's best to set it aside for later, when we can get to the bottom-up side of the equation. For now, let's just focus on marketing department goals.

A super simplistic view of marketing-generated value can be viewed from the customer perspective:

Raise awareness. If they don't know about you, they cannot buy from you. A random sample of your target audience will reveal a baseline level of awareness that you can strive to improve. Online, you can do that through surveys and social media monitoring.

Improve attitude. Just because they know you, doesn't mean they like you. Here, we measure opinion and affinity. When they like what you stand for and what you have done, they feel a kinship. This can be a competitive metric as well. They may like your brand and your competitor's brand, but we want to measure whether they identify more with yours.

Influence influencers. Understanding the social graph means knowing where to leverage those who influence others. Marketers are now in the position of lobbyists. It's our job to help people form opinions based on the opinions of others. Our job is to find the opinion-swayers and sway them.

Inspire interaction. If your target audience knows who you are, likes what you stand for, and respects the opinions of others who like you, the next meaningful measurement is whether we got them to take action. Be it like, favorite, tweet, click, visit, consume, download, participate, or any of dozens of possibilities, there are strong signals that you are moving an individual or a group from suspect to prospect to customer.

Generate sales. Perhaps the easiest thing to measure is how many and how often money changes hands. "Did we make a sale?" could also be "Did we receive a donation?" or "Did we gain a member?" or "Did we change a mind?" This is the primary goal after customer satisfaction and the penultimate relationship metric between organization and client/customer.recommended

Drive endorsements. The pinnacle of any business relationship is having created such high customer satisfaction that customers are compelled to tell others. They have become advocates on your behalf. Measuring the positive tweets, blog posts, and testimonials is measuring your best self. This is where you will know that you have done a good job and deserve a pat on the back.

This gets interesting where any of the above fails. If there are not enough sales, it's time to backtrack through the touchpoints to see where things can be improved. No interactions? Perhaps everybody knows you, everybody loves you, but nobody has the slightest inclination to purchase (think Rolls-Royce).

Now, you can start digging in and deciding which bottom-up numbers are worth your while. Now, that big data system can offer some fresh insights about where the problems might lie.

But start at the top.
Do it once a year.
You might be surprised.

Images via Shutterstock.

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Jim Sterne

Jim Sterne is an international consultant focused on measuring the value of the online marketing for creating and strengthening customer relationships. Sterne has written eight books on using the Internet for marketing, produces the eMetrics Marketing Optimization Summit and is co-founder and current chairman of the Digital Analytics Association.

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