Standardized Marketing Metrics

Last week, Marketing Profs published an insightful article by Banks and Nahama calling for the standardization of marketing metrics. Banks and Nahama wrote the following:

We are chagrined to see marketers still putting forth hundreds, even thousands, of disparate measures for their specialized fields, with most of them stopping short of linking to financial return.

It saps years of progress from the marketing discipline to hear marketing specialists, many at the top of their field, still make passionate arguments that it’s all about viewers or listeners or impressions or eyeballs or click-through or brand or awareness or pass-along or engagement, etc.

That trend seems only to be accelerating in the age of digital and social marketing.

These thousands of measurements may have use for daily activity, but when they attract such, well, un-standardized attention, they hurt marketing and they distract CMOs from their main tasks.

It’s not all about eye-balls or click-through or brand awareness. It is all about financial profit and growth.

When marketers accept the primacy of profit, they will gain a reputation for delivering high rates of financial return by bringing in valuable new clients and retaining current ones.

If marketers do not begin operating from this perspective and generate standard metrics to prove it, they will continue to give up stature in relation to their peers.

At Serfwerks, we echo their position in that marketing must be able to quantitatively justify its existence if it is to claim fully justify itself as a contributing factor in creating value for any organization, cause, or idea. We advise all organizations to identify their key performance indicators and statistically gauge marketing’s affect on those KPIs. While  Banks & Nahama argue that marketing must be tied to an organization’s profitability, which in any profit-centered organization is essential, we also recognize that many organizations have other goals and ends and that your KPIs, profit or otherwise, should match up to those KPIs.

The difficult component of standardizing marketing metrics is that many marketers simply do not know how to correlate marketing efforts to bottom-line results. That is due in part to the fact that many of their efforts are focused on particular segments of an organization’s sales cycle. As such, it can be difficult to correlate one segment of a larger process to bottom-line results.

Another problem is that there isn’t a standard set of marketing practices on which to base standardized metrics. Although nearly every organization may have a web site or a brochure, the usage of those tools is very disparate. Every organization we’ve ever worked with has slightly unique processes, and consequently unique usage of marketing collateral. Developing a marketing strategy isn’t quite and cut and dry as choosing accrual versus cash-based accounting.

Finally, another challenge lies in the fact that data used in metrics such as market share, share of requirements (share of a customer’s total spending in the category) and others are either not accessible or available for many industries or organizations. Many small to medium-sized organizations simply can’t afford to do what it would take for them to get said data. Furthermore, in unregulated industries any competitive data are simply not made public.

As such, Serfwerks does agree that marketing should be tied to the organization’s key performance indicators, including profitability for a profit-driven organization. Beyond that, the organization should break down its KPIs according to its sales cycle and measure marketing’s performance at every stage in that cycle. That notion is applicable to every organization, profit or cause driven. Knowing and tracking the numbers of those KPIs throughout the sales cycle empowers marketers to establish metrics appropriate to their organization while being able to gauge their performance from awareness of their product, service, idea or cause all the way through the cycle, which in turn permits the correlation of marketing efforts to bottom-line results.

Check out the follow up to this post, More on Standardized Marketing Metrics