Making marketing more data-driven seems to be the “it” topic these days. Only recently have marketers had tools available to quantify our efforts. Used correctly, data helps us tighten conversion rates, shorten sales cycles, defend our budgets and ultimately drive more revenue. On the other hand, collecting too much data can cause us to drown in a sea of spreadsheets. Whereas ten years ago we relied on alchemy and hunches, marketing has evolved into a quantifiable science. In fact, it’s often tempting for us to get lost in the data. Being data-driven doesn’t just mean you’re collecting metrics.
It means those metrics should roll up to business goals, support strategies with measurable outcomes, be actionable and be based around trusted sources and definitions.
In this post, we’ll provide four steps towards creating a data-driven marketing culture.
1. Set clear business goals and agree on KPIs that align to them
It seems obvious, but every single metric you track should tie directly to a tangible business goal. Marketing’s business goals should roll directly up to corporate goals. For instance, if the corporate goal is to sign forty new clients in the next two quarters, what does marketing have to do to support that? Start at the small end of the funnel and work your way backwards. How many opportunities will you need? How many leads will you need to get that many opportunities? How much web traffic do you need to bring in the leads?
While it’s tempting to just commit that marketing will increase leads xx% over last year, you should be certain that the percentage you are committing to will be in line with sales goals.
A less obvious example could be around hiring. If there’s a corporate goal to grow the engineering department, marketing may need to improve the reach of their LinkedIn pages and website’s jobs section. Your conversion metric here would not be leads generated but résumés submitted. What metrics should you be tracking to ensure you support HR in attracting talent?
2. Set strategies with measurable outcomes
Gone are the days when marketing’s influence was anyone’s guess. Campaign attribution tools, web analytics, and marketing automation platforms have given us the ability to tie outcomes to our efforts. Understanding marketing ROI is a reality and no longer has to be a manual process.
Just as your business goals should be quantifiable, your strategies to accomplish them should be too. For instance, rather than committing to building out a customer portal, commit to the measurable outcome of that. The goal could be: Marketing will support increased upsells and renewals of existing customers by creating a customer portal that will empower our users to realize better value from our platform. We commit to an adoption rate of xx% among existing customers, ultimately reducing churn xx%.
If you are spending time and resources on a project that isn’t netting results, you need to understand that quickly so that you can change strategy or pull out completely. By measuring outcomes, you ensure that your efforts have value.
3. Avoid Analysis Paralysis and track fewer but more actionable metrics
Now that we have so much data, it’s so tempting to track everything. If I go back and look at some of the spreadsheets I’ve used in past jobs for my “weekly dashboard,” I get a headache. They have ten or twenty tabs, each with dozens of columns, filled with clever formulas and, oh so many numbers! Sometimes, I think marketing is so desperate to prove that we do more than quibble about fonts and button colors, that we feel we need to report on more than can we can ever make actionable, just to show there’s science behind our jobs.
Every metric marketing tracks should not only align to a business goal, but have an actionable outcome associated with it. If you cannot use that number to help you make a decision to improve performance, then don’t track it. Now my dashboards are brief and easy to read at-a-glance. Every number is there for a reason. Simplicity is powerful.
I like to think of the numbers I track in two categories. The first are short-term numbers. These are things we look at every day. If suddenly, the lead flow on a popular campaign goes to zero, we know something is wrong. We can quickly assess the situation and get on top of it. We use these numbers for troubleshooting, adjusting spend, optimizing conversion rates and making all kinds of day-to-day decisions.
The second category involves benchmarking. These are historical and trending stats. They tell us how we’re doing on longer-term goals. For instance, if I want to know if we’re increasing awareness, I may look at branded search and direct web hits over the past three quarters. These numbers show overall health of the organization. While they still need to be actionable to be effective, the actions tied to them may require longer term planning.
4. Agree on one version of the truth
Everyone in the organization needs to agree on your data sources, the numbers that matter and what they all mean. It is well worth the time spent to agree on what data sources will be authoritative. Write down definitions for all your lead and opportunity stages (or other critical indicators). Get everyone’s buy-in on what they mean and why. Revisit these agreements regularly. They may change as your business changes.
Don’t forget that you’ll likely have to bring in cross-functional input on this. Minor calculation differences may arise because Marketing is polling the marketing automation solution, while Sales gathers data from the CRM. Those sorts of little mismatches can lead to big frustrations. Make sure that everybody is speaking the same language and reading the same Bible.
The rise of data-driven marketing is exciting. I rarely find myself getting into a difference of opinion about how a marketing program should be executed, anymore. We can go to the stats to see what works, and if we don’t know we can run tests. Marketing has evolved from an art to a science in a very quick period of time. While we’re suddenly flooded in numbers, with some forethought and planning, deciding on what numbers to use can lead to very powerful results.
When thinking about becoming more data-driven, be sure that your KPIs roll straight up to larger business goals. Commit to strategies with clear, measurable outcomes. Measure only what you can act on. Agree on the details around data sources and definitions. Once everyone is marching to the same beat, the rewards will be well worth the work.