7 Steps to Leveraging Data to Measure Success – Part One
One of the most critical elements of cultivating a marketing operations department that is strategically aligned for success is an ongoing commitment to track the performance of campaigns, people, processes and technology. Those companies that consistently outperform their competitors are the ones who set goals, monitor performance, measure success and course-correct according to what their data reveals. This, too, is a process, and one that must be executed step-by-step. In Part One of this two-part series, we will cover how to define your problems and goals and choose ideal measurements.
1. Define Problems and Goals
Before you can improve marketing campaigns and achieve goals, like increasing sales, you must first identify and define the problems standing in the way of their achievement. A great place to begin searching for insights on the problems you face is your marketing/data dashboard. However, before you run a query, keep in mind that finding great insights begins with knowing exactly what it is you need to know. When you carefully consider all the variables contributing to the problem you want to solve or goal you want to reach, it’s easier to find the answers you need. For example, if your goal is to replicate the success of a marketing campaign, begin by asking questions, such as:
- What Key Performance Indicators (KPIs) are most relevant to the problem/goal?
- How can each KPI be changed, improved or manipulated?
- What outcome will mark the endeavor a success?
2. Choose Measurements
Once you have identified the information you want to know and the KPIs that impact it most, it’s time to choose how you will measure your data. To help you select appropriate measurements, we’ve gathered marketing’s most-used KPIs and created a quick-reference table for you.
Marketing Ops KPI Quick Reference Table
| Insights Sought | KPI | Definition and Tips |
|---|---|---|
| Brand Awareness | Net New Users | Visits from a browser with a cookie containing a unique user ID. Tip: Use a cross-device User-ID on your website to reduce the number of return users counted as new.Organize by source to see which channels produce more traffic. |
| Customer Journey | Marketing Qualified Leads (MQLs) | Prospects who have requested information, i.e. eBook; demo, etc. Tip: Score leads based on fit and interest to determine the level of nurturing needed to move them down the pipeline. |
| Sales Funnel Activity | Sales Qualified Leads (SQL) | Prospects vetted by marketing and sales with a high intent to purchase. Tip: These leads are the most time-sensitive. Research has shown a direct correlation between speedy follow-ups by sales and an increase in number of deals closed. |
| Lead Quality | Lead to Opportunity (AKA MQL to SQL) | The percentage of MQLs that get converted to SQLs. Tip: This metric is also useful for gauging the efficiency of sales development reps. |
| Sales Forecasting | Sales Cycle Length | Time from first contact with prospect to a closed deal, averaged across all closed deals. Tip: Growth-driven companies focus on shortening the cycle in order to accelerate revenue growth. |
| Sales Cycle | Pipeline Velocity V = # of Opportunities x Percent of wins x Deal Amount/Days in Sales Cycle |
Speed at which highly qualified opportunities move through the sales pipeline and close on a deal. Tip: Monitor velocity throughout the stages of the sales cycle to identify bottlenecks and areas for improvement. |
| Channel Value | Cost Per Lead (CPL) CPL = Spend/# of Leads |
Dollar amount spent per channel to acquire leads. Tip: This metric should be used in conjunction with lead quality to determine the ROI of various marketing channels. |
| Profit Margins | Customer Acquisition Cost CAC = Sales and marketing expenses/# of customers acquired |
The cost of extracting money from a customer. Tip: Long-term investments that require significant time before producing results may skew the accuracy of this calculation. |
| Customer Acquisition Costs | Lifetime Value of Customers (LTV) | Amount of money that can be extracted from a customer over a period of time. Tip: LTVs are important for accurately assessing benchmarks for good or unacceptable customer acquisition costs. |
| Marketing Value | Return on Investment (ROI) | Determines the true profit marketing campaigns generate for an organization. Tip: There are multiple formulas for measuring ROI including: 1. Gross Profit – Marketing Investment/ Marketing Investment 2. CLV – Marketing Investment/ Marketing Investment 3. Profit – Marketing Investment – Overhead Allocation – Incremental Expenses/ Marketing Investment |
Stay Tuned
Be sure to check out Part Two of 7 Steps to Leveraging Data to Measure Success, where we will cover the final four steps you can take to share the measurable difference your marketing efforts are making.