Tape Measures and Marketing Measures (Part 1)
By Richard Dannenberg
Way back in the last century, I had the pleasure of working for many years in the “lumbah bidness.” The great company that I worked with was very Southern and the drawling, mush-mouthed elocution went along with the business and actually seemed to help the marketing effort as we shipped our treated lumber products primarily into “Yankeeland.” Actually, the backwards accent belied a great deal of thought and intelligence that supported the company. We were engaged with our customers, participating frequently with them as they talked to contractors and consumers. One of our more popular programs was the “deck clinic.” We’d partner with a lumberyard customer, invite the town, and teach them how to build a deck.
The more audience interaction you could provoke, the better the clinic ran, so our representatives were trained to ask lots of questions. “What’s the most important tool in the toolbelt?” was one of the first questions asked each time. “Hammer,” someone would shout. “Skilsaw, level, drill,” and other answers soon followed. Eventually someone would say “tape measure,” and our folks were trained to answer in their best Southern drawl:
“Yep, ‘das it. Without a tape measure, you cain’t build nuthin’.”
Marketing: No Standard Units of Measure
Now, let’s apply the story to marketing and see what happens. When you’re building a deck, a 25′ Stanley tape measure is invaluable. It is possible to build without a tape measure, but the results will be less than spectacular. Likewise, marketing efforts that aren’t measured tend to be . . . ummmh imprecise. But there’s a big problem. If you purchase two 25′ Stanley tape measures and set them side by side, the inches scaled on the tape will be identical. There’s a standard unit of measure. That’s not the case with marketing. There are certainly tools that can be used for measurement, but there’s no great agreement on the standard unit of measure.
I was reminded of all this last week in an ongoing conversation that began with Kate Gansneder’s suggestion of a topic for our next 21/20 Marketing Hangout. She suggested Key Performance Indicators (KPIs). Kate had just composed an excellent article on CRMs and Marketingfor PrintMediaCentr, which was followed by a discussion on #printchat, the weekly Twitter chat about all things print. Kate’s article and the online discussion focused primarily on the measuring tape, the Customer Relationship Management (CRM) system. In her article, she provides a good list of potential metrics, but really doesn’t dig into the difficulties involved in obtaining them. The conversation on Twitter was similar. There was much talk about the various CRM platforms and how they were being used, but little was said about the specific measures.
What to measure is a big topic, and I was curious, so I asked a question about KPIs in a couple of social media forums last week. There were some good comments, but they did more to illustrate the problem than to prescribe a solution. The answers indicated a couple of schools of thought regarding the measures, but no universal agreement on which KPIs are important or how the data can be collected.
Marketers and Data Geeks
Let’s lump all of the Marketers into the first school. This is unfair, of course, but the tendency for marketing types is to look first into their own spheres of activity. They’re concerned with the response that is generated from social media and what’s happening on their websites. Much of the data they track comes from counting interactions. Some typical measures for this group:
• Social Interaction: How many retweets or likes?
• Referral traffic on the website
• E-mail opens and click-throughs
• Website form conversions
These measures are important and they can certainly prove effectiveness in building an audience and generating engagement. But should they really be called key performance indicators?
Let’s call the second school Data Geeks. These folks would like to quantify a larger picture. They want to know whether increases in web traffic are producing results for the business and their inclination is to try to link specific online actions to quantitative results. For instance:
• New customers
• Product sales
• Repeat business
In my thinking, these kinds of measures are ultimately more important to the success of a business. A measure of leads in process at various stages of the conversion pipeline relative to new customer production could be a valuable predictive indicator of business in the next quarter. It’s easier for me to define this as a KPI.
Conjectural Data and Correlative Data
How to gather the data? The tools are there, but CRMs are not as easy to use as my Stanley 25′ tape. For larger companies with money, marketing automation systems like Hubspot and Marketo can centralize data collection from a range of channels that include social media, e-mail, and website conversions. Companies with in-house IT capability can integrate these platforms with management information systems (MIS) to provide meaningful correlative data that can be connected directly to customer acquisitions, sales and profit.
Data collection and correlation can be problematic for smaller businesses, which may have to rely more on conjectural data. They can use some of the same data collected by the marketing folks, but take it a step further. For example, a Google Analytics goal can be set up to measure conversion on a specific website form over a period of time. These conversions can be compared with related product sales over the same period. It may not be possible to directly track the form conversion to the final sale, but the correspondence between increases in website information requests and final sales is a valid conjectural link.
Affordable CRM platforms like Insightly and Zoho are available to small businesses that may also allow them to track lead source data and link it directly to new customer acquisition or even (potentially) product sales, although the time required to generate and correlate the sales information may not be worth the effort. For the most part, this kind of tracking also produces conjectural conclusions, but they can be valuable indicators of marketing ROI.
Half Done, More to Come
There’s a lot more to this topic, but this is quite enough to cram into one blog post. In Part II, we’ll look more closely at specific KPIs that can be valuable measures for printing businesses. These metrics are critical for marketers in the brave new digital world and the printing industry seems to be a bit behind the curve. If your printing company is making effective use of CRM or marketing automation to track KPIs, I hope you’ll comment to share what you’re doing.