There are a lot of metrics and measurements out there. In fact, thanks to “Big Data” and cloud computing there are more measurements and metrics than there ever have been previously.
CTR. Quality Score. Average Position. CPM. CPC. Click-to-conversion. ROI. ROAS. Attribution models are all the rage: Time Decay, Linear, Markov Chain… even Google is now trying to kill “Last Interaction” modeling.
But guess what: it’s all window dressing. OK, maybe not window dressing but certainly secondary. I say this because a high CTR never paid someone’s salary. It’s a measure of how enticing the ad was (or maybe where it was placed contributing to accidental clicks). Quality Score is a score based on a handful of things (both confirmed and unconfirmed by Google). ROAS is a diagnostic of marketing efficiency, but it shouldn’t be the most important goal. Having an ROI of 1000:1 isn’t worth much if you only have one sale.
Revenue. Ah yes, revenue. Money pays salaries and keeps the light on. The primary goal is revenue.
But of course, there’s a catch: that’s a sales function. Believe me it’s no fun being held accountable for a goal that is (nearly) completely out of your control. Marketing’s job is to deliver the most highly qualified possible opportunities, but it’s Sales’ job to turn them into revenue. And the most amazing marketing in the world is useless without a competent, prepared, well-trained, hungry, and happy sales team.
So marketing executives, please be mindful that the whole lot of what can be measured and their metrics are diagnostic only diagnostic in nature.
Share of Voice = how much you’re being seen vs. your competitors (this doesn’t matter if you’re not producing enough revenue)
Brand Awareness = What percentage of people recognize who you are and what you do (this doesn’t matter if people aren’t buying from you)
Net Promoter Score = How willing your customers are to actively promote your brand (which doesn’t matter if you’re losing money on your existing customers)
Cost Per Lead = how much you’re paying to generate a potential customer (which doesn’t matter if you aren’t converting potential customers into customers)
Click thru Rate (CTR) = What percentage of people who saw your ad clicked on it (which doesn’t matter if they aren’t buying from you because your user experience sucks, your product or price isn’t competitive, or you aren’t giving potential customers what they want/need)
Conversion Rate = What percentage of people landing on your website are converting into leads/opps/customers (this doesn’t matter if you’re paying too much per conversion and losing money on these customers)
Bounce Rate = percentage of visitors who leave your website after visiting only one page (this doesn’t matter if you’re able to convert enough visitors into profitable customers)
Churn Rate = what percentage of customers stop buying from you per month (this doesn’t matter if you’re losing money on these customers or destroying your brand in the process)
Cart Abandonment Rate = How many customers start the buying process but then quit before they are converted (this doesn’t matter if there aren’t enough customers)
Lifetime Value (LTV) = how much a customer is worth over the life of them being a customer (which doesn’t matter if you’re paying more to get the customers than what they’re worth)
Customer Touchpoints = how many things a customer needs to do before becoming a customer (this doesn’t matter if you don’t track it correctly or potential customers don’t buy from you)
These are all diagnostic measurements for a whole bunch of different things, all of which are important but are ultimately secondary to the main goal: REVENUE.
1. What’s driving revenue (do more of this)
2. What’s not driving revenue (stop it)
3. What’s stopping people from doing business with us (all this other stuff)
Einstein was right after all.