How to move past vanity metrics and measure what matters
Marketing teams everywhere feel the pressure to show that they are contributing to the bottom line of their business; that their work can be measured in terms of revenue and profitability rather than just costs. The only way to demonstrate this contribution is to find a way to measure the tangible business impacts that marketing delivers.
This requires a change in thinking about marketing metrics: moving beyond the readily accessible numbers that we’ve come to rely on like impressions, click-through-rate (CTR) and cost per lead (CPL). A deeper metrics mindset works harder to generate numbers that have a more meaningful relationship to whether your business is succeeding. These metrics are the ones capable of attributing actual revenue to your marketing rather than indicating engagement that might lead to new business. They need to be at the top of your priority list of KPIs. They take more effort but they’re worth it.
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Imagine you’re the manager of a Premier League football team reporting to your impatient Chairman about how his expensively acquired players are performing on the pitch. If you go into your meeting and proudly describe how much possession your team has had, how many touches in the opponents’ half of the pitch, how many passes you’ve completed – but nothing else – then you won’t be long for your role. These metrics might be interesting to a manager and useful in terms of working out how to organise your team. However, they have no meaning at all unless they are put in the context of how many goals you and the opposition scored. That’s the result that matters – and those other metrics start to look very different depending on what that result is.
Something similar is true of the relationship between the so-called vanity metrics and the real business impact of marketing. Unless you invest in understanding the bottom-line implications of what you do, you can’t prove the value of marketing, secure more budgets, earn credibility in the C-suite and work with other areas of the business more effectively. What’s more, you can’t really judge the value of those other metrics you’re measuring. The meanings of CTR and CPL, for example, are very different depending on whether those leads and clicks are converting into revenue or not.
As a B2B marketer, comparing the number of leads that you generate on different platforms isn’t necessarily a good guide for your media investment. You need to know the rate at which those leads convert into closed deals, and the amount of revenue that deals with that platform’s audience tend to result in. If you look at cost per lead (CPL) without also looking at value per lead, then you’re missing the most important part of the ROI formula. When you invest in generating leads on LinkedIn, for example, you’re investing in leads from among an audience that has more high net worth individuals than any other social platform, and 41% of whom are business decision-makers. That’s why LinkedIn advertising insiders report that businesses are consistently impressed by the end value of the leads they generate on LinkedIn.
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