As marketers, we spend a great deal of time thinking about return on investment (ROI). Is X working? What do the metrics for X tell you? Has X achieved all it can? Can X be better? Did X justify its cost?
In Business Intelligence (BI), we leverage analytical tools and technologies to answer these types of questions. BI equips us with the insights and data to evaluate performance, customer experience and efficiency across multiple dimensions. However, BI is only as powerful and informative as it is empowered to be. At the outset of any initiative, one must take the time to properly identify goals, establish benchmarks and align them to relevant, performance indicators.
Why is this step necessary? Because it is the only effective way to evaluate success.
Think of a sprinter who is training to break the World Record for the 100-meter dash without the use of a stop-watch or any device to measure how fast he is running.
He might think he’s fast; others may observe him and say he is fast but without a goal, benchmark and performance indicator, in this case “sprint time”, there is no way to evaluate his performance or to determine his probability of achieving success.
The same is true when you want to evaluate X. Say that you want more customers and plan to employ a variety of marketing tactics. In this case, you would deconstruct as follows:
- Goal – to increase customer base
- Benchmark – historical growth rate, target growth rate
- Performance indicators – reach, retention and conversion
Then, true success is not purely determined by traffic volume, but also on impact. It is the combination of reach (traffic driven to site), conversion (number of new customer forms submitted) and retention (proportion of new customers retained).
The above chart shows full year results for the various marketing tactics employed. As seen, although the social media tactic drove the least amount of traffic, this traffic was far more qualified and invested, resulting in unmatched conversion numbers and retention rates. By applying a multi-dimensional approach to success evaluation, you can get a better understanding of the impact of various tactics and how they contribute to ROI.
As human beings, it is part of our fundamental existence to make decisions and evaluate our choices so we can make better decisions in the future. Similarly, all clients, regardless of industry, are continuously evaluating their decisions to invest in Project X. As marketers, it is incumbent on us to identify and put in place effective measures that guide and inform that decision-making process. Success depends not only on our critical understanding of clients’ goals and their deconstruction into innovative yet achievable tactics, but it is imperative that we identify the right questions and expand our repertoire for measuring same.
*Post written by Jamie Gilbert, Associate Director of Business Intelligence.