Metrics: Analysis or Paralysis

Feeling overwhelmed by the task of measuring your marketing communications? Although implementing programs that demonstrate marketing’s value can be complex, a simple approach will often suffice. With that in mind, here are four simple guidelines for developing an implementing a measurement program:

1. Establish specific measurable objectives

Exactly what are your marketing programs supposed to achieve? If you define specific, measurable objectives on the front end, you can determine whether a particular program has been successful or not. Keep in mind that the more specific the objective, the easier it is to measure and the more meaningful the measurement. As an example, let’s look at two ways of expressing advertising objectives for a new product:

1. Introduce the new SD980 digital camera.
2. Generate 135 requests for on-site demonstration of the new SD980 digital camera from targeted decision makers during the first three months of the introduction campaign.

The first objective is difficult to measure or relate to sales or revenues. As a result, you can’t tell management whether it worked or not.

However, the second objective is highly measurable. It directs us to develop several pieces of information: total number of inquiries, a definition of qualified decision makers, the total number of demos, and the total number of sales that come from those demos. And it sets a specific time frame for achieving the objective — all of which adds up to a very effective measurement of advertising effectiveness.

2. Specify the key elements

With objectives established and prioritized, your next step is to decide which elements of your advertising program you want to measure: budget, creative strategy, media, the sales impact of the entire campaign, or something else.

If you are in the initial stages of a multi-phase advertising campaign, you may want to measure such elements as media selection and creative strategy in order to improve the effectiveness of succeeding phases. Or you might want to know which direct marketing offer worked best. Or which landing-page pulled more online orders.

Or, you may want to determine the effectiveness of your entire campaign. What impact did the campaign have on total sales? What was the ROI? Would you do better by spending more on marketing or increasing the size of the sales force?
In addition to determining the elements to measure, you also need to identify the appropriate measurement criteria. This might be level of sales, number of inquiries, changes in awareness, changes in buyer attitudes, hits on the web site, or orders received from the direct mail piece.

3. Select the measurement tools.

Once you know what to measure, you can select the appropriate measurement tools and techniques. For inquiries, you might use a good lead management system to provide raw totals, qualified leads, follow-up actions taken, and sales tracking. If you’re evaluating the effectiveness of different landing pages, you might employ a web analytics program. Sales levels could come from your own order department, field sales reporting, CRM programs, web analysis, and lead management systems.

When selecting measurement tools, you need to consider factors such as the time that they take to provide the information you require, the cost of purchasing, the quality of the information that you obtain, and whether the information they provide strongly relates to our marketing objectives.

4. Implement, report, use.

When everything’s in place, you can start the measurement processes and programs. As you collect information, you need to prepare and submit reports to management that specify succinctly what is being measured and why in an executive summary. Then back it up with detailed data and procedures for those people who want to study it further.

The information you gather not only can be used to demonstrate the impact of advertising on sales and profitability, but it can be used to modify future advertising programs. Collecting data on a regular and continuing basis can form the framework for future budgeting, copy strategy, media buys, and marketing communications strategies.

Conclusion

Too much detail and complexity often leads to analysis paralysis, where you spend too much time analyzing and massaging the data and too little time using it to evaluate and improve programs. If you follow the four guidelines presented here, you can simplify your measurement process, concentrating on more meaningful measurements and providing answers to management’s perpetual questions about the effectiveness of marketing communications.