You may have heard the phrase, ‘you manage what you measure’. Meaning by measuring the progress and results of something, you’re in control of it and able to steer it in the right direction.
Measurement is critical to all areas of business, from costs, to performance, employee satisfaction, sales and of course — Marketing!
By measuring Marketing, businesses can ensure they’re getting their monies worth as well as determining which marketing performs best. On average a business has 10 different ongoing marketing activities. It’s easy to lose track of those that have been around the longest, and focus more on newer and fresher ideas.
The fact is Marketing — or at least effective, fast performing Marketing costs money. It’s definitely up there alongside salaries and buildings as a high cost.
That being said, I hate referring to it as a cost. The cost of running a building with offices etc, tends to be fairly fixed and out of a businesses control. Salaries, again fairly fixed although a business can control it more — ensuring they get the most out of their spend (team).
The same absolutely needs to apply to Marketing — by understanding that the cost is more of an investment. A business spends X dollars today, to get a return later. By measuring Marketing and thus managing it, a business can maximise their return on investment as any investor would do with any other investor.
But how deep does the measure of Marketing need to go? In my view, as deep as possible. Every single activity or marketing source should have their own tracking system.
Key stats like the following need to be measured for every single activity;
- Leads generated
- Customers created
- Value of customers created
- Value of pipeline — leads generated which may lead to customers later down the line
By doing this, a business can easily see which activities are doing better — thus allowing them to allocate more funds to those that generate the best ROI.
However a decision like this should not be taken likely. If one activity outperforms all others, the initial instinct is to go all in with that activity. But there’s a few problems with this.
Firstly, what if that activity stops working due to something out of the businesses control. For example, if they go all in with Facebook Ads, and somehow Facebook shuts down — the business loses it’s source of leads and sales. Think of activities as pillars that hold a building up — you wouldn’t have one pillar holding a building up — you’d have several. In the event that one fails. It’s the same with marketing activities.
In addition, not all activities are scalable. By that I mean an activity might perform well with the current spend, but increasing this may not generate the same ROI. It may well start to drop. That’s because there’s always limits to how much an activity can achieve — again using Facebook Ads as an example, whilst there are literal billions of users on there, eventually they’ll run out.
That all being said then, by measuring individual marketing activities a business can also manage the total budget — not putting everything into a single one, but perhaps allocating 90% of the budget into 3–4 different activities or pillars.
Another reason that it’s important to measure not only all activities but often — weekly, monthly etc — is because things change. Peoples preferences and reactions to advertising changes frequently. This is similar to the scenario of relying on one activity (pillar), but instead of a pillar collapsing over night it slowly degrades.
By neglecting to measure marketing over a few months, it makes it impossible to see changes in the success of activities, meaning businesses can’t react fast enough to counter it — by finding new methods that people prefer more now for example.
I hope this helps reflect the need to measure marketing in such detail. Sure, this process takes time when done often, and for those who hate spreadsheets and data — it can be a task rather avoided. But it’s so worth doing it, allowing a business to take back control and make informative decisions in a timely manner — and not being dictated by customer preferences, the market or competitors.