Marketing strategy objectives that work: how to avoid vanity metrics
We know marketing strategy objectives are important. But it is easy to miss the insights behind the flashy metrics. Read our post to help focus on what matters.
Reading Time: 5 mins
It is easy to get the dashboard from hell by following current analytics advice on the web. But there is a real risk that you find yourself tracking vanity metrics rather than the ones that matter.
Objectives exist for you to set a target and know whether you are going to reach it. They are the basis for driving action and aligning all your marketing activities.
Metrics provide the measure of your objectives. They will either quantify your outcome (the what or how) or qualify it (the why).
In this post, we will provide a simple framework for aligning objectives using only metrics that matter.
Where to start with your objectives?
Your company exists to achieve its business goals, so that is where you start. Marketing objectives should align to business goals.
Often the first point of disconnect is the marketing team focusing on campaign rather than business success. The classic, “we’re getting heaps of traffic, what’s the problem?”
Let’s start with a revenue-focused business goal, “Increase revenue by 20%…”
Then what are the options for revenue growth:
- New customers?
- Retain customers (so don’t lose ground)?
- Better value customers (up-sell or increase deal value)?
Okay, given those options what objectives will contribute to the revenue outcome:
- “X increase in new customers per month, from X to X”
- “X percent increase in customer retention, from X to X”
- “X percent increase in customer value, from X to X”
Tip: When setting objectives, it can be easier to visualise the mechanics of an outcome. Then assign metrics to those activities to ensure alignment with the objective. E.g.
- What activities does it take to retain a customer?
- What metrics do I need to track to know those activities are performing?
How do we make sure we can achieve those objectives?
After establishing alignment between business and marketing, the process continues bottom up. Using the marketing funnel to maintain the chain of objectives, in reverse it is:
- Drive Action
- Influence Consideration
- Build Awareness
Let’s take “X increase in new customers per month, from X to X” as the action. Then to influence consideration, then we want to, “Y increase in qualified leads, from Y to Y.” To track the performance between the two, the leads to customer ratio can then be added as a metric.
Moving up the funnel, to build awareness we want to have, “Z increase traffic, from Z to Z.” To track the performance between traffic and leads, we define the traffics to lead ratio.
Each step has an objective and a ratio to link it between the previous and the next. This is the core pathway for your objectives that align to your business goals.
Tip: Check out Noah Kagan’s take on Quant based marketing for pre-launch start-ups.
How do we pick the targets?
Just starting out or not sure of what outcome you are likely to get. No probs, industry standards are a good benchmark to use at the start for ratios and conversion rates. Insight Partners have done a great job with a periodic table of B2B Digital Marketing Metrics:
Tip: It helps to validate your objectives at every step. We use the guiding factor of “What do we need to do to double our business growth?” Have a think about what your factor is.
Why use this method?
A common objection to this method is, “picking the outcome and expecting to happen.” It is suggested that this is just not realistic for start up companies.
Our response: the purpose of objectives are to provide drive and align activities. Use SMART to define your goals and objectives. It is better to communicate inspiration and alignment than to say “see how it goes.”
Another common objection is that it is too simple. Why not leverage the available data provided by all these analytics applications?
Our response: the framework of your strategy needs to be simple. It’s purpose is to give you a clear guide of what you need to do and an easy method to manage it. Start with the simple then add layers of complexity as your framework matures.
It is easy to get caught up in all the tactics and techniques of digital marketing. Clear objectives and metrics will keep you on track and check the performance of each new tactic.
Don’t forget the most important financial metric for validation: Return on Investment (ROI). It will inform your financial performance and evaluate each tactic.