Today’s Metrics Fail to Connect Marketing to Growth
Marketing, you’re going to need different metrics if you want to prove your contribution to Growth. In our recent poll, “growth” received 100% of the responses for Marketing’s top priority this year. The second question asked, “What metrics (select all that apply) is your Marketing organization currently using to report on its contribution to the business?” None of the options included typical downstream metrics. The options were metrics such as customer lifetime value, category ownership, win/loss rate, product adoption rate, and rate of growth compared to competitors in your category.
The most selected option was customer lifetime value, but we also received plenty of write-ins. Almost all of the write-ins fell into categories around executional efforts and prospect and customer engagement activity and output metrics respectively.
This leads us to the responses to the third and final question in the poll, “Which one of these are among your top challenges for achieving success?” “Selecting more meaningful and relevant metrics for Marketing” was the answer from 40% of the respondents. This echoes the findings in our 16th annual Marketing Performance Management (MPM) benchmark study, “Selecting meaningful and relevant metrics is a major challenge for 77% of Marketing organizations.” Based on the data, it’s understandable that trying to select metrics for Marketing tied specifically to growth, especially organic growth, remains a big hurdle.
Advice for Selecting Metrics Tied to Growth
To select metrics tied to growth, flip your approach. Tie your Marketing metrics to what your company must do to achieve its growth targets. This means starting with understanding what constitutes success for your organization. Not in terms of revenue or profit, but in terms of where and how growth will be achieved.
- Will growth come from acquiring some number of new customers in an adjacent market with an existing product?
- Or will it come from increasing the adoption of new products in a particular region?
- Or from capturing customers from a particular set of competitors?
Of course, all of these will in some way impact revenue and be associated with how your opportunities move through the “pipeline” or “funnel.” The key is that these questions are very specific. It’s not just any revenue. Therefore, it’s not just any number of opportunities leading to some number of deals. That kind of thinking can lead to making a revenue target but missing a growth target.
Your growth strategy develops out of your answers to which markets, which customers, which products. Knowing how growth will be attained guides your Marketing metric selection. Selecting your metrics can’t be about what measures and metrics you can collect and track today. It must be about what metrics will best demonstrate that Marketing is contributing to and impacting the growth initiative. What might that mean? Two things.
First, very likely this has implications to your current Marketing plan and metrics. It’s highly possible that the Marketing plan you’re working from today is more focused on today’s pipeline and sales. You may need to revisit your plan to make sure your objectives and programs are more tightly aligned to the growth strategy.
Second, Marketing plans aligned more to Sales and less to the growth strategy often translate into primarily funnel-related metrics. You will still need these types of measures and metrics. However, more importantly, you will need a higher order of metrics tied to the growth strategy. Then you will want to be able to look at your funnel data through the lens of the growth strategy.
Not sure your plan is as tightly coupled to the growth strategy as it needs to be? Consider a plan review. There’s no time like NOW to pivot your plan to support the growth directive.
This article originally appeared on LinkedIn.
Latest posts by Laura Patterson (see all)
- Why Does Good Strategy Matter to the Bottom Line? - October 22, 2019
- When You Need Research to Be in the Know – and How to Do It - March 18, 2019
- The Evolving Role of Marketing Operations - November 19, 2018