Marketing Metrics and ROI

j0434829In the course of a new business meeting earlier in the week, I became engaged in a conversation about marketing communications metrics.  I greatly enjoy such conversations because we have a wonderful model of integrated metrics tracking that is downright exciting for those interested in such things and never fails to fuel a conversation on the topic.    

On the heels of that conversation, an article came my way talking about metrics, ROI, and various techniques used in healthcare marketing.  Given the earlier discussion, it piqued my interest so I plunged in.  The article proved to be well-written, very broad, chock full of input from various “experts” and devoid of any “so what” or actionable takeaway. 

It struck me as something to share internally as an example of an intelligent-sounding article on metrics that hits on a lot of buzz, but says nothing concrete.  About the only thing useful – from a 50,000 foot level – was buried somewhere near the middle in a quote by one of the experts” who basically said metrics should be tailored to need.   Unfortunately, much of what we see regarding marketing metrics and marketing in general seems much the same – a lot of sizzle and splash, newspeak and nodding heads, but little substance.  In my opinion, the prevalence of such things cloud understanding of the issue and curtail frank, inquiring discussion at best.  

People who “should” know all about these things fear appearing as if they don’t and so fundamental questions remain un-asked, assumptions aren’t challenged, prevailing attitudes are accepted, the boat isn’t rocked and on we go.  In that environment, basic misunderstanding grows, mistakes are made and the process gets repeated – even institutionalized. 

The only good metric is a useful one…

Our approach toward metrics in general is that they are most useful when they’re: tailored to client objectives, provide insights into effective direction and are actionable.


We point out these requirements whenever the discussion turns to metrics or ROI with the added caveat that metrics need to be simple to understand and track.  Which leads to something else: in both the article and in conversations, we’ve also noticed there is often confusion between “metrics” and “data.”  In my mind, data is useful and if budgets allow – always a good thing.  Metrics are forms of measure. 


In addition to basic misunderstanding, confusion comes when tracking online activity for example.  Is it a metric – or is it data?  One could say both.  Certainly it’s a handy activity to track, but if considered a metric, then what’s its worth if not tied to a means of manipulating the outcome toward the achievement of something that furthers a company’s objectives?  So then, data is information.  Metrics are tools tied to outcome that allow us to take effective action when needed.  


To be useful, the tracking of online behavior should link back to effect the desired behavior or outcome.  Otherwise, such activity too often becomes “pursuit of the month.” 

Strategies are hatched, agencies are aligned, programs are designed and launched, metrics are captured, a flag is stuck in the ground and victory is proclaimed.  Unfortunately the results produced are often dubious at best and the lingering effects of such actions tend to be harmful to an organization.  The real tragedy is that most organizations miss the fallacy of a process they continue repeating.  


The auto industry we know so well, is rife with examples.  Consider GM’s ongoing experiment with all things “brand.” 


Perhaps 15 or so years ago, “brand managers” were brought in from other industries in order to boost car sales through implementation of “brand strategies” and techniques in place within the consumer products industry – notably at P&G. 


Thinking changed, direction changed; young, new “gurus” were given free rein to implement new marketing activities affecting virtually all of GM’s line.  Did it work?  Well, that’s a multi-faceted question, but many would say “It didn’t help.”   Given the profound (read “faulty”) mindset change such thinking drove, it was downright harmful.


Cars became “products,” nameplates became “brands,” the car companies themselves became “brands,” “brandspeak” became lotus leaves and many bought into the  illusion.  Customers who simply wanted “cars” become confused with all the hype and the dizzying array of offerings. 


Toyota, Honda and others kept to the basics of building what consumers wanted: cars that were well-made, provided reliable transportation, were fun and looked good.   


Not to say they didn’t pay attention to research, new marketing techniques and metrics – of course they did.  However, I would argue that they kept a pragmatic balance, an end-goal and their customers in mind, while their competitors rushed from brandspeak “fad-to-fad.”  It’s clear which companies had more success and built the more loyal customer bases.


I’ll never forget when Chevrolet launched the Lumina in the late 80s.  At significant cost, Chevrolet purchased the rights to use Disney characters in ads promoting the new vehicle.  At the time, I read their thinking was to link the wholesomeness of Disney characters to the new car in an effort to connect it to families.  Somehow, families in the market for a car would be drawn to the new vehicle because of its association with Disney characters and their high regard for the family values of Disney.


At the time, I worked at a firm involved in the launch of the Lumina.  I had driven the car and thought it was poor in comparison to other offerings then on the market.  I remember thinking the money spent on a Disney link could have been well spent on building a better product and touting things potential buyers wanted.  At any rate, the Disney ads were soon dropped, the Lumina was never considered a “hot” seller and never sold in the volumes desired.  Today it’s gone.


The point is that all too often we get carried away with marketing newspeak, unproven-but-cool-sounding approaches and the application of new technologies and  tactics we don’t take the time to think about or understand.  Too often, we take a short-term view instead of the more strategic action that furthers accomplishment of a long-term and often bigger objective.


Meanwhile, wiser marketers “think” before they “do,” apply common sense instead of delegating to the “experts” and implement activities with the correct end goal in mind.  After the hubris has faded, they tend to be the winners. 


Constructive accountability is an added factor that comes into play… but that’s a stand-alone issue for another discussion.


One thought on “Marketing Metrics and ROI

  1. I agree completely with regard to the points you made: marketing metrics issues and “flavor of the month marketing strategies.” Unfortunately, too often the corporate executives making the ultimate marketing decisions are often not marketing professionals.

    Please talk about specific metrics you use that have proven valuable in terms of ROI, sales, new business wins, etc. in your next post, i.e. the marketing deliverables that are now in demand.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s