Digital marketing has become one of the main drivers to make potential customers aware of your brand and offering. It is and always has been a collection of marketing channels that’s made measurement of KPIs and attribution of success to separate activities relatively easy as it brings along its own set of KPIs. Those could then be framed in the context of your overall strategy. It is therefore essential to define your marketing KPIs in light of your overall business goals, because Marketing is not a standalone area of work but it is an integral part to a business overall.
OKRs as a first step: a tool to integrate marketing
OKRs have become a widespread management tool to bring goals and their measurement into companies. In essence OKRs describe the objectives a company wants to fulfil in a quarter or a year and break them down to several departments and the individual members working in those departments. This could mean that there is an overall Revenue growth for a company split out of how much that revenue needs to be driven by marketing by looking at traffic volumes, conversion rates of separate channels, user retention or new means to acquire customers. Going even deeper, each individual team member in the marketing team can then be responsible for a certain subset of those KPIs.
Connecting the dots
We regularly encounter that OKRs for a marketing team end at the point where marketing hands over the traffic / potential customer to downstream systems and teams be it the shop system for an e-commerce platform or the CRM in case of the B2B company. For us it is essential to make marketers understand that the actual value of the lead lies in “closing the deal”. Good marketing KPIs take into account not only having acquired a potential customer but how good the marketing channel itself leads to the revenue goal. In a simple way this could mean that next to cost-per-lead for B2B companies the marketing department would also take care of a KPI that improves cost-per-sale or looks at annual recurring revenue (ARR). This in turn enables a different level of working with OKRs namely better communication between departments. OKRs should not be seen isolated as a per department goal set but as a means to align with the whole company on what to achieve in a quarter. By making the marketing department attributable to cost-per-sale or purchases in a shop system the marketing department needs to take into account how good the traffic performs that they acquire. More often than not those KPIs actually need to be established in the first place as this view on the whole value chain from euros spent to euros earned has not been established in many companies. Going one step further one could actually look at channel attribution to annual recurring revenue of marketing channels or in regards to e-commerce KPIs regarding customer lifetime value and user retention.
Tracking: the first step towards good marketing KPIs
In order to be able to make good decisions based on data you actually need good data: this means being able to measure the data points that you need for your evaluation and understanding whether you get the full picture or if you have a subset of tracking points. In many cases web tracking setups have grown “organically” within companies without being based on an aligned tracking and data strategy. We regularly see inconsistencies in lead attribution to different marketing channels by not selecting the same basis of website trigger as one example. Cleaning out discrepancies can provide a huge step towards better understanding. Next to that the topic of attribution is still a huge debate among companies even after years of improved tracking tools and evaluation measures. Do I attribute traffic to the first click that brought the user initially to my company or do I attribute them to the last click which closed the deal? With a modern reporting setup those numbers can be automated, established and build the basis for a good set of KPIs.
In light of the changes of the last years and months when it comes to user privacy in regards to cookies in the European Union, the handling of tracking by browsers has significantly changed and impaired analysis (one needs to mention Firefox for example where a lot of the standard tracking tools are blocked by default) which can skew the picture of what you know about your customer. Solutions for that are in development by the players in the market but lack of data is a regular topic with customers these days. If you want to learn more about this critical subject, you should check out our article on the three types of cookies your team should be aware of.
Today it is not a technical challenge to have a full overview of what is happening on your website and consequently in your shop system or CRM when it comes to relating that traffic to the marketing sources that brought in the traffic. There are concepts of properly attributing marketing even without having to break the privacy laws.
Based on those measures it is way easier to come up with optimization ideas, ways to improve your funnel and attribute your budget better: stopping channels that don’t see the performance that you need to be profitable and being able to test your channels based on the evaluations and optimizing those in live tests with specified budgets.
Reaching your goals – a numbers game
After establishing a data strategy and tracking plan for your website connecting your marketing information to your shop system or CRM and establishing an automated reporting that you can evaluate on a daily basis without manual input there is a lot of transparency towards reaching your business goals: is there a highly profitable channel where I can just extend my budget to get more valuable traffic onto my page? Was the investment in content marketing the right move and do I see a growth in organic traffic? Shall I add paid social marketing to my portfolio of marketing channels and how do those leads perform compared to paid search? In a connected business intelligence set-up you can set up reports answering those questions, implementing your company’s goals and OKRs in your daily reporting and thus providing your teams with the means to understand current performance and potential areas for optimization. There is a proper setup for each stage and size of company from simple sheets based to proper data warehousing. If you are interested in what would be a good setup for you, feel free to get in contact with us and we’ll be happy to walk you through potential options.