Start With Your Vision

Koen Pauwels, Jan 31, 2021

When managers ask me about guiding their metrics journey, I first ensure they start with the vision for their organization. What is the company aiming to achieve and what should we measure to track that progress? Once you have understood and translated this strategic vision to your team, you can and should explicitly link it to your measurement system. Too often, managers start from the metrics they have instead of the metrics they need.

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Three examples:

  • A car company was proud to have the highest Facebook following and engagement in the country, but saw no increase in sales or market share. It turns out its social media audience did not come in for test drives, which was necessary to get them to purchase.

  • An airline used to measure and reward for on time departure, but its customers wanted on time arrival. Employees learned to game the system as closing the doors was the measure of on time departure, and passengers waited on the runway

  • A bank was surprised customers did not like a branch where managers often worked overtime after a new directive from HQ to improve customer service. Turns out managers were not discussing ways how to best implement it, but instead devised clever schemes to circumvent it, and blame it on tech system failure.

From products to services, these examples demonstrate the 3 marketing metric mistakes:

  1. Tracking metrics that only marketing cares about

  2. Failing to link metrics to market outcomes, such as sales or profits,

  3. Failing to link metrics to productive actions employees can take to increase them.

How do you avoid these mistakes? By starting from the vision, as chapter 3 in notsizedata.com shows and applies for organizations across the globe. We discuss how to uncover the strategic vision for your organization and explicitly link it to your marketing measurement system. Too often, managers start from the metrics they have instead of the metrics they need. Starting with the vision helps to avoid that trap.

5 ‘metrics you have’ that may not be the ‘metrics you need’:

Marketing activity: your customers do not care how many tweets or direct mails you sent out this year. What was the response of (prospective) customer to them? If nothing, did your marketing activity help feed your brand, allowing you to attract better talent and/or better deals with other market players?

Marketing activity metrics can complement customer response metrics to diagnose whether a lack of success is likely due to a lack of effort vs a lack of resonance, but do not tell the full story. You need to link your activity to the chain of marketing productivity.

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  • Paid search clicks: How many of those clicks end up being paying customers? Why is this % so low and how can we improve it?

Research shows that paid search works best for lesser known brands with products of high ‘situational importance’, e.g. refrigerators and office furniture. Customers only need such products once in a blue moon and do not keep track of changes when they are not in the market for the product. However, once in the market, customers need to efficiently search for lots of information, and search engines shine for this job. In contrast, paid search is often superfluous for well-known brands of products or services customers use often, such as eBay. 

  • Social media engagement: Is it positive or negative for your brand? Which topics do engagers talk about? Is there any possibility to gain new customers?

Research shows that the vast majority of people following your brand on social media are already customers. And usually they are a tiny component of your user base – well under 1/10 of one percent. Following a brand on social media is unlikely to improve purchases by the follower – the real benefit may come from her friends being exposed to the brand and the follower’s endorsement. Moreover, user-generated discussions – even mudslinging by your rival brand’s customers, increases the buzz for your brand and shows prospective customers how much your current customers care for you. 

  • Website visits: How many visitors are actually in the market for your product? What do they look for when on the website? Do they leave happy or frustrated?

Research shows that most website visitors already bought your product and want specific use information. Therefore, you need different landing pages and/or different ads to pull them in. Moreover, changes to website visits show little correlation with mindset metrics (such as awareness, consideration and preference) and should thus be complemented with such mindset metrics to predict changes to brand fortunes.

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  • Word-of-mouth: Which reasons do recommenders give for your brand? Which topics do detractors complain about? Do you only measure online WOM or also offline WOM? 

Research shows that online WOM sentiment is often NOT predictive of brand outcomes and that online WOM and offline WOM may lead to different conclusions about which brands are hot vs not:

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What do I recommend? Work backwards from your customer goals to metrics to helps your organization assess the ultimate value of these metrics. This vision serves as a compass in the overwhelming ocean of available ‘solutions’ offered as an easy fix.