If you’re a Wall Street Journal reader, there was a great article by Peggy Anne Salz on page A10 yesterday (it’s not available online). Peggy talks about the value of using metrics as a corporate tool and how companies like Anheuser-Busch, Procter & Gamble and Google use metrics to improve decision-making and performance.
I’m a fanatical metrics user and rarely make decisions without reviewing the numbers. If you work for a small company, you don’t have the same resources as “the big guys,” but some metrics are fairly easy to collect and can dramatically improve your results.
Since this is a marketing blog, let’s talk about how improve your marketing metrics.
1. List what you’re currently measuring. Close ratios? Conversion rates? Cost per lead? ROI? CLV? Nothing at all?
2. Find a single additional area that you can measure. Could you use better data from your website? Choose one data point and start collecting. Would you like to compare the lifetime value of different customer segments? (Here’s a way to measure it.)
3. Track and review your measurements. Over time your data should make marketing decisions easier. For example, if you start measuring CLV and find that one segment is substantially more valuable than another, then find more customers for that segment. If you measure ROI for three different trade shows, you may decide that next year you’ll only go to two — and you’ll invest more marketing dollars to increase your exposure.
4. Involve your team. The more people involved, the more importance the metrics receive, and the quicker they become adopted into your “standard operating procedures.”
5. Repeat the process. Add metrics one by one and act on your findings.
If you’re a baseball fan, you may have heard about the movement toward using specific metrics to better measure the value of young players. Michael Lewis chronicles this trend in his best-selling book Moneyball: The Art of Winning an Unfair Game. Teams such as the Boston Red Sox, the Oakland A’s, the Toronto Blue Jays, the Texas Rangers and the New York Yankees all have general managers that heavily rely on metrics to make talent decisions.
(Mr. Lewis also authored two other favorites of mine, Liar’s Poker: Rising Through the Wreckage on Wall Street and The New New Thing: A Silicon Valley Story. I highly recommend both!)
Most big companies understand the science and mathematics behind their marketing, because the sheer size of their marketing budget requires it. Many small businesses still view marketing as “fluffy” or “hit or miss” with little substance. Creating marketing metrics can help you deploy “big company” tactics in your small company.
More importantly, it can help you make better decisions.
Feel free to add your comments below or ask a question directly!
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