Marketing: don’t be like the KLF; do measure the right metrics

Image: Z. Judy (CC By 2.0 License)

Remember the KLF? Rock stars, artists, provocateurs: 23 years ago they burned a million quid in a field. That really upset quite a lot of folk. But it’s what lots of business owners and social entrepreneurs are doing all the time.

Last autumn I was dismayed but not surprised to read research showing that almost a quarter of professional digital marketers in the UK do not track their marketing spend. Yes, in an age when wonderful analytical tools are available, many don’t even make the effort to measure the return on their investment. They simply don’t have a clue. Even though they are paid to do it.

But the same research revealed that it’s not as easy to do as you might think. Three quarters of marketers DO want to measure their spend and their results. But 44% say they struggle to measure the return on investment of their digital marketing, and 35% to measure the ROI of their offline marketing. Interesting: you might think digital is easier to measure than offline.

Measurement is crucial. But what should you measure and why? Well, return on investment seems like a good place to start.

Incidentally it’s tempting to think of return on investment only in terms of money. Yet business owners and social entrepreneurs also commit huge amounts of their expensive (or at the very least valuable) time to marketing and communications activity.

Social media can be an enormous time-sink for instance, especially for businesses in which “entrepreneur does all.” Setting up and posting regularly to your company’s accounts on Facebook, Twitter, Instagram, YouTube, Pinterest, LinkedIn, etc might give you an ego-boost from likes and retweets and other engagements. Lovely. Is that going to pay the bills? Is there an actual point to it? Are you labouring under the mistaken apprehension that social media activity is worthwhile simply because it’s “free”?

Get your communications and marketing strategy right though (whether it includes social media or not) and it will not only be measurable, it will propel your business or social enterprise. Get it wrong, and you might as well be burning money like the KLF (I think we call them the Justified Ancients of Mu Mu these days).

So what should you measure?

• Likes on Facebook posts? Retweets? These can be vanity metrics – they can’t pay your bills. But thanks to the magic of Google Analytics, you can track whether social media-generated traffic to your website converts into enquiries, sales, or email newsletter signups.
• Open rates for your emails? Again – vanity. Click through rates from your emails? That’s better, now we’re getting somewhere.
• “Advertising Equivalent Value” for PR? Do you really care? Traffic to your website after a great piece of PR (and, again, whether that converts into enquiries, sales, or email newsletter signups). Yes, sounds good, that’s more like it.

Now don’t get me wrong. The three metrics in the first part of the bullet points above can be useful parts of your marketing measurement dashboard and can help refine what you do. But the latter parts of each of the above bullets are more important than the former. And people tend to concentrate on the former.

And your absolute priorities to measure and understand are:

• the additional revenue generated by your marketing and communications (so many people, when dealing with new enquiries or customers, don’t actually ask where people heard about you!);
• your return on investment;
• your customer lifetime value;
• your cost of acquisition per customer.

Get, and keep, a handle on the last two and you can refine your marketing so that you always generate a return on your investment. Don’t know the results of your marketing and communications? Then stop now until you do!

What next?

• Book my 1 or 2 hour, 1/2 day or full day workshop, Three things most businesses miss in their communications and marketing strategy – and how to implement an effective, integrated and measurable strategy for 2018 – get in touch via the contact form. It was described as “just what I needed to fill in the gaps” and “incredibly informative, detailed and practical” by participants when I last ran it.
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