Measuring the marketing process and results

Grant Leboff: Bryony, one of the things that’s really important in marketing is measuring progress, measuring success. What are the metrics, what are the measures that you think are most important for people to have in place?

Bryony Thomas: Such a good question. I kind of wish more people would ask it. I think that starting with at least the right question, which is, how are we going to measure our success? Is great. I’m amazed by how many people don’t ask that question.

I would say that there are three key … I call them the universal lessons, in terms of metrics. I could have written a whole book on metrics…. There’s just the one chapter! Really, the three things that I think come together to make marketing measurement meaningful are to bring together volume, progress and outcome. Neither of those makes sense on their own, they only really make sense together. If we think a buying journey, we think about a buying journey over stages, for each stage that you’ve put on what you believe your buying journey looks like, there should be a lead metric, a volume metric. So an awareness metric might well be, reach. Whereas, a sales metric might be, redemptions of vouchers, whatever it might be.

For each stage you should have volume metrics that give you a flag that somebody is there. That’s the first one, having a lead indicator for each stage in a buying decision. The second is, progress. This is about the ratios between steps. It’s probably the most important. If you’ve got 100 people here and 10 people here, the ratio is 10%, and it’s that ratio that is truly going to deliver you profitability. So for each stage in the process you find the ratio in between and as a marketer, your focus shouldn’t necessarily be on increasing volume, though it can be. Because, the smarter move is to increase the ratio, because then you simply make more for less.

The third is outcome. Outcome, for me, is not sales, it’s profit. So outcome beyond the welcome window, so beyond the point at which most people if they were going to churn wood, so you need to make sure that you’ve got metrics that get you beyond that sticking point and beyond payback. At what point after handing over their money do they cover their own cost of acquisition. An outcome, for me, is not a sale, it’s at what point do they move into profit and then obviously into customer lifetime value, if you’re being more sophisticated about that outcome. Three things: volume, progress, outcome.

Grant Leboff: I just want to focus on ratio for a minute, because in my experience of working with businesses, they understand volume because most people do, actually a lot of companies do measure profit, not everybody, but a lot of companies do measure profit and a lot of companies get profitability, and actually even have incentivized their salespeople on profit rather than getting the sales deal, which makes sense. I think the bit I often find is perhaps more blurred and they’re less sophisticated about is the ratio piece. How do you get that right if you’re a business? Because, is there a line in this? Because, I think people have an expectation of kind of sale rate, and they understand volume. How do you make sure ratio is right? How do you get a sense …? Obviously, you can iterate over time, but how do you get a sense that, yeah, we’re getting ratio about right?

Bryony Thomas: Yeah, you’re absolutely right in the question, you iterate over time. Also, I’d say, if you have an experienced marketing consultant who’s worked in the sector a good period, they will have a sense of what the industry best practice is likely to be for the sorts of activities that you’re looking at. In an online sale from webinar through to information product, for example, there is a going rate for what typically people might convert from one to the next. If you’re there or thereabouts, you’ll know that you’re in the right ball park. I’d say the first thing to do is to take some advice from somebody who has worked in businesses beyond just yours, because they will have seen it, they will have seen it in other places.

Then, I would say it’s about incentivizing the ratio…. The reason people go for volume is it’s easy. It’s so easy to count. Whereas, if you actually build in some incentives around ratio, and I’ve never been able to do this actually attached to a commission payment, it’s usually more creative incentives, you know, days out, bunches of flowers, whatever it might be, but make it a focus so that you’re looking at it at weekly or quarterly or whatever interval makes sense for you. I would start with something that’s a ball park, that’s been advised to you by somebody who’s knowledgeable in the industry. I would put it as a key focus on your reports. Make it a board report item, and then incentivize people on incremental improvements in ratio as well as the simple things that you can count.

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