Every March, we welcome the madness of the National Collegiate Athletic Association's Division I Men's Basketball Tournament. No matter if you're a die-hard hoops fanatic or you are simply picking teams based on your favorite college mascot, we turn into a nation of "bracketologists" whenever it's March Madness time.
Brackets provide a convenient, intuitive heuristic for evaluating teams on a 1-to-1 basis, making it simple work to go from 64 teams down to the ultimate winner. However, the simple framework hides the analytical complexity. The odds of you successfully picking the full 64-team bracket are 1 in 128 billion!
The good news is a marketer has much better odds successfully using analytics to pick the right metrics to better understand and engage your customers.
The bad news is while March Madness lasts only one month, marketing measurement madness is 365 days of the year. Customer loyalty is the ultimate trophy for a brand. In an increasingly competitive marketplace, brands need to use the best analytics tools so they can make the right decisions to achieve loyalty. So how do we get there? In today's data-driven, always-on connected world, we have a tower of babel of marketing metrics. You can find almost any metric you like. And we can even get hooked on a single metric (who's still using click-through rates?). As the saying goes, "Not everything that counts can be counted, and not everything that can be counted counts."
So how can marketers win on the road to customer loyalty? Here are three winning plays:
Measurement should not only be an evaluative scorecard, gauging whether a campaign succeeded or failed.
Measurement should be focused on growing our knowledge set. Learning requires feedback and measurement provides that feedback.
Too often, measurement is completed at too high a level, with too slow a feedback loop to be actionable. The more granular your analytics, the more powerful the learning loop. It is always difficult…painful…to shift working dollars into research, but perhaps it's time to reframe research dollars not as non-working, but as working-forward. Measurement is about future-proofing, so we don't repeat the same mistakes campaign after campaign, year after year. Even better, some advanced measurement systems have built in utilities that help forecast impact, even in light of business driver changes.
After every campaign, you should demand the analytic rigor to know if your target was right, if your audience was right, if the translation of your audience into media targets was right, if the channels were effective, if the publishers within those channels performed, if the campaign shifted hearts and minds, if it brought in new consumers, if it paid back. If you don't have the answers to all of these questions, how will you know what to change next time?
Measurement needs to be connected.
It must be always on. It must include an abundance of elements. People don't live in the digital world or the physical world, they live in both – the "connected world." They are impacted by what they see, what they hear, and the context in which it is delivered. They deal with the realities of time constraints, financial pressures, their families and friends, and their own personal environments. All of these elements factor into and ultimately impact customer decisions.
Measurement models that limit their focus to only a few measurable channels lack explanatory power. If your customer is exposed to TV, but it isn't included in the measurement model, does that mean TV had no impact? Or is the impact of other channels overstated? Advertising's impact on sales is only a portion of total uplift. According to research by Neustar MarketShare, marketing's contribution to sales ranges on average between 5% to 30%. Heavy upper-funnel advertisers are at the low end with very heavy lower-funnel, direct response driven advertisers are at the higher end. Other elements, like in-store merchandising, competitive activity and price gaps play a large role of impacting decisions at shelf. Are those included in the model or is all impact attributed to advertising?
And what about external factors? One thing we see in retail, for example, is the impact of changing shopping patterns on sales. Customers are consolidating their shopping trips, buying from a smaller basket of stores, and shifting some purchase from brick and mortar to e-commerce. National footfall patterns are reliable predictors of store traffic. Weather is another reliable predictor. An analytic model that doesn't factor in critical econometric externalities is overstating the impact of marketing.
Finally, there is no one metric to rule them all.
It's sad, but true. We all would love that "silver bullet". Now that we are applying financial measures such as ROI to marketing, too many marketers are chasing ROI blindly down the court. Delivering ROI is easy. For example, put all of your money into search–you'll probably see great ROI! Delivering consistent topline growth is much harder. Let's keep our eye on the prize, here. Delivering ROI and topline growth is the real goal. A well-respected CMO I used to work with would say "we have to walk and chew gum at the same time". Chasing one measurement goal at the expense of all others is unacceptable.
Rather than declaring one KPI or measurement the "goal," a smarter approach is to create your own "final four" –an analytics-driven basket of metrics that represent success for your business and for achieving customer loyalty. Find and use good measures that you understand, that your C-suite will find valuable, that will help you learn, that are comprehensive enough to be truly explanatory and predictive, and that can be used to understand business success from critical perspectives: Brand Health, Advertising, Performance and Financial Return. Create a dashboard of these key metrics to provide focus for the business on an ongoing basis, not just at the end of a campaign. And challenge your analytic partners to go deeper to truly map how consumers live, not just what's easy to measure.
With these three winning plays, the odds are in your favor. Fill out your Marketing Measurement Madness bracket to start your Road to Customer Loyalty today.
By Julie Fleischer