TLDR: Some marketing metrics power better decisions; others can’t. Learn the difference between vanity and impact metrics to stay focused on the data points that matter.
In the past, marketers without the analytics tools or numerical knowledge to discern the value of different metrics have relied on vanity figures to interpret the impact of campaigns on business growth. Now, Marketing is an increasingly data-driven profession, with a strong emphasis on analyzing and reporting on campaign performance to surface and optimize contributions to revenue.
In organizations where the data literacy of senior leaders and stakeholders around the business is underdeveloped, Marketing has a challenging but important task: to translate the technicalities of data into accessible narratives of why certain numbers matter and how the business can use them to support growth and improvement.
This Tough Talks Made Easy will help you to discuss the real value of Marketing’s data with C-Suite. You’ll learn to explain the differences between metrics that power better decisions and numbers that just concern optics, encouraging your leaders to gain a firmer grasp of the data points that are truly meaningful for understanding and improving commercial performance.
THE QUALITIES OF IMPACT
In conversation with your CMO or CEO, they’ll want to understand, at a glance, what’s happening with your campaign tactics to drive ROI. If they’re unsure how to interpret Marketing data to reach this conclusion, share that two qualities make a metric valuable: accuracy, and the capability it provides to project or calculate impact on pipeline or revenue.
If you can’t be sure of its reliability, or apply insight from that data to make campaign decisions that generate growth opportunities, what you have is a vanity metric—a number that might seem impressive at a glance, but has a very limited ability to inspire constructive actions.
Email campaigns are especially notable nowadays for yielding vanity metrics. Many organizations have implemented bots to screen for and block malicious email components. These bots pre-open emails before delivery and may even click links and follow through to scan for questionable content, which produces inflated engagement metrics.
C-Suite might view the likes of opens and clicks as a helpful baseline to gauge the extent of positive response, but you can’t bank on any deeper insight than that. This is ultimately a siloed data set that doesn’t correspond with any activity that increases pipeline or revenue, nor is it reliable.
DOWN TO CONVERSIONS
For top-level metrics to convey any strategic value to C-Suite or answer questions about Marketing’s impact, your reporting must prove a connection between particular engagement stats and down-funnel activity.
Following an event, for instance, it would be methodologically impossible to base any ROI calculation or forecast on the number of registrations or interactions you’ve experienced. Instead, C-Suite needs to see deeper into the data: how many of your engagements converted into opportunities? What are your close rates from this? Are Marketing’s campaigns and content increasing the likelihood of closure?
These are the links that help C-Suite understand how Marketing activities contribute to deals, and allow you to form and test hypotheses with your campaign expenditures to optimize growth. Let’s say your webinar nets 50 closed deals from 4,000 attendees—will ramping up spend on webinars produce a proportional increase in conversions?
Your CMO and CRO want to know how Marketing contributes to the bottom line: by analyzing conversion metrics, Marketing can play with levers to increase conversion ratios at each stage of the funnel and significantly support the achievement of financial targets. C-Suite should understand that this requires investment: the cost of engagements sets your budget, so if leadership wants to see Marketing optimize their rate of conversions to opportunities, they’ll need to sign off on a larger campaign budget.
If C-Suite has only had exposure to vanity metrics in the past, the way to convey impact is to continuously forge connections between various data points and their bearing on deals. A good example to illustrate: MQLs to SQLs is a strong indicator of how well Marketing is qualifying leads, but its meaning is limited in a silo. Join the dots between MQLs, SQLs, and deals, and you have a story to tell C-Suite about how your campaigns drive dollars into the business.
INPUT VS. OUTPUT
Depending on the numerical literacy of your organization’s leaders, you may have to strip away the technical jargon that comes with metrics and get straight to the essence of value. In a nutshell, it’s input vs. output.
By analyzing and reporting on data about conversions to opportunities and closed deals, you assess how much output the business receives from a given input, and where the opportunities lie to increase spend and maximize return. By comparison, vanity metrics (i.e. engagement stats in siloes) reveal nothing about ROI, and so can’t influence well-informed decisions about the direction of your Marketing activities.
As your business ramps up, and senior figures become more confident in their understanding of meaningful Marketing data, it’s wise to flag that this input vs. output analysis cannot happen manually at a large scale. In order to evolve your metrics, leadership should invest in attribution modeling to gather and synthesize campaign data so you can continue to understand how Marketing efforts make an impact and unearth opportunities to generate growth.
For any guidance you need with interpreting the value of your data, or getting attribution off the ground, Revenue Pulse is here to help. Follow Revenue Pulse on LinkedIn for daily advice.