It's Wednesday. Your executives called you and they want to know how Marketing is contributing to sales growth. They schedule a meeting on Friday to follow up on the team's actions.
Most marketing leaders, in this scenario, rush to put together a presentation filled with creative prints, metrics from Meta, GADs, and social platforms; resume the entire roadmap of the year's campaigns; the presentation has 100 slides and lasts 2 hours.
Even so, there is a feeling of lack of clarity, distrust in marketing data and constant questioning on the part of executives, since they are unable to see how - and if - the 150K views of a Reels are related to the increase in business revenue.
And that's not a reality for a few. Marketing measurement has been inaccurate, inaccessible, and half of a nobody's land for a while. On the one hand, because there is no integration between the teams responsible for business revenue - that is: Marketing, Sales, Customer Success and the C-levels themselves.
On the other hand, because the KPIs are not clear. Each team operates on a separate set of individual performance metrics, rather than being guided by business metrics.
How, then, can we measure and ensure sustainable growth? And how do you arrive at the metric that your executives actually want to see?
The business metric is revenue
Make no mistake: the most important metric for the business is revenue.
Generally, when executives ask what impact marketing actions have, what they are really asking is: “how much did the company gain from this?”.
It doesn't mean that brand building or more granular metrics aren't important; however, there's no use answering B, C, and D if your executive is asking A. The challenge is to help your leadership visualize how each investment contributes to the generation of incremental revenue.
- Also read: How to measure branding ROI
1) Visualizing the measurement model
Creating a clear visualization of the customer journey is essential to transform marketing actions into revenue. This map should highlight each touchpoint, from the first interaction to the final sale and post-purchase.
You can divide it like this:
- Canais: map all the channels/platforms/touchpoints, digital or offline, that customers interact with. This includes channels such as social media, email, SEO, PPC, or offline channels, such as events, print media, and word-of-mouth referral
- Stages of engagement: record actions, such as accesses to the site or raised hands, at every stage of the journey. These actions can be: subscribe to receive specific content, play a tutorial, make a purchase, provide feedback, recommend the product/service to someone...
- Types of customers: segment by behavior or profiles based on characteristics, such as demographics, purchase history, and level of engagement
- Multidisciplinary interactions: how do Marketing, Sales and CS connect to this journey? Who is responsible for each stage? Visualizing these interactions ensures greater alignment between teams, sharing responsibility for revenue generation
- Revenue variables: include market trends and external variables to give greater context to the metrics. You can include market trends, economic conditions, seasonality, and whatever else is relevant. Incorporating these factors helps anticipate potential challenges or opportunities along the buying journey. For this purpose, you can use a MMM model
2) Determine the primary metrics
Choosing the right metric is essential to measure the real impact of marketing actions.
Important: it must be a metric that your team directly influences, without interference from other departments.
Avoid metrics that rely on sales actions, such as scheduled meetings, as they reflect factors beyond Marketing's control. Focus on metrics such as filling out forms or signaling interest.
Additionally, it's crucial that the selected metric resonates with executive leadership. Choosing a KPI that only excites the Marketing team, such as the number of clicks, may not demonstrate the real impact that the campaign has on the business.
By aligning the metric with leadership goals and showing how it connects to wider outcomes, you gain more influence and ensure support for future initiatives.
Finally, your metric must fit your sales cycle. For shorter cycles, funnel bottom metrics reflect the potential for immediate conversion.
For longer cycles, focus on top-of-funnel metrics, emphasizing the foundation your team is building for future conversions. Always keep track of how your efforts contribute to overall business goals, keeping the strategy aligned with the big picture.
It's common for marketers to succumb to pressure and simply choose a generic metric that doesn't reflect the real impact of actions on the business, or choose one over which they have no control - for example, number of statements.
Doing this when you don't have control over the factors that may impact the metric is dangerous.
Another common mistake is choosing too many metrics. This leads to confusion and team overload, without people knowing which metric to actually focus on.
- Good conduct is to state the pros and cons of the various metrics in clear terms. Align these pros and cons with executive leadership before deciding on the metric north
3) Determine secondary metrics
When choosing which metrics to work with, incorporating secondary indicators is crucial to ensure that investment in marketing campaigns generates real value.
For example, focusing only on impressions or clicks can mask problems such as low conversion rates or ROI.
Pairing primary and secondary metrics - such as conversion rate, average ticket, and LTV - offers a more complete view of campaign performance and the assertiveness of more targeted actions.
For subscription models, for example, focusing solely on customer acquisition may highlight aspects such as customer retention and turnover.
Metrics such as subscription renewals and average LTV provide a clearer notion of the effectiveness of actions according to the business model, considering, in the long term, the health of revenue.
- Also read: How to perform incrementality tests
Are you interested in learning more about Marketing Mix Modeling and optimizing investments in Marketing actions?
Subscribe to the newsletter from Uncover and follow us on our social networks — we are at LinkedIn, no Instagram, no YouTube And no Spotify.