I recently had a chance to connect with Tom Cole the President and CEO of RDA. Here’s a summary of our conversation with the full interview to the right.
While working with different clients on how to improve their market strategies, one of the biggest red flags we see is a company having 30 or 50 things that they consider to be “key measurables.” On paper, this may seem like attention to detail. In reality, however, this is more likely a sign that they don’t know what to focus on. In other words, they don’t know how to meaningfully measure their business so they just measure everything. Ideally, you want to get yourself down to around 4 or 5 key KPIs in order to track your progress towards business goals. But where do you start? Let’s take a look.
Losing Your Internal Focus
The industry was already in a stage of disruption and the pandemic sped things up. This disruption also exposes a flaw in a lot of KPI plans, keeping too internal of a focus. What marketers need to do more of is understand that we are in a buyer-centric industry. The journey the buyer goes on is going to impact their options, decisions, and ultimately, your results. The first thing you should look at when choosing KPIs is how well they tie to customer behavior, as well as their final actions. This means fighting the internal instinct to focus all your KPIs on internal processes.
Fighting this instinct can be a hard thing to pull off, but it’s well worth focusing on. As you look at different measurements along the customer journey, you can build key insights to work with. This means implementing micro-revisions to help improve your overall marketing strategy over time, rather than doing sweeping shifts that aren’t guaranteed to work. An important tendency for marketing success is a culture of continuous improvement. Smart KPIs help you figure out what to improve.
An important thing to add onto this point is that while we haven’t seen a situation like the pandemic in our lifetime, this isn’t the first time the marketing world had such a massive shift. In the early 2000s, we saw something similar going on as the ERP systems came to prominence. With all these changes, again, the best way to find our true north was by listening to the customers and doing continuous small changes based on what we heard.
Starting Points For Smarter KPI Use
Another important thing to mention in this conversation is that when it comes to KPI investment, it’s not all about just buying the perfect tool to fix your problems. Instead, you want to put together a leadership team, in order to fully understand where your company is in terms of measurement capability. This can be the CMO, CFO, members of the sales team, or even the product team. The idea here is to create a collaborative effort to determine your capability to find insights. Do you have the ability to do multivariate testing? Can you only do A and B testing for now? When you do a test, and you have the ability to take action on it, you’ll have a better understanding of where your company stands now.
In addition, part of the reason why we say to measure a few key KPIs to start rather than doing 30 or so is that you need to take baby steps. Working within your capacity lets you take the smaller initiations that let your team grow. This may include bringing outside support to help you create that roadmap, including the KPIs you need to be looking at.
So, if we had to sum your KPI search into 3 major points, here’s what you should be doing:
- Measuring what drives your revenue
- Looking at the customer journey when deciding what to focus on
- Using internal collaboration between, sales, finance, and marketing for testing and strategy
Watch the full conversation here.