7 Essential Questions: Part 7

It’s planning season for many businesses. That’s why over seven weeks we’re posing seven questions you should ask yourself and your team that will inform your marketing planning for 2020.

This week we explore our seventh and final essential question: "What will you measure – and how?" Our recent posts covered setting business goals, defining audience, marketing goal-setting, strategy development, choosing tactics and determining a budget.

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As a blog from email marketing firm Litmus recently put it, “Imagine you logged into your bank account and noticed that your balance had mysteriously increased by $1,000. You had no idea where that money came from or why it was there. It just... happened.

“The next morning, you logged in again. This time, your balance went down $500. The next day, it went back up $1,000. And the following day, it dropped all the way to zero—again, with no clues or insight into why that happened. No cause. No culprit. All you knew was that it happened.

“Now, here's a dumb question: How would you react to those swings? Unless you're the most relaxed person in the world, you'd freak. Not just about being broke, but because you had no idea how or why it happened.”

We couldn’t have described it better. If you’re like most people, your reaction would be a mix of shock, panic, fear and disappointment. That's a trap you don't want to fall into. If you go to the trouble to build a strategic marketing program to build your business, you need to be able to track your progress – first to see if you need any course corrections, and second, to see if you’re getting a return on your investment of time and money.

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What's important to measure?

What’s reaching people? Who’s reacting favourably or negatively? Is your audience growing – and are they converting to paying customers? Are they feeling a sense of excitement or loyalty toward you?

You can group these types of questions into two guiding categories for measurement: quantitative and qualitative:

• Quantitative literally means the things you can count – website traffic, visitors in your shop, reservations for your restaurant, phone queries, social media mentions, etc.  Duct Tape Marketing's John Jantsch says his favorites include community membership (numbers of blog readers, social followers, email subscribers, etc.), average money spent per customer, repeat purchases per customer and percentage of customers who came by referral.
  
  Conversions – people who convert from audience to paying customer – are the top metric you’ll see talked about and clearly are the most obvious measure of whether your marketing resonates with people. It’s one thing for people to be aware of your business, but did act on that knowledge, and how?
  
  
• Qualitative is the “softer” side of things – it’s about people’s feelings of loyalty, trust, excitement, disappointment, etc. Are you getting more buzz? Are people giving you positive reviews? Are you getting more complaints? This is as important as quantitative measurement as it reflects people's feelings – and we always say, people buy based on emotion.
  
  Consulting firm Bain created an entire system called the Net Promoter Score – essentially a survey tool to help learn more about who your customers are, how they feel about your service, and what you can do to improve it. In practice, you can do this today by asking two key questions, scored between 1 and 10: “How likely are you to recommend our product or service to a friend?” and “What is the reason behind this score?” Asking people “why” can yield much useful information you’d wouldn’t necessarily get by counting email opens or restaurant reservations.
  
  For future planning you can extend this method by categorizing customers into groups like “promoters,” “passives” and “detractors” – providing you some valuable guidance on how to adapt your approach with these different audiences.
  

So how do you measure?

There’s no perfect scenario or method, although you’ll find hundreds of articles out there describing each author’s “must do” top measurement priorities and techniques. They key is to develop your own, relevant system of metrics – the things you can count or be guided by – that work for your specific business.

For example, a food business may track how many people redeemed the coupons they offered at a tasting event, while an accounting firm may track email marketing to see how many people made inquiries about help for tax season. An online shoe shop might survey their customers about their favorite colors or styles and track website traffic to see who’s browsing and for what.

The best place to start is with your own customer’s journey. Try this exercise: take a sheet of paper and draw a long line on it. On that line mark and label points  representing every possible interaction you’ve had with your customer, from when the first hear about you to when they buy your product or service and even afterward. You can get creative and branch out multiple lines to represent different customers or multiple ways the same customer interacts with you.

Each of these points represents a marketing opportunity that can be measured. For example, if you’re running an ad online you can put in a custom coupon code that only people clicking on that ad will use. Use Google Analytics to track your web traffic to see how people use your site. Monitor who opens your email promotions and when – and which headlines seem to be attracting the most attention. Run a survey of your café customers to ask their favorite winter dishes or flavors, or ask them questions about satisfaction and customer service.

Feeling overwhelmed?

Don’t worry, you’re not alone. Brands big and small struggle with understanding whether their marketing is having an impact. Litmus studied email marketing alone and, as reported in their 2019 State of Email Analytics, nearly a quarter of brands can't track email interactions down to conversions. Fewer than half can measure their email marketing return on investment. And less than 28% of brands can measure subscriber lifetime value, which many consider to be the king of North Star metrics.

So if the big boys have trouble, what’s a small business supposed to do? Just remember that putting a system in place that can help you be more strategic is better than no system at all. Track what you can and be open to learning from the information you gather. As in our opening analogy, you don’t want to the one at the bank wondering “where did all that money go?”

Next week

Our holiday round-up of fun examples and ideas to inspire your 2020.

Last week

What will it all cost? Making smart budget choices for your marketing efforts.