There are as many different marketing strategies and tactics as there are days in a year, possibly more. From tried-and-true media such as TV and print to influencer marketing, email and social media, brands have a long list to choose from.
This variety yields greater opportunities for creativity, but it has also led to challenges. Namely, it’s imperative for marketers and brands to understand if their tactics are working as intended. Without measuring the effectiveness of a campaign or promotion, how can a business know if they are reaching customers?
Enter key performance indicators (KPIs).
Key performance indicators (KPIs) are a common baseline for assessing performance. Developing KPIs that tie directly to business objectives and deliver clear actionable insights is critical to revenue growth. Common KPIs include: Customer Lifetime Value, Customer Acquisition Cost, Website Traffic to Website Lead Ratio, Social Media Reach and Engagement, Email Marketing Performance, Landing Page Conversions, MQL to SQL Ratio, and Blog Post Visitors.
However, this process is normally fraught with complexity and challenges. With multiple channels—offline and online—and media, marketing goals differ within an organization. This is made more complex by layers of hierarchy, outside vendors and in-house consultants within an organization. Teams work to achieve different KPIs, incentive structures and goals. As a result, aligning these is a challenging process.
Read on for a deeper look into some of the challenges of marketing KPIs and how you can overcome them.
Top Challenges of Marketing KPIs
To learn more about these challenges, we asked a group of business leaders and marketing experts from B2B and B2C brands to discuss the ways that successful companies can measure performance.
Specifically, we wanted to know more about the challenges associated with marketing KPIs, including gathering and accessing KPI data, using KPIs, reporting and presenting KPIs. We also wanted to learn how they thought collecting and reporting marketing KPIs could be more efficient.
1. Unclear Objectives and Unaligned Goals
The experts agreed on many of the same challenges. For example, several noted that knowing specifically what is being measured and why it is being measured is the first barrier to overcome.
In fact, most KPIs adopted by brands are not a reflection of clear, fact-based insights and modelling, which should be driving the marketing plan. These KPIs are not based on a sound analysis and are therefore difficult to interpret.
2. Lack of Adaptability
The marketers we spoke to also reported a lack of adaptability within their teams and organizations as a whole. They noted that as projects and objectives change, as they always do, the KPIs need to change as well—except they often don’t.
3. Understanding and Making the Most of Data
Data from a Global CMO Study by IBM shows that most CMOs are not prepared for the complexity and volume of data in the coming years. Another study by EMC Research indicates that a majority of organizations do not use data to understand certain KPIs and, as a result, often encounter many hurdles when dealing with today’s marketing landscape.
How a marketer uses data once it’s collected is another challenge. Too much data without analysis is a common problem, especially if the data platform does not have robust analytics capabilities.
Our experts agreed: what good is data if it’s not used in a meaningful way? Interpretation, reporting and presenting the data are as important as collecting it.
4. Limitations of Platforms
According to Anvesha Poswalia, Digital & Brand Strategist, most platforms don’t provide marketers with the best analytics. This is largely due to the limitations of some of the platforms they use. She notes, “Some platforms like Instagram provide very little analytics and hence you either have to make do with what is readily available, or depend on third party tools to measure certain KPIs.”
Rick Egan, executive leadership and e-commerce leader, also weighed in on the issue, “Each channel wants to take credit so you have to contend with how you divvy up credit. Analytics systems are flawed in their collection methods so you are left taking a best guess and arbitrarily making choices which skew towards certain conclusions.”
This, as a result, makes it hard for marketers and brands to establish an unbiased single source of truth.
How to Overcome Challenges
Here are four steps to overcoming KPI challenges.
1. Have an Action Plan
You need an action plan which will enable you to focus on important KPIs (such as the quality of leads instead of the number of leads generated) and set them in a timely and cost-effective manner.
The plan should also ensure marketing teams and management align on objectives and the KPIs that track progress toward achieving them.
2. Be Flexible
The ability to assess changes in the market or consumer behavior and to respond appropriately is a hallmark of a successful brand.
Whether goals change or remain consistent year over year, you need an actionable understanding of what’s influencing consumers across the entire customer journey and the ability to adjust accordingly.
3. Let the Data Tell a Story
According to Falguni Desai, head of digital strategy and transformation, “There needs to be a narrative formed around how the metrics are shaping the marketing strategy. Simply tracking them and submitting them as part of a monthly dashboard is not the endpoint.”
Understanding performance by gathering, measuring and analyzing data is part of any successful business strategy.
Today’s complex marketing environment means brands have to use data properly. Letting your data tell a story is crucial to helping you to make improved decisions, gain competitive advantage and successfully deliver on marketing strategies.
Striving to have the most up-to-date information to ensure accurate analysis should always be the goal.
At the same time, marketers and brands should deploy a central data hierarchy across the organization around the right KPIs. At many companies, multiple departments view the data independently, which leads to varied interpretations instead of a single version of the truth. Teams working in silos risk having separate narratives about how the metrics are contributing to goals instead of a holistic view.
The takeaway here is if you’re not pulling business-relevant insights from your data in a consistent, cross-team manner, you have a problem. Take the time to evaluate your company’s KPIs and ask yourself, “Am I linking our KPIs to the overall strategy?”
4. Leverage Robust Dashboard Building Tools
A robust dashboard building tool can help you create different versions of the analysis for different stakeholders to cater to their needs. Additionally, this will help you create a story that can be continued through time and is built on an overall strategy rather than a campaign.
Carola van der Linden, Social Selling Program Management, Social Advocacy, Digital Sales B2B, EMEAR Sales/Marketing, advises brands to leverage advanced dashboard building tools such as Tableau SW. This data visualization software makes KPIs more understandable by connecting different data sources and allowing customizable dashboards.
Marketing in the Digital Era
In the digital age, optimized and appropriate use of key performance indicators (KPIs) is central to helping marketers compare and understand performance across the organization consistently.
However, for marketing KPIs to be truly effective, you have to ensure that you fully understand the challenges associated with them, then formulate a plan and adjust as needed. Also, don’t be afraid to be different. Measure what’s important to your company, not what everyone is measuring.
Want to learn how Nielsen can help you develop marketing KPIs that directly tie to your business objectives and deliver clear actionable insights? Request a demo today
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