It’s estimated that 74% of marketers don’t know or haven’t measured how their efforts impact their company—not knowing how the decisions you’ve made can cost you time and money. It is essential to track the success of any given marketing campaign.
Various teams or departments within your company may even track specific data points. Often this information is not centralized or easily shareable with stakeholders. Furthermore, you may not even know whether the metrics you collect align with your business goals. The best way to combat these issues is by measuring the impact of your efforts on your business.
To measure your impact, your business will want to create a Measurement Strategy. This is an overarching plan that determines how your business goals will be measured. This strategy starts at the top. From there, it follows a path from high-level objectives to smaller measurable goals such as metrics, KPIs, and finally, segments within each metric.
When developing your measurement strategy, you will want to define your business objective. Then you will want to outline each goal that adds up to the business objective. These may be abstract goals such as increasing brand awareness or more concrete ones such as increasing app downloads by 25% each year.
Once your goals are outlined, your measurement strategy should identify the key performance indicators (KPIs). These are measurable and actionable items that indicate success towards your goals and objectives. KPIs inform your business decisions. Metrics, on the other hand, track the business process. They are pulled from databases and analytics platforms and can be further broken down into segments, i.e., demographic information, digital traffic channel, location, and more.
Collecting data on all aspects of your business, especially your marketing campaigns, shows you what’s working and what’s not. Once you are armed with this knowledge, you will be able to make the much-needed adjustments.
One of the most important metrics your business will want to track is its return on investment (ROI), as this will show you how profitable your business really is. You want the money spent acquiring customers through marketing and sales funnels to be less than what customers spend on your product or service. Overall you want to earn more in sales than you spend on marketing. A good Measurement Strategy will take this into account and define how you will measure profitability.
Sometimes, you may feel that some part of your business is underperforming, but you don’t have the analytics to show precisely where or which part. Putting in place performance metrics will allow you to identify which areas are, in fact, the problem areas.
It will also help you set expectations for growth. If your website or app only has 1000 views or users per month, you most likely cannot expect to grow to 10,000 or 20,000 views in the following months. You may feel your website is underperforming, or you may need to adjust your expectations for growth.
Tracking metrics can help you evaluate business decisions and know if the changes you made brought positive results. For example, once you know your website or app is underperforming, you can make decisions to address the issue. You may need to adjust your marketing campaign or adjust a feature on your product. By tracking the analytics, you will see if the changes you made accomplished what you intended.
While you cannot know the future, you can observe and measure market patterns. Tracking your business’s KPIs and metrics will help you see patterns and build a forecasting model. This approach will help you predict or estimate the future result. It will reveal the ‘market potential’ of your product or service.
There is no doubt about it; if you are raising capital, you will need to have a measurement strategy. VCs want to see your analytics. Most of all, they want to know you are measuring and understand the KPIs and metrics that impact your business goals.
Having a plan for how you will measure your business success is critical. It will help you communicate with your team and all key stakeholders. Once you put a measurement strategy in place, you will gain a deeper understanding of your business and how to achieve your goals. The more you know, the more your business will grow.
If you’re ready to take your business to the next level with the help of a Measurement Strategy, please get in touch with us.