The Evolution of Marketing Metrics, Part 1

In marketing we love to use military terms to talk about what we do.  We launch campaigns and use tactical and strategic planning; we talk of deploying our resources.  So in keeping with the military theme, I thought I’d talk about the evolution of the latest weaponry to hit the marketing arsenal and how it is much like the modern battle tank.  I did say in my last post I was going to have a little fun with this one, and this is it. 

Back in 1916, the western front in Europe was a stalemate.  Each side would launch an attack and throw thousands into the battle for little gain.  Much like today in many industries, marketers throw millions of dollars out there and send out various marketing tools to take market share. Often those millions are spent for little gain and what is taken often gets lost in the next business cycle as the competitor counters. 

In 1915, the British tested the first tank but it wasn’t until 1917 that they actually first used tanks.  At first, tanks were deployed one at a time or in small groups with nothing more than shock value as their weapon.  Those early tanks were poorly designed and almost as fatal to the crew.  Sort of like metrics today where those marketers who use poorly designed ones, often find themselves at the mercy of poor tools.

After the war, ideas sprung up as how to use tanks in the most effective way.  Many theories came about, but few were really effective.  In WWII, those ideas were put to the test and refined.  Finally over the 60 years since, certain doctrines were refined.  Now tanks are often part of a fast strike unit, used to take ground fast and hard, so fast the other side has little time react.  That is the goal of marketing metrics, to make them so useful, an organization and move in the market so fast that competitors have little or no time to counter.

 

Metrics today are much like tanks in 1917, we know that they are important, but we really don’t know how to use them to gain the most out of them to help marketing be the driver that helps sales win markets.  When tanks were first introduced, they were actually misused by some as a way to discredit them, the old school boys didn’t like the idea of metal tanks, they wanted to ride around on horses.  Today, metrics in marketing suffers a similar fate as those early tanks.  Often misused by those who really don’t understand metrics or just don’t understand the potential to help marketing break out and thus help the organization break out.  Proper use of metrics allows marketing to really gain the strategic edge of the competition, being the aid to sales in ways that allow says to go in and gain new customers with improved ROI and customer retention. 

My first job was a market analyst, I sat and crunched numbers all day.  Gross margins, ROI, SWOT, product life cycle, etc…  I am not a math wiz, and the idea of doing stat regressions all day or complex calculus, was not my idea of marketing.  I liked the big picture approach and still do.  But I learned that the world of metrics in marketing can be very insightful and actually very simple.  The stats and calculus has their place but actually, a wide array of tools is the best approach, each used in a specific way, come together in a mathematical choreograph that paints a picture of the world in which you call your market and the influences up it and how you can use this to your advantage.

In marketing today, we have several schools of thought on the use of marketing and metrics.  The one you will find most often are the stats school, those that use statistics a lot.  I find this is most useful with very broad general analysis.  For specifics, I find it is far too susceptible to errors with input.  For the really hard hitting analysis, the detailed bottom line analysis, I am a big fan of your basic algebraic formulas.  Working as a market analyst, I soaked up all I was taught and as I gained more experience, I developed my own metrics.  Often I found there wasn’t a metric formula available, so I had to make one. 

Why algebra?  Unlike stats, algebra formulas require you to stick to strict input systems.  I remember once seeing a stat output that said, all good sales people wear blue socks.  So does that mean if a guy is wearing black socks, he can’t sell?  It’s the garbage in garbage out issue.  Also, from personal experience, I know you can manipulate the numbers to say what you want, far too easily.  So in a way, force the numbers to give you the response you want.  That’s not as easy with algebra, it’s far more simplistic, thus like anything, the fewer moving parts it has, the less likely it is to break, or in this case, give you bad answers.

 

Metrics should be every marketer’s best friend.  We suffer from an identity crisis without them.  Marketing needs to justify its place at the table and metrics does this.  It is for us to demonstrate how and why marketing specific metrics are important.  Those metrics breath life into marketing, it frees marketing.  I know some will say you can’t quantify the creative process, but you can quantify the results and results are what business is interested in.  Plus, a well developed metrics programs in marketing frees marketing, it doesn’t limit it.

 

Yes, there are examples of restrictive metrics, we see that a lot in database marketing, where the marketer is almost held hostage in some extreme cases, to the analysis and metrics used.  That form is one school of thought among many.  I’ve spent over 10 years in this and have seen many schools of thought arise from various areas.  There are no one size fits all programs out there, but there are some simple steps that everyone should take as a foundation and I’ll get more into next time in part 2.

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