Using Marketing KPI Metrics to Improve ROI

There was a very good article by Laura Patterson titled “KPIs Provide Insight to Influence Success and Strategy”.  In this Laura outlines four steps to finding the right marketing KPIs:

1. Ascertain how the organization is going to measure success.
2. Once you have identified the business outcomes, clarify the metrics to measure success.
3. Make a list of possible KPIs that marketing can use to determine whether an investment will have a positive impact on the desired business outcomes.
4. Track the results for each KPI and the success outcome.

This is great advice and provides a best practice in terms of starting by defining the business outcomes that will be used to measure the success of the marketing campaigns and initiatives.  I’d like to expand on the fourth point regarding tracking KPI results and provide the following best practices:

• Use a dashboard interface to provide ease of use and consistent, interactive analysis of the marketing KPIs
• Automate the extraction of the metrics directly from your CRM, Marketing Automation Software or other mechanism you use to measure activity (even if it is a spreadsheet) as this ensures timely data and eliminates transposition errors
• Provide context around the metrics: show actual results against a target, trends over time, indicate whether the trend is positive, negative or neutral, highlight issues
• Ensure that everyone sees information relevant for them (role-based) and that they can interact with the data to drill deeper into an issue or area of interest
• Provide performance metrics that can be compared to benchmarks – cost per lead, lead conversion ration, cost per opportunity etc.
• Use anaytic capabilities to show forecast projections, variances over time and to perform scenario analysis
• Ensure that ROI measures based on incremental revenue and gross margin are available to demonstrate the business value.

The illustration below encapsulates several of these and provides an example of the type of dashboard capability that can be used for measuring and monitoring KPIs:

As can be seen in the example, various KPIs are shown in the scorecard with the context of history, trend, target and variance.  The user can interact with the data and “drill into” it with a drop-down menu, that in the example would provide a break-down of the New Lead Count by Campaign or Sales Rep etc.  The second row of dials shows the performance measures that have been calculated and much more detail is available under the separate tabs for Leads, Campaigns, etc.

Combining a best-practices approach to defining marketing KPIs with the right tools for viewing, understanding and analyzing the performance of marketing campaigns is right way to ensuring marketing delivers business value and a great ROI.