Savvy marketers who wish to remain employed measure the efforts of their email, print and multi-channel campaigns. Amateur marketers wing it or use the wrong metrics in an effort to make the right decisions.
Visit any social media or integrated marketing agency lunchroom and you’ll hear the words click-through, long-term bounce rates, subject line pull, open rate and conversions being passed around like salt.
Walk into a top 50 mailer and you’ll hear teams talking about churn, expense-to-revenue ratio, repurchase rate and lead-to-sale conversion.
The best marketers select clear, concrete goals for their campaign and then choose the metrics that tie directly to these goals and set tracking mechanisms in place.
Direct Mail Campaign Metric Rights and Wrongs
The problem with only focusing on response rate as a metric is that it doesn’t tell you much about campaign effectiveness, according to Ruth Stevens of the Lenskold Group. There are simply too many variables involved: the list, the offer, and the creative.
Stevens suggests focusing on a more useful metric, like cost per lead.
Metrics for B-to-B Direct Marketers
|Lead Generation||Direct Sales, E-commerce, Mail Order||Retention Marketing|
|Response rate||Response rate||Repurchase rate|
|Cost per lead||Cost per order||Lifetime value|
|Inquiry-to-lead conversion rate||Average order size||Churn|
|Lead-to-sales conversion rate||ROI|
|Expense-to-revenue ratio (E:R)|
Beware of Vanity Metrics
Vanity metrics sounds good but mean little. They are slung around in client meetings like Stoli in a Mad Men scene but they are more intoxicating than business sustaining. Vanity metrics, including:
- How many names on the email list?
- How many likes on Facebook?
- How many followers on Twitter?
It doesn’t matter if you purchased an 80-million name email list for $800 if 80% of those names haven’t looked at an email in the past year or only 5% of the contacts match your Ideal Customer Profile. The metrics that might matter more across the sales pipeline, according to Hugh MacFarlane, author of The Leaky Funnel, are:
- Sales qualified leads
- First meetings
- Closed Deals
Proxy Metrics Can Help if Agreed Upon Upfront
What is a proxy metric? It is a metric used to “stand in” for a direct measure, when direct measurement is not possible. For example if a PR or marketing company places a story in the New York Times and in the Waste Management trade journal, The New York Times carries more influence and clout for the client and his product than does a trade journal because of reach, readership, credibility, etc. Therefore the agency can plug in an arbitrary number in its client reporting valuing this placement as compared to an easier to obtain trade journal placement with less customer focused impact.
In a B-to-B environment the revenue pay-off can take many months or even years. Proxy metrics come in handy to assess campaign productivity before the sales cycle has ended.
Robert Reneau of National Semiconductor assigns dollar value to each interim campaign outcome, long before the activity has resulted in a sale. When a customer downloads a piece of collateral, for example, they credit the campaign with $1,000. A product sample request? That’s $5,000. A lead entered into the sales force automation system earns $50,000. Though these numbers seem arbitrary, over time they have helped National correlate actual sales results.