In the marketing world, key performance indicators (KPIs) have the ability to tell you, objectively, how your campaigns are performing. But it’s not always easy to read these KPIs accurately, and even then, it’s possible to misinterpret them and form flawed conclusions.
Better understanding these potential mistakes can help you avoid them – and bring more objective, analytical reasoning to your marketing efforts.
The Basics of Marketing KPIs
Source: mpug.com
Measuring KPIs is usually done throughout your campaigns and at the end of each campaign, so you can accurately gauge how well each campaign is performing/has performed. Each number you view and analyze can help you with:
- Justification. Imagine you just spent $10,000 on a national advertising campaign. That’s an investment, right? Hypothetically, this $10,000 investment should be able to return much more than $10,000 of value to your brand, but are you able to prove it? Measuring your results and tying them to objective performance indicators can help you justify your actions. Whether you’re vying for a promotion in your marketing department where you’re trying to prove the value of a campaign to a marketing agency client, numbers are indispensable.
- Cost savings. Closer readings of KPIs can also help you save money in the long run. With a thorough analysis, you can easily figure out which of your strategies are most and least effective; if a $1,000 advertising campaign generates more sales than a $10,000 one, you can radically shift your budget and ultimately get more “bang for your buck.”
- Ideas and direction. When you better understand how your campaigns are working, you can generate better ideas and a better overall direction for your campaigns. For example, you might find that your customers passionately respond to a specific topic in your content marketing and email marketing campaigns; with a bit of further study, you can figure out exactly why this topic resonates so strongly with them and then better incorporate that topic into more areas of your marketing and advertising strategy. Similarly, you can pinpoint tactics and approaches that don’t work and weed them out, so you don’t waste any more time or money on them.
What Most Companies Get Wrong About Marketing KPIs
Source: salesforce.com
Unfortunately, most companies approach marketing KPIs in a flawed or misguided way.
These are some of the most important lessons to learn here:
- KPIs can’t tell you everything. First, understand that KPIs can’t tell you everything. In the realm of statistics, experts separate data into quantitative and qualitative varieties. Quantitative data, which can easily be quantified with numbers, is easy to measure and analyze, but it takes qualitative data to tell you more subjective information. KPIs might be able to tell you whether people are responding to your advertising positively, but you’re going to need more qualitative data to better understand why people are or are not responding positively. It’s important to understand that these performance indicators are just one piece of the overall puzzle.
- Confirmation bias can distort your perceptions. Many marketers unwittingly neglect the role that confirmation bias plays when analyzing data. Confirmation bias is a natural human bias that makes us overvalue information that already agrees with our existing assumptions and conclusions; it also makes us undervalue information that contradicts those assumptions and conclusions. Confirmation bias is especially nefarious when measuring KPIs, because if you already believe your campaign is working well, you may selectively choose KPIs that justify that narrative. Work against this by seeking out information that contradicts your initial assumptions.
- You can’t compare apples and oranges. You technically can compare apples and oranges, given they’re both round fruits, but when it comes to KPIs, it’s important to compare “apples to apples” by filtering out variables that could interfere with your analysis. For example, it’s unwise to compare the impressions of one advertising campaign to the click-throughs of another advertising campaign; these stats are not directly comparable.
- The low-hanging fruit may not be good enough. Some marketing KPIs are easy to measure and understand at a glance, but you’ll need to dig deeper if you want to form better conclusions. Relying on only the low-hanging fruit of your data analytics strategy is going to lead you to inaccurate conclusions.
- Your KPIs aren’t the same as a competitors’ KPIs. Companies in the same industry typically have much in common, but you can’t simply copy and paste a competitor’s approach to measuring marketing KPIs. Your strategy needs to be unique to your brand.
- KPIs should be dynamic and evolving. In line with this, your KPIs and marketing data analytics strategy should be dynamic and evolving. Don’t simply follow the same approach ad infinitum.
- KPI insights need to be actionable. For any data to be valuable, it must be actionable. It’s not enough to know that your marketing campaign is working; what are you going to do with that information? Whenever possible, translate your findings into specific actions that your company can take.
Source: intellidash.net
You don’t need to be a perfect data analyst to get value out of measuring and analyzing KPIs in your marketing campaign. But you do need to be familiar with the fundamentals, and you should be prepared to challenge your assumptions and expectations.
If you can clear up the most common misconceptions and mistakes related to marketing KPIs, you can analyze your data more objectively and ultimately produce better results.
