Looking at customer impact metrics

Ask any marketing leader about their top priorities and the majority will say they are consistently trying to improve the efficiency and effectiveness of their marketing. They’re trying to get more done, with fewer people and increase the quality of engagements.? You only know if improvement has been made if you can measure the progress.??

What is marketing measurement? Simply put, it is the measurement and analysis of marketing initiatives, experiments, and delivery of customer value to improve the efficiency and effectiveness of marketing and ensure marketing, and the broader business is reaching their goals.???

For modern marketing organizations, marketing measurement is central to understanding the customer and improving how you deliver value to them. Modern marketing organizations are customer-centric organizations and rapid learners - both of which require their own set of marketing measurement to understand, diagnose, and improve the effectiveness of your marketing efforts and how you deliver value to your customer.?

Customer-centric Measurement. How well are you doing in the eyes of your customer? Most organizations understand the correlation between customer value and business value, so the ability to diagnose where value is being created and where value is eroding from the perspective of your customer is critical. If you want to be customer-centric you must measure how well the organization is delivering on the needs of your customers.??

Most organizations track some type of key performance indicator of loyalty or satisfaction which is important to understand overall health of your relationship with you customer.

Common measures are:?

1. Customer Satisfaction surveys (CSAT) measures customer satisfaction with a business, product, or interaction and provides insight across the journey to highlight points of satisfaction and frustration.??
2. Customer Lifetime Value - Customer lifetime value is the total worth to a business of a customer over the whole period of their relationship.??
3. Net Promoter Score (NPS) – measure of loyalty of the customer based off a simple question “how likely are you to recommend us” and are used by companies as a measure of the relationship – fielded quarterly or annually - or a measure of a transaction – fielded after a touchpoint or interaction.??
4. The Customer Effort Score (CES) measures how easy it is for a customer to do business with you. It is used frequently by customer service to understand issue resolution efforts but has application across the journey – how much effort is required by the customer to achieve their goal or accomplish their task? Websites who do exit surveys often include “what did you visit our website for today?” and “were you able to accomplish your goal?”??

These measurements alone are not enough. You need customer-centric measures across the entire customer lifecycle to understand how well you are doing in the eyes of your customer and to know where to focus your time and effort (e.g. where are your sources of dissatisfaction and where are you losing your prospects and customers). Customers have specific problems they are trying to solve, information sought, desired outcomes at each stage in their journey, and these expectations and outcomes can be measured.??

The Customer Effort Score (CES) is a first step in this direction and is an effective KPI if ease of doing business is a critical need of your customer, but you should be measuring the needs and expected outcomes of your customer. An HBR article introduced the idea of CPIs (Customer Performance Indicators, or KPIs for your customer based on their needs). The concept is to monitor and measure the aspects of your business that are important to you customer – for example, the article highlights an insurance company that tracks Payment Flexibility as a CPI, a key need of their customer. The company tracks how the number of and types of payment options they offer impact customer acquisition and retention KPIs. Remember, what your customer is trying to achieve and your own goals and objectives likely differ by persona and by stage in the journey so the KPIs and metrics you decide to monitor should be different as well.???

Rapid Learning Measurement. How are you improving the effectiveness of your marketing efforts? How are you better meeting the needs of your customers? Effectiveness or performance metrics are indicators that you are meeting customer needs. The better the performance, the more likely you are meeting the needs of your customer. This is why experimentation is so important: You can gain rapid insight into what drives performance and better meets your customer needs without risking too much in the short-term. However, to gain rapid learning, you need a solid measurement system??

What are the requirements for effective measurement of Experiments???

1. Measures should be specific, quantifiable, and achievable: You need to have a clear definition of what you will measure, how it will be measured, what data sources will be used, and ensure that you can track the metric with reliability.??
2. Select KPIs and metrics that will enable you to prove out your hypothesis: The performance metrics selected will depend on the experiment you are running and what you are seeking to prove or disprove.??
3. Meet validity criteria (enough data, accurate data, etc.): To have any confidence in the results, you not only need enough data to make the results significant but also should ensure the data is accurate and reliable as the validity of inferences you can draw from an experiment depends on the validity of the measures used.?
4. Measure with frequency: You can’t go with speed without measuring early and often. Looking at the data with frequency is a good habit to get into. Having a regular meeting to review results of your experiments and discuss the implications gets the whole team in the habit of understanding the data and determining the implications.??
5. Be ok with failure: Experimentation is cultural, and teams will only be comfortable with experimentation if the organizations make failure ok. Experiments succeed and experiments fail and organizations need to be ok with both.?

Building a Marketing Measurement Strategy. Organizations should have a marketing measurement strategy – a framework that takes your marketing goals and objectives and supports them with a measurement plan. These goals should be looked at from both the business perspective and the customer perspective – what does the business need to achieve with respect to this customer group and how will we measure success, but also what does the customer need and how well are we delivering on it????

?A marketing measurement framework includes the following:?

1. Clear marketing objectives and a definition of success - how you will know when you have met those objectives.??
2. Defined key performance indicators – measurable benchmarks that will help you monitor progress towards your goal. ?
3. Supporting metrics – leading indicators of that KPI, usually tied to a specific tactic or experiment, and is a measure of performance of different marketing efforts.??

Getting a full view of the customer journey.?The holy grail of measurement is being able to put together the myriad of data sources and information into a complete view of your customers and their journey. As technology advances in this area to help integrate disparate sources of data into a single view, many organizations still struggle to be able to build a complete picture. Let’s face it – it’s hard to span the organization and data siloes to get the cross-functional picture from a data perspective. It’s also hard to find the technical talent and analytics capabilities required to turn your data into insights that you can action on. Breaking down some of these organizational barriers and getting cross-functional support can supply marketing with both the capabilities and the insight into marketing effectiveness – not to mention organizational accountability that spans the customer journey.??

Modern marketing organizations have invested heavily in their data capabilities – both in terms of people and skill set, and the underlying infrastructure to support analytics, insights, and rapid learning. They are building cultures that prioritize customer insight, test and learn, and deliver on customer needs as a way of working. They recognize and understand that you don’t wait for the perfect. Use what you have, understand what you don’t have but need, and build the roadmap to close those gaps – both internally to help you better understand your customer and your performance, and externally to better meet your customers’ needs.??