How do you measure your marketing team’s success? Oh boy, here we go again – more about measurement and analytics? But hold on just a moment. This isn’t about what analytics should be in our dashboard – or how to wring some more efficiency out of our analytics tools.
When we discuss the role of the CMO and her goals in the organization, we often talk about tackling the larger issues. In fact Mark Snyder, K-Mart’s CMO just published an article on iMedia Connection last week encouraging CMO’s to “see the larger picture” and “chase the antelope not the chipmunks”.
But when we measure the performance of our agency or members of our team – we immediately want to assign numerical metrics. We tell our PPC consultant that he will be measured on the number of “conversions”. We tell our Web team that they’re measured on Traffic growth. We instruct our media buyers that they’re measured on CTR (click-through-rates). And assigning a way to “win” only gives our team the motivation to play the game.
For example, when I was in one of my first jobs in consulting, my performance was measured solely on what the utilization rate was on my team. The number was basically meant to measure how “billable” each team member was. But, something I wasn’t measured on at all was outsourced costs. So, for large projects I would simply assemble my internal team for the roles I knew would be fully utilized, and I would outsource the rest to other freelance consultants. I maintained an extraordinarily high utilization rate, but certainly didn’t maximize the total revenue margin on the project by utilizing internal employees.
By assigning any particular numerical measurement to a team member, you’re immediately encouraging that person to modify his behavior to maximize that measurement. And many times this is done to the detriment of the overall business goals.
Frequent Inefficient Flyer
You can see this play out in many different ways. For example, how often have you flown a sub-optimal route in order to “get the miles”? Or, ask yourself what important lessons have we learned from measuring CEO’s on stock price alone?
Measuring on single, or even dashboard metrics can have a similar effect. Your team comes to work each day and focuses hard on increasing that one metric. They will meet with you and lobby you to make changes to fix their metric. They will change the creative, assign new people or make other compromises that keep that metric going up.
I recently met with a Director of Marketing at a venture funded startup where the only metric that mattered to the VP of Marketing was traffic to the Web site. No matter how much the marketing Director tried to convince the VP that this was an irrelevant metric, he only cared about that one number. So, the Director gamed the system – and bought traffic. He spent wildly for it. He bought thousands of keywords on search, created email campaigns, bought lists and ultimately increased the cost-per-visitor by about 1,000%. And, all along the way, he was bonused accordingly for beating his traffic numbers. Ultimately, he worked both himself and the VP out of a job when the CFO finally called both the VP and the Director to task for increasing budget, while not increasing sales even one little bit.
Now, your situation is almost certainly not as dramatic as that. But if your team is being scrutinized over a single or set of metrics – the temptation to do *anything* to get that number up is great; even if it means doing something that may ultimately come back to bite you.
We have to change the rules
Instead of measuring our team or our agency on strictly numerical metrics that are directly associated with their tasks – why don’t we also apply some more creative types of numbers to our teams:
- What if one of the measurements for our Ad Agency is the number of customers we can successfully upsell? This means that the Ad Agency is not only focused on getting a customer – but one that will continue to buy from us?
- What if we measured our PPC team on engagement metrics. This means that our PPC team isn’t focused on CTR’s for single visitors, but rather attracting a high number of people who will engage with our content multiple times. Analytics thought leader Avinash Kaushik has interesting models for this.
- What if we create a “disruption metric” and give that to everyone as a goal. Here we might create innovation goals; rewards and recognition for trying “out-of-the-box” experiments or new things and developing new strategies from them.
Now, I’m the first to admit that these aren’t easy. And, certainly most of these will be unique to your organization. But that’s the point really isn’t it? Finding new ways to measure our success shouldn’t only be about hand picking new numbers from the tens of thousands of metrics and KPI’s we CAN measure. It’s about deriving new ways to balance the creativity and science of our marketing team to drive innovation.
Otherwise, we’re just driving down the road to incremental gains, mediocre results and evolutionary improvements in numbers.
And, frankly that’s a game that’s just not worth playing.
Photo Credit: erikadotnet