Defining KPIs Pivotal to Measuring Business Performance and Growth

THE WEALTH OF DATA MARKETERS HAVE ACCESS TO IS RAPIDLY INCREASING IN TODAY’S DIGITAL-DRIVEN MARKETING ENVIRONMENT.

But rather than making it easier to set the key performance indicators (KPIs) that will drive growth and revenue-attainment goals, business leaders are having more trouble developing and achieving the right KPIs, according to an MIT Sloan/Google report.

Executives are often torn between different approaches to goal setting. Should KPIs be strategic or tactical? Operational or financial? Broad or focused?

As a result, most organizations are actually KPI underachievers.

Underachievement doesn’t have to be part of the equation, however. By asking the right questions, business leaders can develop accurate, realistic and suitably ambitious goals and KPIs that will be used to build highly successful marketing+tech initiatives.

During the goal-setting process, it’s important to consider a few factors that will help your organization not just set KPIs – but identify the right ones that will ultimately have the greatest impact on a business’s top and bottom line.

SELECTING SOFT VS. HARD METRICS

Historically, many companies have focused their attention on the “high-level approach” or marketing goals such as awareness and perception that are difficult to measure.

There is no doubt that these are real metrics – and ones that are getting easier to define with today’s advanced marketing data, systems and tools.

But market leaders spend their time and attention focused on data-driven, or hard, KPIs. There are several reasons why, chief among them being that, soft metrics are hard to define and measure the impact of their contribution to specific results.

This not only makes it more difficult to justify marketing investments when company leadership is evaluating performance and budget allocations, but it also adds confusion among teams as to how they prioritize their work in alignment with more critical drivers of growth and revenue attainment.

It’s easy for soft metrics to become moving targets – people often have different ideas of what success means. This can lead to a poor allocation of marketing budget, personnel or to channels that deliver better results and have a greater impact.

Business leaders, as should agencies, embrace this data-driven emphasis on numbers, metrics and KPIs as it provides tangible evidence of success.

Our process of defining business objectives and the right, hard KPIs starts at the very outset of the Discovery process. During this process, we undertake a comprehensive, 360-degree review of a client’s current business performance, including areas such as acquisition, operations, organization, processes and automation, customer experience and delivery. We are then able to deep dive into our clients’ businesses, evaluating performance to uncover, identify and optimize areas ripe for improvement.

And before actually implementing multi-faceted marketing campaigns or resources, we want to ensure that clients have the ability to measure their business performance against previous baselines.

We also want to address inhibitors to scaling the business so there is zero drag in performance. So when marketing+tech programs are turned on, businesses can measure the impact of our marketing+tech roadmap and compare year over year, quarter-to-quarter, or even day-to-day.

Having the necessary systems, tools and analytics to measure performance is critical to ensuring our programs are achieving their stated goals and your businesses’ KPIs over time.

Without hard metrics, marketing+tech organizations will find it difficult to substantiate their reason for being.

THE DIFFERENCE IN SETTING B2B VS. B2C KPIS

The high-level goals of B2B and B2C companies may largely be the same – increase sales, deliver a superior customer experience, etc. – but the granular KPIs are often dissimilar. B2C and B2B buyers have major differences in behavior, including:

• Emotion vs. logic: Consumers are usually guided by emotion and are more likely to make impulse decisions. B2B companies are risk-averse and make calculated decisions based on reason.
• One vs. many: B2C companies generally target individual consumers, while B2B marketing is more complex and involves buy-in from multiple stakeholders.
• Quick vs. long sales cycle: Consumers often make immediate, one-time decisions while businesses have a slower decision-making process, sometimes over a year or more.

The different behaviors of your customers must inform your KPIs. A B2C company may develop KPIs focused on ensuring frictionless transactions – lest an impulse buyer quickly loses interest. B2B marketing is often more difficult to measure because of the longer sales cycle and complex decision-making process, so it’s beneficial to set KPIs using leading indicators that come before the final sale, such as e-mail conversions that lead to in-person demos.

While there are many differences between B2C and B2B marketing KPIs, one thing is the same: KPIs must be measurable via various attribution methods and systems that enable determining the source of the lead and scaling the business to support growth.

TRACKING KPIS TO YOUR CUSTOMER JOURNEY

Understanding a customer’s journey, and there can be a lot of factors, is key to marketing success today.

When you know how, when and why your customer interacts with your business, then you can create a customized marketing strategy that targets customers where they are with the contextual information they need at that point in their evaluation.

Your customer’s journey should also impact your goals and KPIs in order to maximize their effectiveness.

At Moving Minds, we work with clients to map out the customer journey and develop KPIs to measure each stage. For businesses with more complex customer journeys, this is a highly effective goal-setting strategy.

For instance, our team selected by a leading Florida-based biotech company to develop and implement a comprehensive digital marketing strategy designed to launch a newly available surgical technique to the consumer market. As part of our efforts to be discovered via different types of searches, we developed a foundation of educational content. The content was mapped to the patient journey, which included the process of being diagnosed, selecting a course of care, selecting a surgeon, and managing the recovery post-surgery.

In planning marketing initiatives, we identified five key stages of the customer journey:

1. Patient Awareness and Education

2. Patient Inquiry

3. Lead Qualification

4. Consultation with Surgeon

5. Schedule a Surgery

By breaking down the complex customer journey into five stages, we were able to develop relevant KPIs for each one. Moving Minds then measured each KPI throughout the implementation process and go-to-market launch, allowing us to understand what strategies and tactics were working and what needed to be adjusted to increase effectiveness.

Customer journey KPIs don’t have to just be confined to the acquisition phase either. We often help clients set and measure KPIs for the delivery or performance of their service/product as well as customer retention after delivery. By measuring acquisition, performance and retention KPIs, we gain a holistic view of the marketing and sales function and how buyers are interacting and responding to the brand at each stage of the journey.

KPIs are still relevant after you make them

Setting the right KPIs is pivotal to success. But it doesn’t matter what your KPIs are if you create them, put them in a drawer, and don’t revisit them until the next planning phase. KPIs aren’t something you glance at once or twice a year. If you aren’t checking in with your metrics regularly, then they don’t matter.

KPIs that are owned, useful and generate action are the most important ones. By building a comprehensive strategy that incorporates the right KPIs, knowing which ones you need to measure, and having the proper systems, analytics and reporting tools in place, your company will have mastered the use of both soft and hard business KPIs and metrics.

The original version of this page was published at:  https://www.movingminds.io/marketing-tech-news-and-insights-blog/defining-kpis-pivotal-to-measuring-business-performance-and-growth