Is the variety of marketing attribution tools confusing you? Find the best pick for your company from this expert list of marketing attribution tools.
Marketing | Aug 11
Kevin Kononenko on September 13, 2018 • 4 minute read
Unlike today, there was no suite of tools that allowed them to track every visit on their site, and how their efforts translated towards sales.
But today, marketers are drowning in data! And, since any individual metric COULD later lead to success… marketers tend to just track everything.
This leads to “analysis paralysis” It’s when you have so much data that you break a sweat when you look at your reporting and you don’t know where to start.
For example, the top result for the query “most important marketing metrics” will give you a post with 70+ suggestions. That doesn’t make it any easier!
It’s easy to see a correlation between two metrics and think that one caused the success of the other. For example, in one month, your company might have a great email open rate and also generate an above-average amount of revenue. That doesn’t mean that the open rate led to the revenue, though.
At the same time, you need to select metrics to measure multiple parts of your funnel (or your flywheel, depending on the methodology). You can’t simply focus on leads and sales, for example.
New Breed developed a three-tier system to use in their own marketing as well as with clients. It includes KPIs, LPIs, and TPIs
KPIs are Key Performance Indicators
LPIs are Leading Performance Indicators
TPIs are Tactical Performance Indicators.
New Breed recommends that you select KPIs first, since those are the ones that should be most directly related to revenue.
KPIs should answer the question, “Which actions will bring a user closer to being a paying customer?”
This could be:
Those covered all sorts of industries and products/services. They don’t give you any insight into the rest of your funnel, but they do help you decide the next set of indicators
What’s an action that your prospects might take immediately before doing the key action that the KPI measures? Some common options are:
These show some intent. But still, you need one more set of metrics to measure your success around acquiring visitors and helping them have a successful experience on your site.
These are the steps before the LPI actions. They might include:
These metrics help you understand “digital body language.”
Finally, Amanda gave an example of how to make all of these metrics work together. Let’s say that your boss came to you and asked you to triple your marketing ROI for the following year. Here’s how you would need to calculate your contribution.
First, find the burdened marketing cost. That’s the total cost of all your team’s employees. Then add in marketing expense, or your annual marketing budget.
Then, you need to multiply that by 400% to get to a 3x ROI.
Let’s assume that you will need 50 customers to achieve that level of growth.
From there, you can use industry benchmarks to find common conversion rates along these steps of the funnel:
You can use industry benchmarks to calculate backwards from that 50 customer number to determine the size of each stage of the funnel.
Then, find your company’s ACTUAL conversion rates from the past 24 months. You will be able to tell if any step of the funnel needs attention by comparing it to the industry benchmarks.
New Breed was using all of these principles, yet they were still missing their revenue goals every month.
They felt good about their KPIs, LPIs and TPIs. They had realistic goals. And they were retaining customers at an acceptable rate.
So, the segmented their “closed won” deals by persona, and dug into the data for each one. They found one particular persona where:
They decided to stop selling to that persona, and they began hitting their numbers with the increased attention on the other 3 personas!
The moral of the story: The framework will give you structure, but you still need to use your marketing expertise to investigate when problems pop up.
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