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How To Avoid Analysis Paralysis (INBOUND 18 Session)

Amanda Nielsen shared the framework that New Breed Marketing uses to choose the correct marketing metrics for their clients.

Kevin Kononenko on September 13, 2018 • 4 minute read

10 years ago, digital marketers were deprived of useful data.

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.

New Breed’s 3-Step KPI Framework

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.

Choosing Your KPIs

KPIs should answer the question, “Which actions will bring a user closer to being a paying customer?”

This could be:

  1. A free trial
  2. Booking a demo
  3. Requesting pricing info
  4. Requesting a consultation

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

Choosing Your LPIs

What’s an action that your prospects might take immediately before doing the key action that the KPI measures? Some common options are:

  • A middle-of-funnel conversion
  • Viewing content that reflects evaluation and consideration
  • Viewing a case study, webinar or pricing page

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.

Choosing Your TPIs

These are the steps before the LPI actions. They might include:

  • Open rate
  • Social Engagements
  • Page Views
  • Page Depth

These metrics help you understand “digital body language.”

 

Identifying Revenue Goals for the Marketing Team

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:

  1. Customer
  2. Opportunity
  3. SQL
  4. MQL
  5. Leads
  6. Visits

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.

How New Breed Conquered Analysis Paralysis

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:

  • The close rate was low
  • The sales cycle was long
  • The churn rate was high

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.

About The Speaker

Amanda Nielsen is a demand generation marketer at New Breed, a diamond-tier HubSpot partner offering full-funnel marketing solutions to the B2B and SaaS space. She drives growth for New Breed by leveraging inbound content creation, lifecycle marketing, and multi-channel inbound marketing campaigns to attract visitors and convert them into leads.
About the author
Kevin Kononenko Growth Marketer @ Databox. Making it easy for marketers to tell the story of their success. Everton FC supporter. Startup guy.
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