Chapter 9: Understanding Value (and Misunderstanding It)
In this blog series about noise in your marketing, I've made plenty of references to metrics as a way of measuring and clarifying performance. The use of metric tools is vital to clearing up ambiguity and eliminating a lot of noise and confusion about your marketing activities. However, there is another aspect about using metrics that can cause just as much noise: understanding value and using Key Performance Indicators to do so.
A Key Performance Indicator (KPI) is a quantification or measured value that indicates how well a company is achieving a key business objective. While there are many important metrics that lead to them, KPIs are the most important metrics in your sales and marketing. So, using KPIs to benchmark and evaluate progress is the best practice in evaluating your company's marketing and sales efforts. If you don't focus on what is most important, then you are focusing on what is not as important. And, on that level, with all the possible ways to reach prospective patients and an interested audience online, focusing on what is less important can mean you chase rabbits all over the place ... a lot of rabbits.
It's not like the old days of the Internet when search engines, online ads and domain name recognition accounted for the vast majority of website traffic. With so many social media sites leading people to websites, content campaigns, videos, landing pages and more, there are countless permutations on a prospective patient's path from finding you to calling you. In our digital world, you can track the paths from each source in numerous ways that yield varying details. So, how do you manage all of this as a business owner? The answer is KPIs.
KPIs offer important focus. In a discussion about results in metrics, I always ask the same question: "What's important to you?" It's usually the same answer: they want to make more money, they want more new business calling and making contact. Great! That means we need strategies that do the following: increase website traffic, ensure the website performance is converting the traffic to calls and contacts, increase calls and improve call conversion. At the highest level, those are your KPIs.
Some clients are satisfied right there. By using those basic four metrics, they employ strategies that flow traffic down through that series of KPIs. These clients use high-level reports on Google Analytics and recorded call tracking to make sure focus is on growth and productivity on those Key Performance Indicators. Their purchase of a marketing service stimulates that flow-through with a new audience. That audience may come from a paid campaign, a content-driven campaign, a social media campaign or one of many more marketing strategies. At the end of the day they are focused on what is important: their KPIs.
Google Analytics allows for a more sophisticated series of metrics for conversions. It is possible to dig down into the KPIs of a specific marketing program related to your website using this level of analytics. It also is possible to dig into the fine details of a Facebook marketing program using Facebook Insights. This level of analysis is what you trust your marketing company to manage to effect better results on an overall KPI. If it is set up properly, this information is available to you in a very transparent way. That is not where the damaging noise can enter the equation. That noise enters when you begin to base decisions on the wrong KPIs.
It's a little like micro-managing, and we all know how that works. Here is an obstacle some clients need to overcome. They would like to see a straight line drawn between where they are spending and the phone ringing with a new patient or customer. Who wouldn't like that? However, that is a fantasy unless you are only doing one strategy, and that is all you have ever done. We can measure a click. We can measure a call. We can track a path of behavior on your website. All of those actions and more are isolated incidents. They do not measure the cumulative effort of everything you have done to influence that prospective patient along the way.
The micro-conversions from various strategies that contribute to people's decision-making are vital to moving audiences forward. Your marketing company is your expert in evaluating and working to grow all the possible means of conversion in a strategy. Some people only see a strategy once. Some click through and come back later. Some click and never come back. Some click and bookmark your site. Some do all of the above, wait months until they are ready and then call the tracking number on your TV ad. Those are the ones who may tell you they never saw you anywhere else, yet they did on Facebook ads they do not remember. This is where we encounter the chaos of human behavior. So how do you make sense out of all this?
You buy strategies that affect your KPIs. You let your marketing company develop and work strategies that result in improvements in your KPIs. You do your best to understand the inner workings of the strategy, and you dig into the analytics as much as you like while keeping your eye on what is important: more traffic, more calls and contacts, more money, and, of course, KPIs!
One of my favorite phrases to use when a client is not using KPIs for evaluation is, "Dpn't throw the baby out with the bathwater." I can't tell you how many times clients have thrown out productive strategies because they weren't watching important KPIs. This is one of the places we introduce noise to our organizations. In my experience, if you identify and focus on KPIs, you have major advantages as a business owner.
Are you ready to work in an environment where your marketing is on point and effective and you are tuned in to your KPIs? Dog Star Media can help. Please contact me at email@example.com for more information.