Most recently I was discussing effective metrics and the role of benchmarks with a friend when it was then it dawned on me that one could reasonably argue that, like in baseball, “benchmarks are for losers”.

Don’t get me wrong. I am a numbers geek and love meticulously calculated points of reference. They are very useful as a sanity check to make sure you are in the right zip code when launching a new marketing program or trying something completely different.

My main complaints with benchmarks are as follows:

1. Specificity – In the B2B technology marketing, many benchmarks are aggregated across wide range of categories and in the end I can never seem to get that elusive number for my specific market segment or market leading competitor.
2. Mediocrity – Benchmarks are often stated as industry averages. Sorry, but I am not interested in being average.
3. Local optimization – Great, your PPC clickthrough rate is between your industry benchmark of 1-2%. Your part of the world is “meeting expectations”. So what. That number is directionally interesting but your CEO wants to know what revenue and pipeline you are driving. How are you contributing to the overall results of the business?
4. Laziness – Calculating marketing influenced revenue and pipeline is a hassle. It often requires some CRM alchemy and (gasp) assumptions about attribution. Worse yet, enterprise CRM systems make it virtually impossible for the average marketer to scrape, match and join the tables to connect leads to revenue. Those who can make this work have a huge advantage and can avoid the benchmark-based metrics trap.
5. Expectations – Winners look to set the standard of performance rather than measure themselves against the average. The choice is yours – you can use benchmarks to measure yourself against average performers or you can strive to set the standard. In my opinion, comparing yourself to benchmarks will never make you a winner. Only continuous improvement and pushing programs beyond worn performance assumptions will.

Winners disregard old assumptions about the way things are done and try new things to reach new performance levels. Unless you have firm comparables from industry leaders then you are likely comparing yourself to the middling your market and are destined to be average at best. I’ve ranted about ruthlessness before and without true results-driven metrics and benchmarks how can we truly hold people accountable and make the hard decisions about where to spend our increasingly scarce marketing dollars?

How are you avoiding the benchmarking trap?

1. Assign roles – The key stakeholders are the “scrum master” (the person who runs the daily scrum meetings), “program owner” (clearly articulates the goals for the project), “chickens” (people involved in the project from an informational standpoint), and “pigs” (the people who will do the heavy lifting for the project).

2. Decide on the duration and frequency of the sprints – In the world of agile project management, the idea is to break the work into smaller digestible chunks (ie sprints) and meet frequently to discuss progress on the specific tasks.  I prefer two to three week sprints.  In a perfect world we would have short scrum meetings daily but most of my agile marketing projects have meetings every other day.  The scrum frequency depends on the work velocity.

3. Set goals for first sprint – The first one is the most difficult.  I suggest first convening a “sprint planning meeting”.   Before starting the sprint, we discuss the theme, review tasks and estimate time requirements.  We’ll then put these tasks on post-it notes on a dedicated wall.  I prefer Post-its to note cards to avoid the need for pushpins.  Finally, we segregate the Post-its into the current sprint (what we will work on for the next two weeks) vs. the sprint backlog (what will come in later sprints).  If there is time, we’ll also discuss who will handle specific tasks.

4. Sprint meetings – I put the scrum meetings in the calendar for all the stakeholders except the “chickens”.  I’ll send the birds an email letting them know about the meetings and welcoming them to join us.  My logic is that this is an open meeting but only the people with real tasks responsibilities are required to attend.

5. Discuss, discuss, and discuss again – We basically run through the Post it notes on the wall and sort them into “in process” tasks vs. the “spring backlog”.  We then close the meeting by asking the “pigs” “what have you completed”, “what are you working on next” and “what are the risks”.  The goal is to quickly identify risks.  These meetings should be short (under 20 mins) so there is nothing wrong with taking issues offline to keep things moving.

6. Move the Post-its – When tasks are completed, move the cards to the done column.

7. Sprint planning (again) – As you approach the end of the sprint, it is time to think about the next one.  This meeting will review the last sprint’s results and look at what is next.

It is sort of like the instructions on the shampoo bottle … lather, rinse, repeat as needed…

I hope this is helpful.  Please let me know if you have anything to add.  I am by no means a scrum or agile expert and would value people’s suggestions on ways to improve this process.

• Most of the mass media and “push” techniques just aren’t as effective as they used to be a decade or two ago.
• People don’t like to be harassed by telemarketers.
• Shoppers are increasingly using the Web (including blogs and social media) to learn about your product or service.
• Prospects who engage with your business online are typically further along the purchasing process and are more likely to buy.

These are all things that most of us have discovered empirically.

In my opinion, the real challenge is figuring out if you can get enough from your online channels to fill the funnel and support your sales goals.  In many markets, a large percentage of people still use “old media” to learn about things.  For example, while over 10 million people still watch the nightly network news shows in the US, the more popular online TV shows have at best thousands of viewers.  I know, I know we can talk about audience targeting and specificity but differential is meaningful.

While all trends are toward online media, most of us will exhaust our productive online opportunities and will need some “old media”push in our marketing mix.  To use an expression popular in the state of Maine, “you can’t get there from here.” We have businesses to run and sometimes we still need the sheer mass of eyeballs you can only get from “old media”.

I know that change is upon us as print media and radio suffer through their painful corrections but they still have big, relevant audiences that we need to keep that in mind.  These channels are also not going away anytime soon.  My suggestion is to watch the numbers and be ruthless as you make media decisions understanding that most businesses need more than just online marketing (even if the customer acquisition costs are much higher offline).  At the end of the day, results matter more than channels.

How much are you moving to online media?  Can you reach your goals this year with online alone?

They have an interesting approach to using video as a B2B lead generation tool.

You ask for goals and metrics before a project starts

Did I mention I am hosting a new webinar and podcast series for the Skeptical CMO
?

Did I miss any others?

I had decided that paid search was the right answer for my business.  Many of my competitors were buying keywords and there was plenty of traffic in the space.  The popular terms were bid up to the $2-3 dollar price range and based on my conversion assumptions, I thought I could get the customer acquisition cost tuned to the point where we would have a strongly positive ROI.

After about six weeks of adjusting bids, killing off bad ad creative, inserting new ads, and reorganizing ad groups, BINGO, the cost per customer landed within about 5% of my target.  Needless to say, I felt pretty good and was thinking it was time to “pour some gasoline on the fire” by making a big budget request.   It seemed like a sensible thing to do given the acquisition cost and conversions rate.

Before making the “big ask” for budget I decided to take one more look at the numbers.  I wanted to make sure these new sign ups would become productive long term customers.  My back-of-the-envelope estimates prior to the campaign had assumptions for the average revenue per customer.  The real data, however, showed that these customers yielded 75% less revenue than our “typical” customers, pushing this campaign into the red.  I was relieved to discover this before dropping  a large sum of money into this medium.

The moral of the story: make sure you are measuring the right things and they are connected to real results. In most businesses, activity-based measures like leads or traffic are directional indicators.  In the end, revenue and sales are what really matter.

So, what are you doing to connect your marketing activity to bottom line results?

Here are some questions to assess how accountable you are as a marketer.

• Do you do everything you can to track the results of a program (ie coded URLs, special offers, etc)?
• Do you freely admit when a program was a complete bust even if all the data is not in?
• Do you create a back of the envelope estimate for the campaign before you start with the creative?
• Have you sensitivity tested your campaign assumptions based on past program results?
• Do you ruthlessly remove the worst performing programs from your budget each year?
• Are you always looking for something that can outperform your tried and true programs?
• Is your CFO an ally?
• Does your CEO offer you more budget if you can find positive ROI programs?
• Do you favor effective over creative?
• Do you have a bias toward measurable programs?

Did I miss any others? Let me know.

Here some interesting articles I’ve compiled while I try to assess the effectiveness of this campaign and my future with social media advertising.

Ad Gurus Find The ‘Real Value’ Of Online Advertising Remains Elusive

What’s the future for social network ads?

Reach versus Engagement, part II (full post)

Quick Case Study on Facebook Advertising

The Facebook Ad Experiment — 5 Recommendations for a Successful Campaign

Facebook Ads: Ineffective or Fraud?

Social Network Advertising Must Change for Brands

Results From My Facebook Ad Campaign

As you can see, the jury is still out for social media ads and only more testing will help us discover the truth.

Have you read any good articles?

I’ve been dabbling with paid search on one of the major social networks.  The interesting thing is that we decided to press forward despite the fact that our “back of the envelope” calculations using an optimistic lifetime value estimate projected that this campaign will end up underwater.

I frequently rant about the value of running the numbers first but in this case we decided to “do it for strategic reasons”.  More specifically, this campaign had high option value.   In a situation like this, a simple ROI calculation may not be enough.  Conventional projects with predictable outcomes can use straightforward estimates.  When venturing into the unknown where the risks are greater and the future is uncertain, people often use real options as a way to capture the potential value of an opportunity.

So in this case, paid social search is a good fit for thinking about option value.  Despite a lousy initial estimate, there is great potential in the medium.  If this works, it could open up a big, new promotional channel.  It could also be a bust.  We’ll never know unless we try it.

So can you think of any high risk projects that have a small chance of a exponential return?