Are benchmarks for losers?
Oct14

Are benchmarks for losers?

In baseball, there is an old adage that “stats are for losers”. This refers to the fact that fans often resort to talking about the stats of their favorite team or players when they are losing. In pro sports, winning is what matters – all else is background noise. 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: 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. Mediocrity – Benchmarks are often stated as industry averages. Sorry, but I am not interested in being average. 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? 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. 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...

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How many KPIs do I need?

It always starts off with a simple request for KPIs or key performance indicators.   The challenge I often see is cutting through the noise and actually getting to the metrics that are truly “key”.  So what makes a KPI?  Here is my list: It is connected to your strategic or tactical goals It is unique (i.e. it is not strongly correlated or a subset of another KPI) It is diverse (think about a balanced scorecard of indicators) It can be calculated in a clear and consistent way (i.e. no debates about where the number comes from) Your team “buys-into” the number It has an owner who works toward improving it For an a small team, I generally like no more than KPIs (ideally 1-2).  If you feel the need for tracking every possible operating number, then create a separate spreadsheet filled with metrics.  You can always graduate (or demote) metrics if you identify trends that are connected with your successes or failures.  For a company or larger operating group, I like to keep the KPIs to under 20.  More than that and they are a list of metrics rather than key performance indicators.  In the end I prefer to make the difficult decisions about what numbers are truly important and track those.  The rest are just numbers about your business. So, how many KPIs are you...

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Five Meaningless Marketing Metrics

I have a CEO friend who uses the expression the “anxious parade of activity” to describe the way marketing people often present results to him.  I’m sure you have seen this before.  “First we did this tradeshow, then the agency made this pretty brochure, then we ran this ad in Magazine x….”  The entire thread is usually devoid of any connection to the impact these programs have on tangible business results. As 2009 budget season approaches, conversations inevitably shift to “what did we get for all the money we spent on marketing this year”.  These discussions can be much easier with the right marketing metrics in place.  I often find that the trouble with metrics is separating the meaningful from the meaningless.  OK, meaningless is probably too strong a word. For the sake of this post, let’s use the terms “activity-based” and “result-oriented”. I have created this list of five meaningless marketing metrics to illustrate the differences between the activity-based and result-oriented measures. Page views: Web traffic is a leading indicator but it is conversion that really matters.  Google Analytics makes it pretty simple to add conversion tracking to any website or blog so there is no excuse for not tracking web results. Leads: These are also a directional indicator. The challenge is that until you move them along the purchasing cycle this number doesn’t tell you much. Impressions: They are the fuel for our marketing machine but don’t give you any idea of how you are performing. Events attended: This also misses the point.  Did you have specific goals for the event like getting firm commitments from prospects to trial your product? Did your rainmaker sales guy close any big deals?  I was recently accused of being “anti-tradeshow”.  Over the last 10 years, I’ve seen a steep decline in the productivity of events. I reality, I am skeptical of programs that are difficult to measure or have weak ROI. Email open rate: I certainly want people to read my emails but it is more important to get them to take action.  Clickthroughs are a better measure and conversions are the best. This is certainly not an exhaustive list.  As always, I would welcome any...

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