Why just having a customer performance metric is not enough. Every…
We have the technology! How Google’s analytics tools can be used to demonstrate the effectiveness of your marketing campaigns
One of the biggest takeaways from our recent ‘State of Financial Marketing 2016’ survey was that Marketing functions aren’t doing a good enough job of demonstrating their value.
In response to the question ‘Do you feel that marketing is seen as a cost within the business’, 65% of the financial services marketers who replied said that they felt that the marketing function was viewed as a cost. There are two reasons that this could be:
- Their business may still not understand the contribution of marketing to the bottom line. Sales-led businesses often view the ‘last touch’ of a sales team as the truly valuable sales-driver. This is a legacy of past attitudes, where marketing had more of a focus on brand building, than direct, measurable response.
- The second, related, reason is that marketers don’t currently have the tools, or the knowledge on how to use the tools they possess, to demonstrate their contribution.
In this blog we look at how financial services marketers can use the free tools available to measure the effectiveness of their campaigns, demonstrate their contribution to the bottom line and prove their value to the business.
We get it. Complex, multi-stage sales cycles, or even the absence of a direct sales channel, can make measuring the ROI of a campaign extremely difficult. A customer moving between online and offline and transaction through a third party can make it hard to track a marketing lead through to a sale.
But, in response to the survey question ‘What are your barriers to measuring marketing ROI?’, a higher proportion of respondents (75% ) actually answered ‘inadequate analytics / understanding of digital measurement’, while a complex sales cycle was cited by just 64% of respondents as a barrier.
In 2016, with the proliferation of data, this should no longer be an issue for marketers. Free, or low cost, tools are available for each stage of the sales funnel, allowing metrics to be applied to your customer journey.
Marketers should be focused on measuring all activity to demonstrate its effectiveness, optimise activity and demonstrate its contribution to the business to show that they are a value-generator and not a cost.
You have the tools. And they’re free.
With the huge proportion of both brand and demand generation campaigns now being primarily digital, tracking the performance of a campaign is easier than it has ever been before.
Since its introduction in 2005, Google has continually improved their free Analytics product, adding features to allow marketers to track and measure ever-more-granular aspects of their website’s performance.
Knowing how to use Google Analytics effectively and relating the metrics back to business KPIs is vital to demonstrating the value that you are bringing.
Deciding what to measure
The power of the Google Analytics tool means that there is a huge amount of information that can be generated. It can be difficult to sift through it all and decide what to measure and use to optimise your campaigns and demonstrate their effectiveness.
Key to using Analytics effectively is to ensure that it is used to measure KPIs, rather than vanity metrics.
An effective KPI determines performance against your business objectives. Ideally it will directly impact cash flow, either by increasing revenue or by decreasing costs e.g. average order value, revenue per acquisition, cost per acquisition etc. If your sales process has an indirect path to purchase, then ‘sales leads generated’ can be a KPI, with a sales pipeline figure attributed to them.
Google Analytics, and other analytics tools, can also distract us with ‘vanity metrics’, numbers or stats that look good on paper, but don’t actually mean anything important.
When you open up Google analytics, you are presented with a graph showing the number of visitors for that month, the number of pages they visited and the amount of time that they spent on your website. All of these data points look good if they are going in an upwards direction and can make us feel as though we are doing a good job with our website. However, The real trick is convincing these visitors to become customers.
To decide on whether something is a vanity metric, ask yourself whether the metric helps you to make a decision? When you see the metric, do you know what you need to do?
If you don’t, you’re probably looking at a vanity metric.
There are many additional data points which are important for internal marketing measurement e.g. email delivery rate, email open rate, website bounce rate etc.
These ‘actionable metrics’ are important because they allow marketers to measure and optimise a campaign’s’ performance. We can take direct action and make changes to an email subject line, or a landing page headline, which can improve the performance of that campaign.
However, these metrics don’t directly impact the business’s bottom line and should therefore not be reported as KPIs to senior management.
Using Google Analytics to measure metrics that matter
Google Analytics’ primary method of measuring actionable activity is the completion of ‘goals’. A goal is a record of a user completing an activity, such as making a purchase, submitting an enquiry form, registering for a trial etc. These are all actions which will contribute directly your organisation’s business goals (making money, receiving ‘sign ups’, etc.)
Every goal can also be assigned a monetary value within Analytics, which makes calculating its contribution to the bottom line more straightforward. This can be a useful way of assessing the benefit of an action with no immediately obvious monetary value and ensuring that only meaningful KPIs are reported on.
Goals vs. Events
Google Analytics can also be used to track website ‘events’ as well as goals. An event can be any user interaction, from a video play to a scroll to a certain point on a page and are useful to understand how visitors are interacting with a website.
Events aren’t just vanity metrics – they can be used to make improvements to a website to make a conversion more likely e.g. if an event shows that only 20% of website visitors are scrolling down to the bottom of a website page where a call to action to open an account is located, this could be moved higher up on the page to ensure that more website visitors view it and take action.
A key difference between ‘goals’ and ‘events’ in Google Analytics is that Analytics will track the path that a user takes towards goal completion. You can see where a user entered the site and which pages they interacted with before completing the goal. Event ‘funnels’ are not tracked by Google Analytics.
This can be used to optimise the path taken towards the goal completion e.g. if it can be seen that 50% of users are leaving the site after reading a particular page, this page could be modified to reduce the number of drop-offs, resulting in more goal completions.
Generating ‘Qualified Leads’
Google Analytics, and other marketing automation tools, can also be used to improve Marketing’s relationship with Sales, ensuring that only qualified leads are passed on, improving Sales’ perception of the effectiveness of Marketing.
Key to success here is ensuring that Marketing and Sales have clearly agreed the clear distinction between Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs).
While the exact definition of a MQL and SQL differing for every organisation, a broad definition would be:
- MQLs have expressed interest and match target prospects closely enough that continued communication, qualification and inclusion in the pipeline report or forecast makes sense.
- Sales Qualified Leads (SQLs) are ‘hot leads’ that are likely to close.
Effective use of analytics and increased collaboration between the two functions will result in more leads of a higher quality being passed on, resulting in more sales, more success for the organisation and increasing the perception of Marketing’s effectiveness and value.
Demonstrating Marketing’s Value
By using Google Analytics effectively, assigning a value to goal completions, focusing on passing on only Sales Qualified Leads and ensuring that only bottom-line-focused KPIs are reported on to senior management, financial services marketers can demonstrate their value to the business and change the way that Marketing as a function is perceived.
Strong quantitative analytic abilities have not always been part of the core skill-set of marketers, but are definitely needed in the increasingly data-driven marketing environment.
It may be necessary to assess whether your current Marketing team has the skills required to measure and demonstrate their effectiveness through Google Analytics. If not, it may be necessary to strengthen your capacity in this area, either through in-house or agency resources.
Download the Yell ‘State of Financial Services Marketing 2016’ survey to read more insights on the challenges and opportunities that financial services marketers are presented with right now and timely recommendations to help you plan your marketing efforts for the year ahead.Get the full story