Many marketing organizations today have an influencer marketing strategy. The purpose of this strategy is to help with customer acquisition (number and/or rate) and rate of product adoption. The findings in the 2013 Influencer Marketing Survey support this perspective, “influencer marketing is seen as a customer acquisition and lead generation practice not a brand exercise.”
This strategy entails establishing and tapping relationships with people that are perceived by the market and customer to have the ability or power to affect or sway other people’s thinking or actions. Influencers exist within every ecosystem – these can be members of the press/blog community, analysts and industry thought leaders, industry experts, trusted advisors, etc. The breadth, quantity and quality of your influencers will impact the success of this strategy.
Before we jump into how to measure influence marketing, we’d like to respond to a question we’re frequently asked, “What is the difference between influencer marketing and public relations?” The answer to this could be its own article, so to quickly explain the difference, we turned to our friend Chris Aarons (@Chris_Aarons), an expert in implementing influencer marketing strategies.
Chris says, “The simplest answer is that public relations is about communicating your messages to and with members of the press (and some PR firms include bloggers as well) to spread information or news. Whereas, influencer marketing focuses on identifying and securing credible third-parties with extensive networks, who may not necessarily be members of the press, to drive engagement and/or marketing objectives.” We’ll leave it to you to tweet with Chris on how you feel about this explanation!
Back to influencer strategy management… Relevant metrics include:
- Activity-based: number of influencers, types of influencers, and the degree of engagement by each influencer
- Pipeline: deals and wins, influencer contributed lead and acquisition cost, sales cycle impact, and influencer lift
Ultimately, what you want to know is whether influence or sway is impacting customer acquisition, and if so, how much and how fast.
Should this be a viable strategy for your organization, you may want to think beyond counting, and create a way to measure influence. In the social world, various organizations are creating influence metrics. But influence occurs both on and off line, which means you need to be able to measure influence/sway beyond the “social digital world.” As with many key performance metrics, an influence metric is comprised of several measures.
So how might we construct such a metric? Conceptually we can posit that influence is derived from two variables, quality and impact. The equation would look like:
Influence = Quality (%) x Impact (#)
In addition, factors that affect each of these variables include the following:
- What percentage of the desired influencers participated?
- How prominently did they feature your company/product? Assign percentages to these or others you if you prefer [Top billing or stand-alone article/blog, subject line mention or tweet, quote in general or related article, participation in LinkedIn Discussion]
- What is the overall sentiment/tone of the influencers’ content/conversation/discussion? Assign a percentage to each of these positive, negative, neutral
- Quantity – the total number of tweets, shares, likes, comments, click throughs, etc. generated by the influencers
- Penetration – how many of the targeted markets/communities were reached (for example – LinkedIn Groups, click throughs to links)
Add up your quality factors, add up your impact factors, and then multiply the two sums. Start by collecting the data and establishing your base line. Monitor the change in your influence metric and analyze the impact of each factor on the score. Once you complete these steps, it will be necessary to evaluate the relationship between the influence score and your number and rate of customer acquisition.
In his book, The Effective Executive, Peter Drucker explained the difference between efficiency and effectiveness: “Efficiency is doing things right. Effectiveness is doing the right things.” He strongly advised focusing first on effectiveness before efficiency. Along with outcome-based and leading-indicators metrics, Marketers also need both efficiency and effectiveness metrics. Here’s an easy way to distinguish whether your metric is one or the other:
- If the metric is measuring how well you squeeze out waste or cost or measure maximum output for input, it’s most likely an efficiency metric. Marketing spend, ROI, and cost/per lead, lead/rep are examples of efficiency metrics.
- If the metric is measuring how well you are contributing to or producing a desired result, it is most likely an effectiveness metric. Share of preference, share of wallet, products/customers are examples of effectiveness metrics.
As we have learned from over a decade of research on marketing metrics, many marketers are doing a good job of establishing, monitoring, and managing efficiency metrics and not as good of a job with developing, measuring, and managing effectiveness metrics.
This propensity to focus on efficiency metrics ultimately creates a problem for marketing. You can be improving efficiency, which has nothing to do with whether or not what you are currently doing is the right thing to do, while not actually becoming less effective. Effectiveness is about achieving the right result, or being on the right path. When we are positively impacting and contributing to the right result, then we earn our right to participate in strategic conversations.
It may be easier to identify, track and manage efficiency metrics but that may not be the only reason we see more efficiency related metrics. Many people assume that they are on the right track so if and when there is a problem, they address it by trying to make the process more efficient without questioning whether they are going in the right direction. But if you are going in the wrong direction, becoming more efficient will actually make the problem worse. For example, let’s say your company wants to grow its revenue by some amount. As a marketer, you believe you can affect this by producing some additional business from existing customers. So, you are monitoring and improving the inquiries, deals, cost per new deal, etc. The company is growing but its market share is declining. Why, because the growth opportunity is really outside the existing customer segment. So while marketing is becoming more and more efficient at generating business from existing customers, the company’s market share is actually declining and the competitors are achieving greater market dominance.
What’s really important is effectiveness. In the end, it doesn’t matter if your business is spending the least amount possible or your demand-generation initiatives are streamlined. What matters is whether marketing is solving the right problems and moving the right business needles.
Before you start thinking about how to improve your efficiency, step back and think about how marketing is expected to move the needle and measure its effectiveness. Don’t misunderstand, efficiency is extremely important and you will need efficiency metrics. Improving efficiency can make a difference, but only if you’re on the right path. And the only way to know that is to have effectiveness metrics in place as well. Efficiency is important, but powerless without effectiveness. Effectiveness opens the door for efficiency.
None of us would agree to play a card game with cards missing from the deck; we would know that the odds of winning would be significantly diminished. Yet surprisingly, many marketers are willing to implement marketing programs sans analytics.
In the past few weeks I have attended several marketing conferences. At each event, marketers are talking enthusiastically about how to make Web sites, SEO, social media, email campaigns, and mobile better. However, there is very little conversation about how to be smarter. Analytics is an essential card — actually an ace — in every marketer’s deck for enabling fact-based decisions and improving performance, and most importantly, for being smarter.
While the ace alone has value, when played with other cards its power is truly revealed. And when it comes to analytics, the other card is data. Yes — we have all heard the common complaint about the elusiveness of quality data. Unfortunately, data quality has been an issue in organizations for so long that it has now become the ready excuse for why marketers cannot perform analytics. To harness the power of your analytics card, identify your data issues and create a plan to address them.
Another reason that you may overlook this missing card in your deck is that guessing or gut instinct has been working well enough. Unfortunately, this approach may not suffice in the long-term and your “luck” may run out as organizations push to make “smart” decisions. As marketers, analytics is our opportunity to actively contribute to fact-based decisions. Through analytics, marketers achieve new insights about customers, markets, products, channels, and marketing strategy, programs and mix. It also enables marketing to help improve performance, competitiveness, and market and revenue growth.
As the importance of analytics gains momentum, marketers with analytical acumen will be in great demand. According to some resources, the complexities of data analysis and management are becoming so enormous that there is a shortage of people who are able to conduct analysis and present the results as actionable information. Taking the initiative and honing your analytical capabilities will enable you to make sure you have this ace in the deck — and preferably, in your hand.
Most of us are already working with a time and resource deficit. Try to find a way each quarter to bolster you analytical skills. Attend a conference, read a book, take a class, and bring in experts you can learn from. Here are some key analytical concepts and skills to add:
· Quantitative Decision Analysis
· Data Management
· Data Modeling
· Industry and Competitive Analysis
· Statistical Analysis
· Predictive Analytics and Models
· Marketing Measurement and Dashboard
If you can build your analytics strength, you’ll always have an ace in your pocket.
If you’re like us, you probably have one of those piles on your desk that keeps being moved from one corner to another. You know that pile you need to get to but avoid because it will take some real effort to tackle. For many marketing professionals, marketing accountability, analytics and ROI are in this pile. Not too long ago at a marketing conference where Laura was speaking, the organizers had set up round tables with specific topics for discussion over breakfast. Laura was sitting at the measuring marketing ROI (return on investment) table (of course, where else would I be sitting?) which was strategically located right next to the buffet line. While she was sitting there waiting for people to join her, she kept hearing people say, “Oh measuring marketing,that’s just too hard.” There were hundreds of marketers attending this conference, and about 2 dozen tables of 10 were set to accommodate the early risers. Yet only four other brave souls joined her.
We must stop avoiding this topic and tackle the pile. As Sylvia Reynolds the CMO of Wells Fargo says, “Marketing must be a driver of tangible business results…we must start with the goal in mind and a clear way to measure that goal.” ROI is important for accountability–besides being able to justify spending and enable us to run the marketing organization more effectively and efficiently, knowing what is and isn’t working helps marketing achieve greater influence and serve in a more strategic role. Various surveys suggest that over a third and as much as 42% of marketing budgets are not adequate enough to achieve the outcomes and impact expected.
Perhaps your organization like many others is in the thick of budget planning. A key part of budget planning is to establish and validate the money you plan to spend. The more aligned marketing is with the outcomes of the organization and the more the plan includes performance targets and metrics, the more likely you will be allocated the budget you need to achieve the expected results.
So what does it take to tackle this Marketing Accountability pile? Here are six affordable steps any marketing organization can take to start whittling away at the marketing accountability and measurement pile.
1. Focus. Nothing of importance miraculously gets done on its own. To effectively tackle the marketing measurement pile will take all of Covey’s seven habits: from taking a proactive approach and beginning with the end in mind, that is the outcomes you are expected to impact, to keeping the effort a priority when other things present themselves as urgencies to making marketing measurement a win/win for you, your team, and the rest of the organization. More than likely, you are going to need a cross-functional team to tackle this pile – people from finance, sales, IT, operations, etc. working collaboratively together to define the metrics and hunt down and organize the data.
2. Plan an attack. You know that age old question, “How do you eat an elephant?” The answer being, “One bite at a time.” This is true for the marketing accountability and ROI question. If this is a new effort for you, you need to break it into manageable pieces. Quantify your objectives, decide how you will measure them, collect the data that you need to meet the objectives, establish a baseline, gain commitment to the measurement plan, and finally, measure.
3. Get data: “Data is the new creative,” declares Stephan Chase of Marriott Rewards. Establishing metrics, determining effectiveness, understanding efficiencies, all take data. Without data you cannot monitor and measure results. And don’t assume that you have the data that you need to measure your objectives. For example, if you want to measure how many new customers you interest in a new product, you may find that you need first to determine what a “new” customer is. This may require different views of your existing customer records or new strategies for evaluating.
4. Analyze: Once you have the data, the challenge is to generate insights that facilitate fact based decision making. One of the most valuable applications of data and analytics is in leveraging your metrics. The metrics are what enable continuous improvement as you strive to achieve and set new performance standards. Just looking at numbers doesn’t tell you as much as evaluating trends or creating statistical models that help you identify an optimized approach to your marketing efforts. Consider looking at your measurements for what isn’t immediately obvious such as what might have happened if that campaign had gone to the three bottom deciles of customers?
5. Use a systematized process: You may need to set up systems and processes that enable you to capture and track results on an ongoing basis. Many organizations put a substantial amount of energy into initiating these programs and then let them fizzle as other priorities surface. It takes both process and discipline to sustain a measurement effort. Systems help you automate a process so that the process can become a manageable part of your day-to-day operations. Today every marketing organization is moving at a breathless pace. Implementing test and control environment can keep you from having a fatal, head on collision
6. Train. Many marketers are unaccustomed to living in a metrics-based environment. You may need to invest in measurement, analytics, as well as data training and skills development. Start by taking a skills inventory. Find out who in the organization has data management, analytics and measurement skills. Decide what skills they need to perform at your expected levels. Develop training that fills the skill gaps. Doing this in-house allows you to tailor to your needs, but consider courses from universities, associations and external consultants to fill out your requirements.
Moving marketing performance metrics from the “too hard to” pile to the “we can do it” pile can reap rewards for the entire organization.
For more information on Marketing Alignment and Accountability, download our Free White Paper: Charting a Course for Marketing Effectiveness: Alignment & Accountability