Marketing performance: How many XXX is “good”?

Introduction

Business owners are busy and so a natural step to evaluating marketing performance is to look for benchmarks of what a “good” level of any marketing metric is. Just a short exploration using Google’s ‘people also searched for’ brings up lots of variations on the same basic question I have used in the title. The XXX is not an oversight, it could apply to anything!

There is not a straightforward answer to those questions because what is “good” depends on lots of things. The stage of your business, where you sit in the market, which type of activity you are evaluating, when you ran it, what it was meant to do, the other activities that you ran. And so on. One of these situations may apply: 

• You do not have the time to set about unpicking the complexity only to end up with inconclusive insights that you cannot use. You do nothing instead.
• You ignore any complexity and make decisions based just on the numbers you see. A few incorrect conclusions may have crept in leading to a bad call.

There is a middle ground that is often overlooked. Situate any metrics you want to evaluate in some context. This is something that anyone can do with a little bit of time and patience – it does not require a specialist. Here are a few of the things I do. I have borrowed some metrics from Coca Cola GB in the public domain to illustrate: 

• The Coca Cola GB Facebook page has 105.6mn fans on 11^th May 2021. That sounds impressive because it is big. But is it “good”?

Definition: what does your big number really measure? 

Hang on a minute. There are an estimated 67.6mn people in the UK in 2021. But 105.6mn Coca Cola GB Facebook fans. Now, with some context, we know that: 

• Not all of them fans on this page can be from GB.
• Or it is a cumulative total that does not include “unlikes”.
• Or the total does not de-duplicate multiple likes.

Knowing how a number is defined is a great first step. In this example, the number of Facebook fans is probably not a good proxy for GB marketing performance. 

Proportion: is it still big as a percentage? 

If someone from anywhere in the world can become a Coca Cola GB Facebook fan, then the world’s population is a better number to compare to. 105.6mn = 1.4% of the global population of 7.8bn. An apparently large, engaged fanbase is very small when you compare it to its potential. 98.6% of the world are “not fans” by this measure. 

Comparison: is it +/- on past performance, vs. competitors?

I picked Coca Cola’s Facebook fans because it is publicly available. If I did their Facebook marketing evaluation, I would want to look at how any new fans they picked up over time instead of a running total at a point in time. This would enable me to understand more about what activities made this metric move about.

Getting information on what competitors are doing is often much harder, but not impossible. Bigger businesses may enter campaigns for awards or write white papers in which some figures are published. Smaller businesses may blog about activity they have done for their own or other people’s businesses.

Then there are averages. They can be useful but tread carefully. Averages are popular because they are based on large samples, but it is wrong to assume to this means they are accurate. The larger the sample, the less likely it is that an average is relevant to your business. Remember there are different ‘average’ measures too.

Impact: how important is this metric in reaching your goal?

The example I have used already alludes to the high likelihood that Facebook fans is not a good yardstick for overall Coca Cola marketing and therefore business performance. At best, Facebook fans may be a good interim measure of how well Facebook campaigns worked. But only if you track new fans over time. You still have challenges if you look at marketing activities by channel like this, even if you put metrics into context as outlined above: 

• If you evaluate performance of each marketing channel in different currencies (fans here, clicks there) how do you know which is best, overall?
• Evaluating channels in isolation ignores the strong possibilities that some channels work together or do different marketing tasks.
• Marketing metrics are also all highly likely to be driven by non-marketing factors, leading to an overestimation of the importance of marketing.

Sometimes the metrics that a business obsesses over are not the ones that link most closely to business performance. It is natural to gravitate to metrics that are easily trackable. But that effort without any knowledge of the relative contribution that moving this metric has on your bottom line is wasted, Measure for a purpose. 

Wrapping it up

 My top tips for evaluating marketing metrics in context are: 

• Understand what your metric really does - and does not – measure.
• Work out what it is as a proportion of what it could be.
• Compare it to your own past performance - and competitors if possible.
• Focus efforts just on metrics that drive your business performance.

Get in touch for more detail about how to create a better marketing measurement framework. 

Please ask before reproducing my material partially or wholly for commercial use.
© Jo Gordon Consulting Ltd 2021