In his presentation, Spencer broke down why and how to devise a KPI framework to reach specific business goals.
What is a KPI?
KPIs, or Key Performance Indicators, are quantifiable measurements that help businesses evaluate a marketing campaign’s success rate and effectiveness. In other words, as Spencer noted, measuring KPIs helps marketers take credit for their work.
The Recency Effect: “What Have You Done For Me Lately?”
The bain of every marketer’s existence, according to Spencer, is the recency effect. The recency effect means that we attach far more meaning and importance to recent events than those in the past. In marketing, it surfaces as our colleagues and executives asking, “Whatever you accomplished last quarter was great, but what about right now?”
This means that as marketers, we must constantly prove why we have our jobs. Therefore, we must measure the results of every marketing campaign we plan and implement. It’s a matter of “Show me the results, or it didn’t happen.”
This is where KPI measurements come into play.
A Framework For Tracking & Reporting KPIs
Spencer introduced three kinds of metrics. He explained that unlike descriptive metrics we might use to measure things like return on ad spend or growth of monthly revenue, the following styles of metrics are buckets from which we can draw our metrics.
1. Zero-Sum Game – Pride
In a zero-sum game, competitors directly affect you. In other words, someone else needs to lose for you to win. It’s natural for us to compare ourselves to our competitors and to feel pride when we “beat them” at any given achievement or goal. Spencer emphasized that with the zero-sum game, we’re chasing that feeling of pride. This one’s a little bit out of our direct control, but it’s possible, which is exciting.
Spencer gave the example of an organization that wants to rank #1 for a specific search term. This is an aspirational KPI where the organization might ask, “Who’s ranking 1st? We’re better than they are, we’ve got to figure out what we can do to beat them.” If this goal is reached, the resulting feeling would be pride from beating out the competition.
2. Collectibles – The Feeling: Power
When it comes to collectibles, we face the question of “How do we constantly make ourselves feel good as marketers?” The answer, Spencer revealed, is by knowing that we’re doing an excellent job in our roles. This bucket is where we ask ourselves, “In our jobs, what activities can we control, and how can we take credit for these activities?” When we ascertain these activities, we must continue to perform them repeatedly to avoid “breaking the chain,” Spencer noted, citing the classic Jerry Seinfeld reference.
To illustrate collectibles, Spencer presented the example of social media followers. If we want to “collect” more followers, in theory, we should commit to posting repeatedly. Spencer explained that as long as the content is reasonable and appropriate, the only way we’ll get a net negative in followers is if we stop posting altogether. Unlike the zero-sum game where we might be trying to rank #1, here, we can show a chart of our ever-growing followers, which is bound to make people feel good. It makes them feel powerful. However, Spencer emphasized, if the number is going up, we owe it to ourselves to record it. After all, our hard work deserves recognition!
3. High-Water Marks – The Feeling: Progress
With high-water marks, it’s a matter of holistic progress, and it’s often about the numbers going up and down, be it followers or web traffic. With high-water marks, we must do everything in our control to ensure that the numbers progress while remaining conscious that the number will inevitably go down. According to Spencer, it’s best to prepare for this reality ahead of time. We can do this by taking periodic snapshots of what we’ve achieved along the way as we hit high-water marks. This way, we can take credit for our accomplishments regardless of fluctuation in the process. It will also help us to set our sights on the next big thing rather than wallowing in every natural downturn.
Spencer’s example for high-water marks was website traffic. He shared that overall website traffic is brutal to measure because we don’t know what drove people there in the first place. Plus, website traffic will inevitably retreat. As a result, relying solely on this single, broad metric isn’t the best move. So in marketing, Spencer proposes that we aim to look at everything from a campaign perspective. Break it down. When we do this, it’s not as discouraging and allows us to recognize our progress and celebrate when we hit high-water marks at specific points.
Spencer then closed out the presentation with a piece of practical advice for marketers:
When we are tasked with creating a piece of content or any other campaign initiative, we must keep track of that project’s performance results and follow up. So, for example, if a sales professional asks you to craft a blog, report back to them with specifics on how that individual blog performed. And then, we can be fully transparent by disclosing, “These results are going to drop naturally as interest wanes, so what’s the next piece of content we can build to get back up there or climb even higher?”
See You Online for December’s Craft Marketing
Craft Marketing invites you to its next event online at 4:00 PM on December 14th, 2021, for a special end-of-the-year extravaganza, “Crystal Ball Craft Marketing: What’s Coming in 2022.” This event will feature presenters of Craft Marketing past covering a variety of topics, including Nick Myers (emerging technologies), James Roloff (websites & SEO), Lindsay Ojeda (B2B), Josh Clemons (social media), Jake Bawolek (paid media), Eagan Heath (e-Commerce), and Rowan Childs (non-profit.)