Are You a Slave to Your Data? How Taking a Narrow View of KPIs Can Limit Growth

I’ll be the first to tell you that data is critical for proper digital marketing efforts.

It’s crucial.

Without numbers, goals and key performance indicators (KPIs), it’s impossible to know whether or not our efforts are producing the results we desire.

Despite that, “more data” isn’t always “better data” – and it certainly isn’t always “better results.”

Marketers today face the enormous challenge of sifting through the wealth of data available to them and transforming these key pieces into actionable insight.

And while there are plenty of articles out there telling you how to gather this data and how to choose your target metrics, there are far fewer talking about their limitations.

Today, I want to explore some of the challenges marketers face when implementing data-driven analytics initiatives and when dealing with the limitations of data themselves.

After that, I’ll leave you with some strategic insights that’ll help prevent the way your organisation uses data from limiting its future growth.

The Problem with Data

Attribution and performance data used to be incredibly expensive to come by – not to mention unreliable, due to a lack of precision in collection methods.

Think about it – back when your company was running TV spots and print adverts, could you really tell which collateral pieces sent you sales? Or were you making your best guesses and hoping they proved correct?

Now, all you have to do is load a bit of code onto your site and be granted access to seemingly-unending streams of engagement, conversion and attribution data.

Compounding the problem are the number of new tools entering the market every day, promising bigger and better results.

Marketers who don’t know how to dive into these streams to pull out the highest-priority insights run the risk of a number of problems.

They get stuck in “analysis paralysis”

It’s unfortunately common, but too many business owners and marketers – when faced with an immeasurable amount of data – simply do nothing.

The problem is “analysis paralysis” – a condition the Todoist’s Becky Kane describes as follows:

“Rather than empowering us to make better choices, our virtually unlimited access to information often leads to greater fear of making the wrong decision, which in turn leads to us spinning our wheels in a seemingly inescapable purgatory of analysis paralysis, all the while getting nowhere on our important projects.”

Kane backs up her definition using psychologist Barry Schwartz’s principle, the “Paradox of Choice.”

According to Schwartz’s work, having too many choices at our disposal doesn’t – as we might assume – make us happier.

Instead, an abundance of choice is more likely to leave us feeling anxious, dissatisfied or paralysed.


Image Source: Todoist

I see this all the time in marketers. Being able to choose from hundreds of different data analysis tools should make it easier for us to find the right one.

Instead, we’ll spin our wheels – reviewing tool after tool – unwilling to rest until we’ve found the right one (let alone the right metrics to track with it).

In the end, all we have to show for our efforts is wasted time.

They focus too much on easily-provable vanity metrics

Now, let’s say you manage to overcome analysis paralysis and select both marketing data tools and the KPIs you’ll measure with them.

Be careful that the metrics you’ve chosen are ones that have actual value to your company.

The Harvard Business Review’s Linda J. Popky explains:

“It’s not that marketers don’t want to measure the right things. With a wide variety of advanced, easy-to-implement analytics, it’s easy to be led off track and fall prey to a few pitfalls. The foremost one is measuring what’s easy to track. Just because a lot of web and social media behavior is trackable doesn’t mean you should track it. Much of this data (e.g., clicks on a web link) is too granular to be used for higher-level decisions.”

Let’s say you decide to hone in on your email marketing campaign – a good choice, given that some studies have identified a 4400% ROI and $44 for every $1 spent using the strategy.

Your email marketing program likely provides a number of different data points for your consideration, including (but not limited to):

  • Delivery rates
  • Open rates
  • Link clicks
  • Conversions from email subscribers

The first three on this list are easy to measure – and easy to improve upon.

However, they have very little impact on the overall success of your campaign.

Imagine two scenarios:

  • Marketer A has a list of 5,000 subscribers. He sends an email blast promoting an upcoming event and gets 100 people to open the message (a 2% open rate). He revises his subject line, resends the message and gets 200 opens. He’s doubled his open rate and declares his second message a success.
  • Marketer B also has a list of 5,000 subscribers. She sends a similar sales message to her list, gets the same 2% open rate as Marketer A, and notes than 1 of those opens turns into a sale. She tweaks her CTA, resends the message, and although her open rate doesn’t change, she doubles her conversions.

Which of these two marketers do you want to be?

In the first case, Marketer A improves his open rate, but because he’s only tracking this surface-level, vanity metric, he has no way of knowing whether or not he’s actually made more money for his business.

Marketer B, on the other hand, can say definitively that her activities yielded tangible results for her company.

That’s the power of focusing on meaningful metrics – not vanity KPIs.

How Data Limits Growth

The two scenarios described above – marketing that’s either stalled or pegged to vanity metrics – represent clear limits to growth.

If you aren’t moving forward and you aren’t collecting the right data, you can’t advance your marketing campaigns. Simple as that.

That said, most modern marketers have already faced – and overcome – these challenges.

In these cases, the limitations data places on growth can be more subtle, though they’re no less deserving of your attention.

Measuring Quality Over Quantity

In the “Marketer A vs. Marketer B” scenario I described above, an issue was the fact that Marketer A was tracking a surface-level metric without a direct impact on campaign performance.

But just because you’re tracking metrics that are further down the funnel doesn’t mean you’re tracking the right aspects of those KPIs.

Take the example of leads generated, as illustrated by Marketo’s Jon Miller:

“Focusing on quantity without also measuring quality can lead to programs that look good but don’t deliver profits. (To take this idea to the extreme, the phone book is an abundant source of “leads” if you only measure quantity, not quality.)”

On the surface, “leads generated” appears to be a better metric than something like the “website clicks” or “average time on site” that might precede a site visitor turning into a lead.

But the quality of these leads is another layer that must be considered.

A higher number of low-quality leads isn’t a real win, even if it might look like one on paper.

Continue drilling down to the metrics you’ve select to ensure they’re indicative of actual performance gains for your company.

Overinflating Contributions and Channel Importance

Part of the reason situations like the low-quality leads example above continue to happen is the way marketing budgets have been decided in the past.

In siloed environments, in which every department must defend the use of its spend, it’s natural for marketers to emphasise the impact of their efforts by any means necessary.

If you knew that your ability to get funding for the next quarter or the next year was dependent on the results you presented to your c-suite, wouldn’t you try to trump up the numbers to look as impressive as possible?

Unfortunately, this results in situations like the one Marketing Land’s Matt Nitzberg describes below:

“Each channel manager often takes more credit for sales than they actually earn, so channel activity, added together, is often a bigger number than total sales. Goals that reward cross-channel synergy and total sales growth can help stop unhelpful internal competition.”

The consequences of channel managers overinflating their own contributions are two-fold:

  • The total performance of individual channels relative to each other can’t be fully understood, due to internal competition.
  • Specific tactics carried out within each channel can’t be prioritised appropriately, since their actual impact on channel performance isn’t known.

Both of these outcomes are undesirable from a performance management perspective.

Target KPIs must be designed in such a way that there’s no advantage to team members or departments who fudge the full impact of their actions.

Focusing on the Short-Term, at the Expense of the Long-Range

In my experience, one of the most insidious ways an excessive adherence to metrics stifles growth is the way it dampens long-range thinking.

Even metrics that seem performance-oriented can suffer from short-range thinking, as I’ll demonstrate in the example below.

Suppose your business sells a SaaS product with a $47 per month price point, and that you use three primary strategies to generate leads: Facebook Ads, programmatic ad buys and email marketing to subscribers who enter your funnel via opt-in forms on your website.

Let’s assume that each strategy generates 200 leads for you.

If you set your target KPI to conversion rates or new customers generated – two common “results-oriented” metrics – Facebook Ads would be the clear winner.

They’d still be the winner if you looked at the total revenue generated by each of the three campaign strategies.

If you took this short-range approach, you’d like decide to scale up your Facebook Ads campaigns – and in doing so, you’d miss that email marketing generates a higher customer lifetime value and a better ROI from spend to revenue generated over the long-range.

Now, admittedly, this is a pretty simplified example I threw together for the purposes of this article. Your numbers aren’t likely to be quite so clear or well-defined.

But that doesn’t negate the problem of short-range thinking. According to Josh Graff, senior director at LinkedIn EMEA, as interviewed by Marketing Week’s David Burrows:

“As an industry, we’re guilty of focusing on short-term metrics, which fail to offer a holistic view of how campaigns fit together to reach the same goals. There needs to be a shift in thinking long-term, where marketers are always ‘switched on’ and looking for ways to build more meaningful relationships with consumers.”

Part of that comes down to asking whether or not the metrics you’re targeting adequately reflect the long-term performance of your campaigns.

But it’s also about looking at the bigger picture of customer experience.

Limiting Creative Thinking

One of the challenges a narrow data-driven focus presents is that it transforms transactions and customer experiences into data points.

But customer relationships aren’t black and white. Individual customer experiences exist on a spectrum of grey. Treating them like individual data points risks missing out on the breadth of more complex factors that could be driving purchasing and referral behaviours.

Consider the following data points from HelpScout, which suggest that customers value the relationships they have with brands more than ever.

  • 78% of consumers have bailed on a transaction or not made an intended purchase because of a poor service experience.
  • 3 in 5 consumers (59%) would try a new brand or company for a better service experience.
  • On average, loyal customers are worth up to 10 times as much as their first purchase.

All of these trends are indicative of the need to treat marketing as just one piece of the bigger picture.

Do your current target KPIs take loyalty into account? Do they account for variables like a poor service experience that could be lowering conversion rates?

Further, what will your company do if the steps needed to produce a better customer experience don’t come from the marketing department at all?

If your nose is buried in conversion rate and ROI reports, you may completely miss the fact that what’s needed to drive real growth for your company is better onboarding and faster customer support responses.

You’re essentially seeing the trees of purchase decisions, but not the forest environment – in all its many complexities and influences – in which they occur.

Until you learn to step outside of your strict focus on marketing metrics and see this bigger picture, you’ll miss opportunities to drive real growth for your company.

How to Move Forward

I’ve covered some individual tactics for determining whether or not your target marketing metrics support long-term growth, but what really interests me as Louder’s CMO is the strategic side of things.

If you’re a CMO or other high-level marketing exec, I’d like to leave you with the following challenges:

Do the metrics you’re tracking reflect real growth for your company?

Hopefully, this isn’t a concern for you. Enough has been written online about choosing metrics that prove engagement – rather than “vanity metrics” – that none of us should be thinking about social shares, website clicks or other surface-level KPIs as indicative of real growth.

That said, I know how easy it can be to assume that your team (if you have one) is on the right track without noticing that the up-trending reports they’re handing you aren’t measuring the right things at all.

Do you sign-off on the reports that come across your desk without another glance?

When was the last time you sat down with your team to really assess the value of every KPI you’re tracking?

If you can’t confidently say that your team’s target metrics really matter, it’s time for an all-hands meeting.

Have you created a culture that restrains your team’s creative thinking?

As you’re evaluating the metrics your team is measuring, analyse your company culture as well.

Have you inadvertently set up systems of internal competition that might lead employees to overstate their own impact?

Or have you stuck them with such a narrow range of performance metrics that they lack the freedom needed to explore new, potentially-profitable channels?

Employees may not be honest with you if you ask them these questions directly, out of fear of rocking the boat.

Instead, pay attention to the subtle signals.

Do overarching metrics add up, or is the sum of the pieces greater than the sum of the total? Are your team members testing new things – even if they risk missing metrics goals by doing so?

Sniff out these situations, and adjust course to embrace more creative thinking and flexibility.

How are you thinking about growth outside of target KPIs?

Finally, start looking at that broader forest of future growth.

What factors could be contributing to the performance of your marketing channels, outside of the channels themselves?

Are there other departments you need to loop into your conversations to ensure critical contributing factors aren’t overlooked?

Continually be evaluating the role of your department within this larger ecosystem to uncover wins you can’t score through marketing metrics alone.

Looking Beyond Metrics to Drive Future Growth

Don’t take this article to mean that I’m against setting target KPIs or measuring metrics. Quite the opposite.

I believe we need data to help give our campaigns direction and to ensure every dollar being spent is returning as much revenue as possible.

But I also believe it’s important that we avoid treating data and hitting metrics goals as the “true north” of driving growth, when the real picture can be so much bigger.

Don’t let a narrow focus on metrics prevent your company from reaching its full potential. Expand the way you think about the role of marketing – and how you measure it – in order to facilitate future growth.

What do you think? Do you agree or disagree? Leave me a note below sharing your thoughts:

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