Future of Business

December 6, 2017

Mo Numbers, Mo Problems – Going Beyond Metrics and KPIs

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Written by: Ross Quintana
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We live in a world being driven more and more by numbers. Big data, small data, analytics, Oh my. But not everyone is cut out to live in a world of numbers. Forrester predicted that in 2017 30% of CMOs likely to be fired for not keeping up with the skills needed in a data-driven business environment. As the title says, Mo numbers, mo problems. Marketers and business people are all caught up in marketing metrics and KPIs (key performance indicators). The problem is numbers are not all there is to business success yet these numbers are becoming in many cases the only measure of success. If you have ever worked for a client or boss who wanted numbers for numbers sake without caring about their business or customers, then you feel my pain. Even worse, we live in a world were a majority of businesses are short-term thinking, profit at cost of good business, customer acquisition over customer loyalty, and employees offer only functional value thinking. Well it is time to analyze this way of thinking and see where it leads. Hi, my name is Ross Quintana, and I am an analyst and I have been logical and insightful for 20 years (this is not my first analyst anonymous meeting).

Understanding the Matrix

The Matrix
image credit: Warner Bros.

We live in a world based on numbers, and for the first time we are going through a phase where we are starting to see the matrix, the construct, the code of our world around us. In business they have been focused on a very narrow few numbers like revenue, profit, and expenses. These are very transactional but not very insightful. Like a human without skin, they are rudimentary and mechanical. If the thought of a human without skin makes you feel uncomfortable, imagine how your customers and employees feel when you treat them like a cog in a machine and not a person. It is the skin that makes you an individual, it is from the observation of individuals that a tremendous amount of insight can be gained. It is the insight and understanding that helps us give numbers meaning. Dio Favatas, managing director at Truth Initiative breaks down the issues between data and usefulness here:

“Organizations have flocked to big data thinking that big data is the solution. Rather, selecting the data that’s actionable to drive user experiences, engagements and driving consumers down the funnel is overlooked. Practitioners need to head into big data knowing which parts drive action. If sales are you bottom line, pay more attention to the steps that the user went on to make the purchase decision. Hence why multichannel attribution is paramount. All the data in the world is meaningless unless you know what data drives mid- and lower funnel engagement. Data and content, with the user in mind, drives positive outcomes. While data alone is simply data. Just another dashboard that the c-suite will overlook.” – Dio Favatas

Metrics vs KPIs

Metrics are simply things measured, but KPIs are metrics that indicate performance. Not all metrics are KPIs and not all performance is key to your business goals. This is why understanding your business goals and also the capabilities of things like social media and content marketing can help you realize the KPIs you should be shooting for. Numbers and data alone are not inherently useful by themselves. Robert Rose, Chief Strategy Officer of The Content Advisory says:

Metrics vs Value

Not all value can be quantified by metrics. One of the most frustrating things as a social media manager that we face is dealing with short sighted business owners who simply want to generate revenue as easily as possible. If you open a store, buy inventory, hire staff, and sell products, you can generate revenue, but that doesn’t seem fast at all. Try just grabbing a lady’s purse and taking her money. That is how it often feels to marketers who are trying to deliver value and help people grow their business with social media and then they run into the, “We don’t care about what you are doing unless it generates revenue or leads.” There is a lot of business value in relationship development, one to one engagement, increasing trust and brand affinity, and so on. Those don’t show up in the metrics of how many sales or downloads we got this week. I’m like, “Hey you just met that person”, and the client is basically like, “But how can I get my hand in their wallet.” Slow down street thug, it’s time to get legit. Building a business will always be centered on relationships, trust, and exchanging value. Driving a set of metrics does not equal growing your business.

Holistic metrics

Business is evolving and the simple money grab tactics of marketing are not going to keep working. There are more companies trying to grab that purse and the holder is pretty good at defending it. It’s time to create relationships and deliver value. When you set your KPIs, you need to understand your short and long term goals and choose the metrics that can deliver on both. You need people who can understand what the metrics tell you, and the hidden value that the metrics don’t always show. I had a client who just measured the downloads of an eBook, I’m thinking what about the millions of impressions and the influencers who were introduced to your company? What about the lurkers who didn’t download but learned about you, started to trust you, and may buy from you in the future? None of that shows up on their spreadsheet, there isn’t a column for business value, only downloads. That lacks leadership, and that lacks vision, and those are things that build sustainable businesses. It is the unseen value and human elements that will establish relationships that lead to sales and loyalty.

Bending Spoons

The Matrix Bending Spoons
image credit: Warner Bros.

Once you understand the basic metrics, and set up KPIs that go beyond instant gratification, then you start to understand there is more value outside of what is simply being measured. If you haven’t watched the movie The Matrix, you may not understand the reference of bending spoons, but it works like this. The rules you know represent the spoon, but outside of those rules you can bend the spoon with your mind because what is possible is based on your understanding more than a set of rules. The same holds true in analytics. Metrics are one view of the world, but they are a very limited sample of the total information available, and once you understand that you can start to manage your business beyond the metrics, or should I say beyond the matrix. See what I did there. They say if you don’t measure it, you can’t manage it, but don’t get so caught up in a small set of KPIs that you start thinking that is your whole business. Look beyond the numbers.

Stop Eating Sugar, It’s Bad For You

It’s easy to get addicted to numbers, they are so simple, a download is good, but doesn’t really tell you about what is happening with your business. Does a download tell you if your customer likes what they got? Does a download tell you if they are qualified to buy your product? Does a download tell you if they feel better about your competition or if they aren’t ready to buy yet? The simple answer is you don’t know. But many marketers and their clients will measure business strength and growth on these numbers. Sorry that is too simplistic, inaccurate, and it’s a bad habit to get into. Say no to KPI sugar. Data is not telling you the story of your business success or growth, it is telling you a very small story. Stop telling marketing if they hit these numbers they are winning and you are winning, because there is so much more to good business than a small set of numbers. Anthony DeNardis, Senior Managing Partner at Shop Local Media nails it:

“Measuring EQ with numbers is difficult. For example, I may read a post and the business will receive the number as reach but to truly understand what I am thinking and feeling cannot be tracked. I think the disconnect is in businesses completely relying on data/numbers and not focusing on true engagement and dialogue via social media. My best insight came from just asking consumers what they want.” – Anthony DeNardis

I Have Growth

Marketers eagerly report green numbers that grew, like a dog bringing back the ball to their owner with their tail waging every month, hoping the numbers stay green or they might lose their job. This cycle of just make them grow is bad for business, both internally and externally. Business is going through a time when basic principles of growth in some key metrics are no longer going to be enough to survive. Businesses focused on growth only are like a drug addict taking more and more drugs to get back to the same feeling. Growth doesn’t deal with volatility, loyalty, market shifts, or leadership. A well built business with loyal customers, brand affinity, strong company culture, employee advocacy, and smart business leadership and vision can survive better than companies who only got good at generating new leads and converting sales. Products and brands become irrelevant in a moment, industries are disrupted, and attention is stolen. You can’t outrun the future, you have to build for it. This is why companies struggle with customer experience and personalization. It is too complex for the basic create stuff and advertise it model. As my friend Joe Martin who does strategic marketing and analytics for Adobe says:

Businesses can’t continue to operate in a complex business environment with simplistic analytics models. The simple money grab business model is on its way out. Growth is not enough, churn is not sustainable. Businesses who want nothing other than their key numbers to go up will be drowned out by competition. Your customers don’t care about your numbers, and as long as you don’t care about your customers, they won’t care about you either and that will be a problem for your business in the future.

The Solution

Business needs leadership! We have seen what happened to Apple when Steve Jobs died, it just isn’t the same and over time the products, marketing, and operations will show that to be true. Companies with billions of dollars in assets are failing because they lack the leadership to guide the ship. Vision and leadership that is willing to stand up and change the focus off short-term gains for long-term benefits will create longevity for organizations. Leadership needs to start at the top but it needs to be throughout the organization. As I recently wrote in a post, CMOs have to teach the C-suite the new rules of marketing and risk and we have to understand things have changed and will continue to change and we must change to rise to occasion.

I would love to hear your thoughts on this subject and what your struggles have been when it comes to a metrics only drive in business. How has it impacted you, your business, and your customers? Leave your comments below.

Do you want to grow your audience and authority online? Want to generate brand awareness, and implement smart social media and content marketing strategies, then hire me! Here is a list of some of our services.



About the Author

Ross Quintana

Founder of SocialMagnets, I am passionate about social media, influence, innovation, strategy, and marketing. I love to help people learn and understand the digital world. I stretch people’s thinking and share my analysis of information, tools, and strategies in social media. Let’s connect






 
 

 
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