There have been a number of major athletic events over the past few months: the Women's World Cup, the US Open, the British Open and others. The lovely weather in the Northern Hemisphere brings the athlete out in many of us. Even the casual athlete is honing their work-out routine. With this in mind Laura Patterson, president for VisionEdge Marketing, here examines the KPIs that marketers can borrow from the world of athletics.
There are, in fact, three key metrics categories from the sports world that can be applied with equal relevance to marketing, those being: outcome, performance, and process. First, let's quickly define each category:
- Outcome metrics are what we want to achieve
In sports the near-term outcome is to win the game and the longer term outcome is to be first in the category, whether that's taking the World Cup or the Triple Crown.
Examples of business outcomes include things such as ranking in the top 3 in market share for a particular vertical, or expanding the footprint inside a customer segment by some number of new design wins. However, even if you do your very best, you cannot always control outcomes. Customers may not have a budget, or they may go through an organisational change that affects buying decisions. And, of course, you cannot control competitors and what they may do in the market. Good market research, solid competitive intelligence, and excellent customer relationships can all help ensure that you are setting realistic and achievable outcome targets based on what you know about the situation and your capabilities.
- Performance metrics examine what we do
Performance metrics are always action-oriented. In the world of golf, greens in regulation and putts per round are examples performance metrics. When you are operating within the parameters of the performance metric you are more likely to realise the outcome, in this example, par or better golf.
Marketing performance metric examples might product adoption rate of a new product to impact the market share outcome, or key decision maker meetings among the top 10 customers in each vertical to impact the win rate. Although achieving an outcome is not directly within your control, achieving a performance metric is. It may take tremendous work, but hitting performance KPIs is based on your own ability. Performance metrics are extremely important. They dramatically affect the attainment of the outcome.
- Process metrics help us realise the performance metrics
As an illustration of the idea of process metrics, consider the training world, where a process metric might be a certain cycling cadence rate that you attempt to maintain in order to reduce muscle strain and improve endurance.
Translated to the world of marketing, a process metric might be the development and implementation of an opportunity scoring and management process in order to reduce cycle time and improve conversion rates.
Formulating Performance Statements
Besides helping marketers reach a desired business results, performance and process metrics help develop, focus, and set priorities. Whether you are just beginning a performance management journey or you are among the best-in-class, marketers who incorporate all three types of metrics achieve the greatest success because those three metrics work together: Process metrics help you achieve the performance targets; if those targets are set properly, their attainment improve the likelihood that you will reach your outcome targets.
Regardless of the category, George Doran's SMART approach provides a well-used way to craft performance statements:
Clarify what exactly is to be accomplished. Example: We will acquire five new customers for the new product this year.
Objectively track your progress. Example: We will generate fifteen appointments with new customers to demo the new product by the end of the quarter.
Establish the things that must be done, and by whom, to directly affect the outcome. Example: We will execute a three-pronged outreach programme to connect with 100 new customers within 30 days of demo release.
Know what you can handle and develop steps along the way to help you get there.
Specify dates for when the results can be achieved. Example: We will contribute 35% of the opportunities to the pipeline quarterly.
All of this may seem intuitive and obvious. Yet, when we ask marketers about their metrics, how they set them, how the performance targets work together, and what their plan of action is, only a few marketers are prepared with answers.
To be successful, you must create and document a plan. Use the planning period to assess all of the areas that need improvement if you are to put yourself in a position for success, what you will do to address those-and when.
You should also plan for potential setbacks: Performance targets can be affected by any number of external forces, so try to anticipate what might happen and plan your response in advance. Doing so will help ensure calmer course adjustments if they are needed.
"For example, to learn how to tactically swim in open water, I will need to sign up for a clinic four weeks before my first open-water race. Even all of the best athletes also rely on coaches," concluded Patterson. "Marketers who want to excel should do the same. The performance management journey can be difficult, and if you need help you shouldn't hesitate to use the knowledge of a specialist to help prepare both you and your organisation."