By Scott Smigler, Division President and Founder, Agital
Marketing too often focuses on optimization without clearly understanding what outcomes are being optimized. This often leads to an overemphasis on marketing metrics that are too focused on channels and disconnected from strategic business objectives.
Here’s how to break free of channel-specific marketing measurement and realign with core business goals.
Step 1: Identify Strategic Objectives
The first step is to determine the strategic objectives of the business. This involves moving beyond conventional marketing metrics to focus on customer behaviors and lifetime value. Important metrics include Lifetime Value, Average Order Volume, repeat purchase rate, churn, etc. The aim is to understand whether the goal is to enhance loyalty, increase average order volume, boost short-term revenue, or focus on prospecting. Each of these corresponds to a different set of marketing metrics.
Businesses can draw inspiration from e-commerce companies, which excel in understanding and targeting customers. They use data to create personalized experiences and drive sales. This model, when applied across in other verticals, can lead to more effective marketing strategies, enhanced customer engagement, and business growth. If it works in e-commerce, it can work anywhere.
Step 2: Create a Holistic View Across Channels
The proliferation of channels and the complexity of the channel mix reflect changing consumer behaviors. Marketers must keep pace with these trends to effectively reach their audience. Historically, marketing efforts have been channel-specific (like Google, Facebook, and Instagram), but this approach has created silos in everything from budgets to technology to agency organizational structures.
The omnichannel imperative demands a more holistic approach, one that considers the cumulative impact of marketing strategies across all channels. This means moving beyond channel-specific optimizations, which focus solely on maximizing Return on Ad Spend (ROAS) within each channel, to a more integrated view.
Step 3: Align Omnichannel KPIs with Strategic Growth Objectives
Achieving a higher omnichannel ROAS does not automatically mean reaching strategic business objectives. An omnichannel perspective can be limited if it doesn’t align with the business’s core goals. The key is understanding the lifetime value of a customer and establishing acquisition cost goals in line with strategic objectives. For instance, if the aim is to maximize short-term profit, set goals based on 12-month customer lifetime value; for long-term growth, base them on multiple years.
Statistical analysis and media mix modeling can provide deeper insights into how various marketing activities contribute to overall revenue growth, ensuring alignment with strategic objectives. Sometimes, that takes more manual analysis than simply relying on black-box measurement solutions.
Step 4: Embrace Strategic Agility
In the fast-evolving digital landscape, agility is crucial. Marketers must be open to adapting their tactics based on real-time feedback and data analysis. This means moving away from rigid, channel-specific plans to more dynamic strategies. Continuously monitoring and adjusting marketing strategies ensures they resonate with the target audience and meet business objectives.
Too often, marketing is measured by marketing metrics alone, driven toward maximizing ROAS on a channel-by-channel basis, stuck in silos that hinder a holistic view of omnichannel performance. Even the most holistic view of marketing tends to answer to metrics that remain disconnected from real strategic business objectives. This myopic view can doom marketing strategies.
Businesses must move beyond channel-specific optimization and adopt a holistic, data-driven approach to digital marketing to thrive in today’s highly competitive landscape. This means looking beyond short-term results and understanding the lifetime value of customers, integrating different marketing channels into a unified strategy, and being agile in adapting to changes.
