By using this Site, you consent to the use of cookies. For more information, please see our Privacy Policy.

X

Optimizing to What Really Matters: 6 Important Measures You Can't Afford to Miss

Volume 1, Issue 2 - March, 2011

Editor, IQ Advisor

In many meetings with brand and agency executives, I observe a focus on media efficiency measures such as “Cost per X”. (Feel free to create your own alphabet soup here: CPM, CPC, CPA, etc.) The conversations often include “How can we decrease our CPC, CPL, CPA, etc.?” Does this sound familiar?

I am not saying that CPX has no value, for media efficiency metrics can be very important. Unfortunately, no one - other than marketers and agencies - really understands this jargon, or furthermore really cares. The common yardsticks across almost all functional areas in any organization are all related to business impact, which is ultimately driven by financial performance measures. Think about it. When was the last time your CFO or controller asked you about CPCs or CPMs? Have you ever received approval for your marketing budget increase based solely on great CPMs? Could this reveal a communication problem?

Money: The Common Language

Only when you add financial measures that are important to the rest of your organization into your communications with them will you get their attention and generate interest. Imagine that you work for a financial services firm and your goal is to generate new loan customers in a multi-step sales process. Your search marketing, online display advertising and direct mail partners have also historically been evaluated in terms of Cost per Application - which seems just fine to those of you in the marketing organization. To determine the additional measures that get attention, let’s look at the other steps in the sales cycle:

  1. Generate the application
  2. Approve or reject the application
  3. Book the approved applications

If you’re like most financial services firms these days, approval constraints have become more stringent, which results in a lower approval rate. Adding (1) Cost per Approved Application and (2) Approval Rates would allow you to minimize the waste from tactics (channel, publisher, creative, offer, etc.) that generate rejected applications. The benefit here would go beyond improving your yield for Approved Apps, by enabling your efforts to have a positive impact on another department by decreasing the operating expenses for loan underwriting.

Similarly, adding (3) Cost per Booked Application and (4) Booking Rates would indicate which tactics produce applicants that actually book loans with your organization.

Since not all loans are of the same value, we’ll round out the assessments of this sales process by addressing the value of each new loan, which would enable you to measure your marketing performance in the terms that are most important to your firm, such as (5) Total Loan Dollars generated and the related productivity measure of (6) Loan Dollars Generated per Media Dollar Spent.

With these six new measures, you could direct your resources to accomplish what’s most important while and show results in terms the rest of your organization understands.

How to Get Started

Start by learning which measures are most important to your organization’s leadership team, and include the notion of “Which new measures would you find most helpful when making budget decisions?” Once you’ve collectively determined what’s most important you should then:

Start by learning which measures are most important to your organization’s leadership team, and include the notion of “Which new measures would you find most helpful when making budget decisions?” Once you’ve collectively determined what’s most important you should then:

  1. Determine who needs access to this information to show, then improve, results
  2. Gain buy-in from the stakeholders throughout your organization and at your agencies
  3. Assess whether your current systems house all of the integrated data you’ll need, or if you will need additional resources to do so
  4. Determine how long you can afford to wait (“Acceptable Time to Insights”)
  5. Integrate your media information with post-application (or post-conversion) data from your in-house CRM or other production systems
  6. Keep stakeholders informed and engaged with your progress
  7. Protoype, deploy, optimize and share the results!

Learn more about how Visual IQ empowers brand marketers and their agency partners with advanced marketing attribution.

Subscribe to the IQ Advisor

Click here to subscribe to The IQ Advisor monthly e-newsletter.