03 May Your Marketing Automation getting the job done? Here are a few tips to measure its effectiveness
Members of the Build Business Results (BBR) Network know that tracking performance is as fundamental to business success as production, distribution or sales. But how about our email marketing? With marketing automations, however, it’s importance is compounded, as such automations occur “behind the scenes” and without explicitly measuring their performance, you may never know if they are helping, or, perhaps, doing damage. I cannot tell you how many business owner I speak to have some marketing firm set them up at the onset and never review them. Yet their businesses have grown and evolved. It's important to put into practice regular reporting and for you to get into the practice of reviewing these metrics with a strategic lens. Using the simple, straightforward metrics described herein, will help you do just that. Moreover, once you start using these metrics, A/B testing between various automation options will become easier and yield more accurate results. Smart Insights in partnership with CommuniGator and aimed at helping B2B marketers review their own current use of Marketing Automation in another fabulous report and some of the key areas for monitoring effectiveness are provided below. Do share with us what you are learning in the Build Business Results (BBR) Network. We are all there to learn and grow together.
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Marketing automation is a godsend for digital marketers, but needs to be closely monitored, otherwise your investment may be for naught. The following metrics will help you keep tabs and get the most of your automation software.
If you’re a digital marketer, you’re probably using marketing automation software, and for good reason. You may be looking to avoid human error, to be more responsive or to reduce overhead. When creating and managing automations, you most likely use many features, to try and give your users the best possible customer journey. Whatever be the case, you need to be able to measure how well your automations are panning out. It turns out, however, that for most, this is no simple task. In fact, studies show that 50-60% of those who use marketing automation, find measuring automation performance to be the most challenging part of engaging in automations.
Measuring automation performance, clearing the smoke
It’s not quite obvious why measuring automation effectiveness is such a mystery to many marketers. Perhaps it’s the quantity of measurement data generated by advanced automation systems, the perceived complexity of automations or something else? The truth of the matter is, as with many things in life, that the KISS principle of keeping things simple, applies here too. With a few easy to understand and (usually) readily available metrics, you can draw a fairly precise picture of your automations’ performance and whether they are living up to your intentions.
With that said, before diving in, you should establish a baseline to neutralize other issues. Whatever the measurement, you need to make sure to account for other problems that may skew measurements. e.g. improper segmentation may mean you’re automations are sending the wrong emails to the wrong audiences, in which case many of the metrics below would show poor performance, regardless of the quality of your automation workflow. Here are a few things you should check for, that could clearly tint your measurements:
- Poor segmentation*
- Your current win rate and if it is acceptable - i.e. is the sales team doing its job?
- The level and scope of your content arsenal.
- Sales and marketing alignment (also known as SMarketing).**
- The reliability of your marketing automation software and the data it generates.
* A note about segmentation: Segmentation is a key component of automation, as a large percentage of automations will branch out based on pre-defined segments. As such, segmentation quality is directly related to automation performance, and measuring the effectiveness of your segmentations (for automations) is the key to measuring the effectiveness of your automations.
** A note about SMarketing: Bizibl (digital marketing blog and video site) tells us that “Only 24% of top marketers included alignment with sales as a priority for marketing automation”. They further say that this is a potential miss, and we agree. While the metrics we bring below are quantitative, if your sales and marketing teams are aligned, it is more likely that your marketing automations will be in sync with your sales efforts AND you will gain an invaluable source for qualitative insights regarding your automations, namely, your sales team.
Once you feel comfortable that you’ve eliminated pitfalls that could make your automation performance measurements less or non-relevant, feel free to start measuring!
First and foremost, you will want to check whether your automation software is being used, and, hopefully, being used right, otherwise you can’t expect any meaningful ROI. Moreover, you need to have enough activity to ensure that your sample sizes are large enough to obtain statistically valid measurements. A few key activity metrics you should be looking at are:
What: The overall volume of emails you send out to potential and existing clients.
You should expect to see a major uptick in your outgoing client email activity, as compared to the scope of activity prior to using marketing automations.
Number and Diversity of Automation Workflows
What: How many different workflows you have created and for which stage of the customer journey.
If there are a good number of diverse journeys (workflows), this is a sign that someone is putting in the effort to use your automations software.
To put this in context for you, SmartInsights, in a survey of over 500 industry leaders, reports that a whopping 44% of respondents said their firms use little or only the core features of the marketing automation software. Add to that 19% who don’t use marketing automation at all, and you have a fairly small minority who are really using their automation software. This means, that you have a tremendous opportunity to get ahead of the marketing just by increasing your utilization of your marketing automation software!
Optimal level of Activity per Workflow
What: Understand whether the level of activity for a specific workflow is right for the given automation.
Depending on the workflow, you should check that the activity levels make sense considering the purpose of the given automation, e.g. you will want to see a high level of activity for your conversion automations, while you will want to see a low level of activity for your cart-abandon automations.
What: Check the activity level for each of your segments.
If your segmentation is working, you should see an acceptable level of activity for each segment (“acceptable” is something you should define ahead of time and may vary greatly between segments). Thankfully, most email marketing packages make it easy to track your segments, including activity levels and other important metrics (a few of which are discussed below).
Engagement and Performance Metrics:
Here you find the more common metrics, which, with relative ease, will give you a good indication of how well your automations are doing.
IMPORTANT: All of the following should be measured on an automation level, and on a segment level, where applicable, to check if your segmentation is on the mark.
What: Whether your automated emails are being opened.
Everyone knows that an automated email, that looks like an automated email, is less likely to be opened. As such, this metric gives good insight to how well your automated subject lines and pre-headers (and, to a lesser extent, email bodies) are doing in terms of luring recipients to open them.
Click through rates (CTR)
What: Are your recipients clicking on links / buttons in your emails?
CTRs are an excellent indicator as to whether the segmentations underlying your automations are good estimates of recipient desires and behaviours. While a catchy subject line may entice someone to open an email, they probably won’t click through, or even read the mail, if it doesn’t speak to them directly.
NOTE: Low opening rates and/or CTRs are a great indication to employ A/B testing.
What: Check your traffic sources to see if it has increased, in comparison to traffic before you implemented your marketing automation solution.
Overall, if your automations are working, you should see a rise in traffic to your website. On a lower level, if you experience a spike in traffic after sending a specific automated campaign, try to copy the success with other campaigns. Oppositely, if there is a decline, try something else.
What: Check conversion and reconversion rates at different stages of your marketing funnel.
At the end of the day, if your automations are functioning correctly, your conversion rates should go up. Depending on the granularity of your automation software, you can either contrast your pre-automation, overall conversion rate (leads to wins) to your post-automation rate, or, with fine-grained automation tools, you can compare before and after conversion rates between phases of your marketing funnels, e.g.:
- Percentage registered that converted to marketing qualified leads (MQL).
- Percentage of MQLs converted to opportunities.
- Percentage of opportunities that were won or lost
A special, but very telling case of automation performance, are reconversions, i.e. prior customers who purchased again. Your reconversion rates inform you both on how your existing customer automations are working, as well as how good you are at collecting customer intelligence.
Return on Investment Metrics:
There are quite a few ROI metrics, and the aforementioned conversion rates, could be slotted in this category as well, but in the spirit of not overcomplicating our measurement processes, we’ll focus on the most straight forward ROI metric and the one that best portrays incremental value (in this case), top line growth.
What: The percentage growth in revenues, pre and post-automation.
The only thing you need to keep in mind here, is to compare apples to apples. You will want to try and focus only on those revenues related directly to your automations. Enlist the help of your bookkeeping team, if needed. Alternatively, you can take a 30,000-foot approach, and look at your overall revenue growth since implementing your automation system. In this scenario, its best to take a longer time period to get a meaningful evaluation.
Tracking performance is as fundamental to business success as production, distribution or sales. With marketing automations, however, it’s importance is compounded, as such automations occur “behind the scenes” and without explicitly measuring their performance, you may never know if they are helping, or, perhaps, doing damage. Using the simple, straightforward metrics described herein, will help you do just that. Moreover, once you start using these metrics, A/B testing between various automation options will become easier and yield more accurate results.
Source: Content Partner , Smartinsights
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