Rigid Key Performance Indicators (KPIs) that kill creativity and innovation aren’t as effective as they seem on paper. For instance, common metrics like web traffic and content engagement kill creativity fast. It’s hard to come up with new ideas when you’re locked into getting a certain number of people to click a “like” button. In fact, 85% of marketers say that focusing on these short-term metrics stifle their ability to innovate, and many say unrealistic goals have eroded team morale.
In most companies, marketing KPIs burn employees out and prevent meaningful goals from being achieved. When employees are focused on hitting numerical targets, they don’t have time to do the work that really matters (most of which can’t be precisely measured in a single KPI). By setting the right KPIs and assigning them to the right people, you can avoid these problems in your organization.
Here’s how it’s done.
1. Empower your CMO to design balanced marketing KPIs
Your Chief Marketing Officer (CMO) should be setting the targets for your team. Without their input, you risk setting metrics that clash with the company’s long-term vision. Your CMO should map KPIs across all stages of the customer journey (awareness, acquisition, and retention). This ensures that early-stage metrics like reach feed seamlessly into later metrics, like customer value.
Your CMO should also lead a meeting where your marketing, sales, product, and finance teams work together to create targets that align with business outcomes. By placing your CMO at the center of KPI development, you’ll add balance to your goal-setting process. And if you don’t already have an in-house CMO, hire a fractional CMO to get the job done. You’ll get the same high-level expertise at a fraction of the cost of a full-time salary.
2. Recognize when marketing KPIs backfire
Some KPIs feel like micromanagement and others create a sense of dread. Avoid creating KPIs that are tied to tedious, minor tasks that make reporting feel more like surveillance. Instead, focus on outcome-based KPIs that give teams autonomy over how they achieve their goals.
Make sure a good portion of your KPIs are rooted in purpose-driven outcomes like brand affinity, customer satisfaction, or community impact so your team stays connected to the company vision. And when employees reach their goals, give verbal praise to boost their motivation. Financial rewards seem nice, but most people prefer praise over bonuses, and it’s also more effective.
3. Set KPIs that connect sales and marketing
Sometimes your sales and marketing teams need shared metrics, like a small set of KPIs that measure results related to a funnel conversion rate. Having a handful of metrics that span the funnel from initial contact to closed deal will ensure both teams move in the same direction. For example, you can track the percentage of marketing qualified leads (MQLs) that become sales qualified leads (SQLs) and then the percentage of SQLs that close.
Most importantly, don’t just give one team marketing KPIs they don’t fully own. Attribute a portion of revenue-related KPIs to various marketing touchpoints, like email, content, and ad clicks. Sales will track the final sale, but marketing is responsible for the influence, which makes both teams accountable for shared metrics.
4. Know when a KPI kills effective strategies
Marketing KPIs are supposed to be measurable values that demonstrate how effectively someone achieves their objectives. For example, a simple KPI might be the cost per click (CPC) in a paid ads campaign. CPC measures the amount of money paid each time a user clicks an ad.
If the goal is to optimize the cost of customer acquisition, most companies would want to see a lower CPC. But aiming for low CPC ignores the fact that paying more can generate better customers who provide a higher lifetime value to the company, remain loyal, become repeat customers, and bring in referrals. A marketing team expected to lower a campaign’s CPC no matter what won’t be able to run creative marketing campaigns, and their ability to innovate will be extremely limited. It won’t be long before they’ll find another job.
5. Use innovation-centered metrics
A McKinsey survey of product managers found that organizations that track their idea kill rate and time to market alongside revenue see 20% higher success with new products. Introduce a few new KPIs related to innovation, like the number of validated hypotheses, experiments run, or prototypes built. Align these KPIs to whatever your company creates.
Master KPIs to boost morale and results
Poorly designed marketing KPIs can stifle innovation and crush morale. By empowering your CMO to create balanced targets and anchoring metrics in what matters, you’ll drive better performance without sacrificing the creative spark that fuels amazing results.
Photo by Carlos Muza; Unsplash
