Why your sales funnel metrics aren't working

One of the challenges in online marketing is establishing the right success metrics for a campaign. In my experience, what makes this difficult for a lot of marketers is the temptation to apply the same success metrics to both the top and the bottom of the marketing funnel. As I thought about it more, I was struck by the strong similarities between marketing and baseball. Marketing is very similar to baseball, but with much larger sets of anonymous people involved, which makes the requirement for different measurement concepts harder to see. A major league baseball team would never measure a leadoff batter like they measure a cleanup hitter, so why do advertisers measure awareness and lead generation campaigns the same way?

Why your sales funnel metrics aren't working

Bottom line is that marketers must think like baseball managers and realize that both top-funnel and bottom-funnel tactics are critical for success. By creating distinct but symbiotic goals at the top and the bottom of the funnel, marketers will ultimately optimize the entire funnel experience.

In his book "Moneyball," Michael Lewis showed that baseball is pretty much a game of math -- much like marketing. In baseball, the tactics are clear: First you need a great leadoff hitter who is good at one thing -- getting on base. Thus, leadoff hitters are measured largely by what percentage of time they get on base (on-base percentage or OBP). To really score runs, however, you also need a hitter with power in the lineup to drive runs home. The hitter in the fourth spot is all about power and can "cleanup" the runners on base with home runs and other extra-base hits. However, you would never measure the cleanup hitter by OBP because getting on base is not their goal -- instead, the success of cleanup hitters is primarily measured by "runs batted in" or RBI. 

This relationship in baseball is symbiotic and each role is critical for success. A good cleanup hitter is focused on getting big hits, but needs people on base to be successful and increase his RBI. In turn, a good leadoff hitter needs to get on base (OBP), but can only score runs with a great cleanup hitter moving them around the diamond. The team wins when they are able to score runs more often than their opponent. Thus OBP and RBI are both the "right" metrics to measure and optimize for, but they measure the success of different objectives.

In marketing, this relationship is often less clear because the marketer is dealing with large prospect audiences -- some anonymous, others known -- that are moving through the funnel like a runner moves around the bases. Audiences at the top of the funnel may not be familiar with your brand, while those at the bottom are increasingly sales-ready. With these two distinct audiences, it's not in the marketer's best interest to use the same success metrics at both ends of the funnel. If marketers measure their top-funnel tactics (leadoff hitters) by the same metrics as they measure their bottom-funnel tactics (cleanup hitters), they will be incentivizing the wrong goals, which would drive fewer leads and reduce the overall effectiveness of their marketing efforts.

So now you see, marketers must think like baseball managers and realize that both top-funnel and bottom-funnel tactics are critical for success. They must become adept at using strategies to get runners on base (brand awareness to drive people into their top funnel) and then knock in runs (lead generation or direct response-focused initiatives to drive leads). Finally, they have to choose the right metrics for each part of their marketing campaign strategy to optimize for success.

What are those metrics? For top-of-funnel awareness, the goals should be to create targeted audience reach, prospect awareness of the brand, and a desire to learn more about what the company can do for them. This is best measured by lift in brand awareness, branded search terms, and user engagement on a cost basis.

For bottom-of-funnel lead generation, the success metric is the number of leads generated, and the marketer should be measuring the number of qualified leads they can drive for the least amount of cost. Both of these tactics are intertwined, so if a marketer stays clear of top-of-funnel programs, it will be much more expensive and difficult to ultimately drive quality, revenue-impacting leads out of the bottom of the funnel.

Driving (and measuring) awareness at the top of the funnel will ultimately drive the most leads with the lowest cost at the bottom of the funnel -- just like a baseball team creates the most runs with the fewest at bats. 

Think like a baseball manager to drive success across the marketing funnel!

Marc Yasuda is the VP of sales, West for Bizo.

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"Winning business plan - A paper funnel" image via Shutterstock.

 

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