Measure From The Inside Out

One of the big challenges every marketer faces is how to measure the impact of your promotional investment when you have a limited budget to begin with. Comparative heavy-up tests where effort in a region of the country is doubled and the results compared with a comparably matched region are simply not a cost feasible option. And yet, management and/or your Board expect you to be able to present a convincing argument that you are generating a return on investment.

It is time for inside out thinking.

Start with your sales funnel and work your way out. Your responsibility is to demonstrate a connection between your promotional tactics and sales results. At a minimum, you need to make the case that the investment has a reasonable potential to positively impact sales outcomes.

The sales funnel and marketing funnel are simply two sides of the same coin. Once you map one to the other, the exercise becomes easier.



Tactics that focus on creating awareness help generate unqualified leads. Once a lead is qualified then the focus becomes creating interest. Finally, when interest has been successfully established it is time to convert that interest into desire. In the packaged goods world desire looks like a product trial and ultimately usage. In the world of economic development desire looks like a request for proposal.

With that paradigm in mind, the task of defining in-process measures (aka output measures) becomes rather intuitive. Remember, the overriding reason to bother measuring anything is to make decisions and take action. So careful consideration should be given to exactly what will be measured and it should be clear that moving the measurement in a specific direction will result in a desired outcome. Sometimes, focusing on a specific measure may have unintended organizational consequences. For example, in economic development simply focusing on increasing the number of unqualified leads could result in a drop in overall deal flow efficiency as the system gets clogged with a large number of high risk capital investment opportunities. Conversely, focusing only on the conversion rate of unqualified to qualified leads could result in too few unqualified leads being entered in the top of the funnel.

Typically a series of in-process measures is defined and a set of actions is pre-determined if the measures get outside of tolerance (up or down). For example, if the conversion rate gets below a specific threshold, then an evaluation of the lead capture process is executed to determine how to enrich the unqualified lead pool with higher potential opportunities (e.g. more leads in a specific target industry of strength for the community).

The benefit of connecting every marketing tactic to the sales funnel is that it forces a dialogue on the underlying strategic reason for deciding to invest in that tactic. For example, a push email campaign to create awareness of a community could be measured on the number of emails opened. Focusing on increasing the opening rate would lead you to make a decision on the usefulness of your email list. Or you could also measure the number of people who followed through on the call to action in your email. If that number ends up being too small, it would lead you to find a way to create a more compelling call to action. Whatever you measure though, you need to be able to answer the question – “What am I going to do different if I don’t like the results?”.

In another blog post, I shared a model illustrating how to map tactics to the marketing funnel. The next step is to map them all the way through to the sales funnel. If you invest in advertising to create awareness you should be able to measure its impact on creating unqualified leads (either through a pre and post quantitative assessment of perception or by measuring the follow through on the call to action in your advertisement). For your website you could measure visits or you could measure the number of times a specific page with sales information was accessed or a PDF with data about your community was downloaded.

The ultimate decision on what to measure and why is very important. So much so that I am in the process of authoring an eBook that will provide some additional guidance on how to think about the process and will include some tools to help you create a good dashboard of actionable measures to track.

Different Tactics For Different Segments?

One of the more interesting implications of this inside-out approach is it challenges you to consider a different tactical set for each segment in the sales funnel. For example, rather than send the same promotion to everybody, should you have a specific campaign for generating unqualified leads that is different than your promotional efforts to qualified leads? In packaged goods you often find marketers segmenting promotional investment based on consumer interest/loyalty. In general, the more interested a person is in your product the more information you can share and the more customized the experience you can provide. In economic development, I believe a strong case can be made that it is no different. You should be able to provide more information about your community and a better-customized experience to a qualified lead than an unqualified lead. The net result should be an increase in the conversion rate of qualified leads to RFPs.

What Do You Measure?

I’d love some feedback on what your measurement dashboard looks like. Have you carried through your marketing tactics to the sales funnel? Has this influenced the internal discussions you’ve had on which tactics make the most sense to invest in and why?

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Category Measures, Place Brand Building, Promotion

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