Lately I’ve been helping clients set up metrics-driven processes for marketing.

This is different for every company, of course, but the more I go through this the more I firmly believe one thing – You have to be careful what metrics you track.

I say this because what you measure determines how you spend your time and how you perceive your progress. These are two very important things for an employee and the company that employee works for.

Little Rocks and Big Rocks

Increasing the open rate on your startup’s newsletter by 20% sounds great. If there are ten people on that list, who cares?

Most startups should focus on what I like to call “big rocks.” Instead of improving the open rate on a tiny email list, you should think about how to make that tiny email list a big email list. Then optimize.

I’m not the first one to mention a concern along these lines. Mixpanel CEO Suhail Doshi wrote about “bullshit metrics” a while back, and others have discussed the importance of being metrics-focused, rather than blindly metrics-driven, in product design.

However, I don’t think people have explored the issue of measuring the wrong stuff from the marketing perspective before, and we need to open up that discussion.

Where the Confusion Comes From

In my view, there are three things responsible for the little rocks rat-race.

1) Content Marketing

Modern startup marketers, especially young startup marketers, learn a lot by doing. They also learn a lot by reading blog posts.

If you don’t know something, what do you do? You Google it.

Most blog posts and case studies focus on optimization or 10 little things you can do to get ahead. These things are insanely helpful if you’ve built up a baseline of traffic, subscribers, or signups. If you haven’t done those basic things yet, not so much.

The startup community needs 100 more blog posts like this one, which is a long and detailed account of how Harry’s grew their email list to 100,000 subscribers from the ground up through a referral campaign.

It takes a lot of time and coordination to write a post like that, though.

With the never-ending pressure to produce a new blog post every day, few content marketers have the time, resources, or motivation to pull this off. As for the ones who do, they usually do because that content will ultimately be put behind a landing page form or paywall. Therefore, the chances of it crossing the newsfeed of the person who could learn the most from it are pretty small.

2) Marketing Tools

To save money, startups usually go for the free or low-cost marketing tools for each channel.

You have this for email, that for forms, another thing for social media publishing, and then this CRM for sales.

Each separate tool offers its own set of metrics. Those metrics are typically “little rocks.”

These systems don’t speak to one another out of the box. Therefore, the marketer has to role up her sleeves to pull it all together, get data from these systems or other databases, and start analyzing and acting on the “big rocks.”

Marketers have to do stuff like:

  • Let the strategy and business model drive the metrics, not the tool
  • Know what integrations are necessary to get those numbers
  • Gain buy-in for budget for upgrades (usually integrations require this)
  • Gain buy-in for engineering time to perform integrations (sometimes necessary), build internal dashboards, or track events
  • Talk to engineers and product managers in a productive way
  • Have a sense of the marketing software space and know when/if it’s time to invest in an all-in-one system like HubSpot, Marketo, Pardot etc.

A lot of startup marketers don’t know how to do these things because…

3) Lack of Experience

Oftentimes, the first startup marketer is someone like I was as the Community Manager at oneforty.

I was 23, I loved social media, and I was still riding the post-grad high of finally being paid after years of unpaid internships and waiting tables. I feel like adding that I lived in a three-bedroom apartment with four other people and two cats, and that I painted my bedroom Twitter blue, aids in this description.

I was clueless about a lot of things. (And still am!)

I took the metrics that Google Analytics and Mailchimp gave me at face value. I followed along because I didn’t know any better. I thought a lot about pageviews and open rates in those days. I didn’t have a bigger strategy to drive my metrics or daily tasks with.

I had, seriously, no idea that “gaining buy-in” or “selling ideas internally” were things you had to do at work.

I came from a PR agency and had never worked with engineers or product managers before. I didn’t understand the concept of product roadmaps or sprint planning. My perspective on work was more “We’re staying late/making the time because the client needs this” vs. “Is there engineering time for this integration in this sprint?”  This lack of professional maturity and finesse prevented me from effectively advocating for engineering time.

I share all of this not to be unnecessarily self-deprecating (I did the best I could for who I was at the time) or to make my oneforty co-workers seem like pains in the asses (they were awesome).

I share this just to give people insight into why startup marketers – young ones in particular – measure what they measure, and why they spend time doing the things they do.

I think if we understand where employees are coming from, we can correct the course with a more diplomatic approach, and then we actually have a shot at fixing these patterns.

Progressing to Measuring Big Rocks

This is how I think about measurement:

Core Business Metrics (Big rocks!)

You have your core business metrics. Those are things like deals, revenue, and active users.

A Second Layer (Big rocks, too!)

Then you have a second layer of metrics that directly drive those metrics – leads, opportunities, logins, downloads.

You should spend most of your day testing things that you think will increase the numbers in the second layer. The core business metrics are the result of that.

The Cheap Seats (Little rocks that can be a helluva great time if approached the right way!)

Once you’re thinking broader than that and doing stuff like measuring Twitter followers, you should do that in the context of testing as well.

Are you focusing on that because you think it will increase something in that second layer? If no, then why?

It’s kinda like playing pool. You’re guessing that by pushing this metric forward, you’re going to knock the one if front of it forward, and then that’ll knock the one that’s in front of it forward, too… into the pocket!

A Caveat

Marketing isn’t this perfectly linear thing.

For example, a PR campaign today won’t necessarily directly drive more sales this month. The payoff from “awareness” is a groundswell of many touch points overtime.

But, it can drive more of those second layer metrics – like site visits or email subscribers – which have a more direct impact on sales. So even if marketing isn’t perfectly linear, it’s no excuse not to communicate the broad vision for how all these different marketing activities fit together.

This Approach to Measurement Should Help You:

  1. Tie everything you do back to revenue or other important metrics.
  2. Take on a mindset of testing.
  3. Organize your day around doing productive things for the right reasons because they are done with a metric or end goal in mind.
  4. Know why you are spending time on the things you’re spending time on.
  5. Identify the metrics you need based on a business strategy, rather than defaulting to what the tools give you.
  6. Find the marketing tools that fit the strategy and make a stronger case for engineering time if you need it.

I hope this post helps demystify the wild west of metrics for at least one young startup marketer out there. I’m happy to answer questions or respond to feedback in the comments – they’re all yours!

2 Comments on How to Focus on the Right Metrics for Your Startup

  1. Daniel Beachhead
    November 18, 2014 at 2:57 am (2 years ago)

    Hi Janet,

    Great post. You’re so right about people getting stuck on the pebbles and ignoring the rocks. We’ve also noticed this and are trying to create a course for marketers that’s focused on metrics used by a CEO and CFO, in an effort to help them get more traction in the C-Suite.
    It would be great to get your thoughts on what we’ve done so far?
    Thanks
    Dan

    Reply

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