Why KPIs Lack Insight and What Marketers Can Do About It

I have a love-hate relationship with KPIs. When done right, they are mission-critical to defining success and can focus the organization on the right priorities. When chosen poorly, KPIs can be disconnected with ground realities and be a constant source of frustration for team members trying to impact them.

I have a love-hate relationship with KPIs (key performance indicators). When done right, they are mission-critical to defining success and can focus the organization on the right priorities. When chosen poorly, KPIs can be disconnected with ground realities and be a constant source of frustration for team members trying to impact them.

However, poorly designed KPIs are not my primary gripe, at least not in this post. My main concern is that even well-designed KPIs are simply not deeply insightful, but they are often used as if they are.

Well-designed KPIs are full of contradictions. On the one hand, they are expected to be simple, easy to communicate, and intuitive. On the other hand, they’re expected to provide actionable information and be a reliable measure of important success criteria.

Anyone who has worked on developing KPIs knows that it is a game of balance and compromise, based on business objectives. The need for actionable information battles with the desire for simple metrics. The desire for intuitive metrics battles metrics that push status quo thinking or properly reflect the diversity of business interactions.

After many years working with and helping clients identify KPIs, I have found ways to manage their dichotomous nature, but never overcome it. If there is a brilliant mind out there who has solved for this, I would love to hear about it. For now, I will assume that this dichotomous struggle is a law of nature.

This leads me back to my main point. Marketers need to stop viewing KPIs as major source of insights. They are, as the name illustrates, only “indicators.” While this seems like an obvious statement, it is surprising how often KPIs have become the primary source of insights for most companies.

Take digital analytics, for example. Most companies using the web analytics platform use default metrics, such as clickthrough and page views, as their primary measures to understand web activity. While these metrics may indicate increased interest in content, they rarely tell you how satisfied the visitor was with the content or how valuable it was in decision-making. It is rare for companies to set up custom metrics and reporting, which might provide better insights. It is even rarer for companies to download raw web data into a data management tool and truly analyze visitor interaction with content, even though these solutions exist. Instead, most companies use the default web KPIs to derive custom insights into behavior on their website.

Another example can be found about how companies use social channel data. There are some great social analytics tools out there. When I come across most implementations, however, they are mostly set to track high-level sentiment analysis and rarely deliver deep insights. However, the underlying data is often volumes of highly informative, unprompted, free-form feedback. It has the added benefit of being free of interviewer bias or agenda-setting.

Recently, I was working on a project for a client that viewed their products as very innovative. Yet, when mining nearly 1,000 instances of social data, we found only one unprompted mention of innovation. Upon further investigation, we found that innovation was meaningless to the consumer. Instead, it was performance, excitement, and fun that consumers talked about most often. The customer was conveying what innovation really meant to them, while the company was still thinking in terms of engineering sophistication. This insight was un-minable from the standard social KPIs. Even traditional survey-based market research may not have captured this insight, as it would have relied on coming up with the right questions to uncover this disconnect between the company and its customers.

These examples demonstrate the need to dig deeper for better insights and I risk the label of “Captain Obvious” by making this assertion.

So, let me add to this. Well-designed KPIs, because of their simplicity and action orientation, often lull us into overestimating their insightfulness. This link is unconscious and habitual.

When I have asked marketers “What is your (Social, Web or Customer) data telling you?” A common response is, the (relevant) tracker is telling us [fill in the blank].

In reality, the answer to the question is rarely found in the tracker or KPIs. Even if they can point to a KPI that is helpful, the underlying explanation is still often conjecture or a hypothesis. In fact, the better aligned the KPI story is with commonly accepted wisdom, the more likely it is to be seen as data-driven thinking.

In other words, we find an interesting KPI trend and create a believable story around this trend and that becomes data-driven thinking when it is still just conjecture. It takes great discipline to put on the brakes and look for deeper and corroborating evidence and that is what KPIs really calls for.

I want to make clear that this post is not advocating for the elimination of KPIs. They are very helpful tools for aligning the organization and most of us understand that they are only indicators. When done well, however, they are insidiously brilliant at creating the illusion of deep insight; especially if the resulting story is a good one. Truly data-driven marketers should be aware of this and be ready to dig deeper before letting a KPI drive strategic decisions.

Great Marketing Starts With Powerful Insights: Here Are 5 Rules to Find Them

All inspiring marketing rests on a powerful, catalyzing insight. Most marketing misfires stem from a miscue masquerading as an insight. As the starting point for any innovation, communication or experience effort, nothing is more foundationally critical than a sound insight for staying on-target as work progresses.

All inspiring marketing rests on a powerful, catalyzing insight. Most marketing misfires stem from a miscue masquerading as an insight. As the starting point for any innovation, communication or experience effort, nothing is more foundationally critical than a sound insight for staying on-target as work progresses.

If an insight is even two degrees off at the start, by the time you’re reviewing work weeks or months down the road, you’ll likely be miles off the mark. So getting the insight right from the outset is essential to developing resonant marketing and avoiding the agony of round after round of unproductive work.

As a recent case in point, we have two examples of brands that tried to take on the issue of the polarized, strident state of our social reality: Pepsi and Heineken.

With its Kendall Jenner ad, Pepsi showed the quasi-celebrity resolving social crisis by opening a can of cola.

https://youtu.be/dA5Yq1DLSmQ

In World’s Apart, Heineken showcased pairs of people with wildly divergent views discovering they could talk calmly and reasonably to each other.

https://www.youtube.com/watch?v=8wYXw4K0A3g

The Pepsi work was instantly and universally panned, leading to its embarrassing and equally instant withdrawal. The Heineken work was widely viewed as thought-provoking, moving and appropriate.

While it’s easy to pick on a variety of issues with the Pepsi ad (as so many have done at this point), I believe that the difference in the success of the two efforts comes down to the difference between how well the two brands adhered to what I consider these cardinal rules of good insights.

1. No Room for Wishful Thinking

One of the worst — and most common — sins of insights is allowing wishful thinking to creep into the mix. I shudder to think how many times I’ve sat with a brand manager who showed me a positioning statement containing an insight along the lines of, “I wish there were a breakfast cereal that was healthy AND tasted good.” This is an insight pre-engineered to invite the circular brand promise, “Only Toasty-O’s are healthy AND good tasting!” You’ve got to tune your BS meter to 11, rigorously sniff out any trace of self-delusion, strategy or aspiration, and stick to reality.

3 Success Factors to Insights-Driven Automation

Most marketers do not have a technology problem. In fact, we’ve crossed the chasm of a few years ago, when technology could not keep up with marketers’ vision of customer engagement. Now, we have so much technology, we can’t utilize it strategically and we struggle to integrate it.

Most marketers do not have a technology problem. In fact, we’ve crossed the chasm of a few years ago when, technology could not keep up with marketers’ vision of customer engagement. Now, we have so much technology we can’t utilize it strategically, and we struggle to integrate it.

At the same time, marketers do not have a data problem. There is more data than we can manage or use wisely.

Marketers do have an optimization problem when it comes to using their technology and data to generate meaningful insights. Many of us struggle with how to prioritize our integrated marketing technology, practices and teams in order to generate the kinds of insights (a key output of many of our technology and data solutions) which will move the needle for the business.

There are three factors to this challenge.

  1. Analytics must be integrated with campaign management.
  2. Content must be created to solve problems.
  3. Insights must be scored and prioritized.

First, We Have to Get the Analytics Closer to Our Outbound Messaging. Personalization is the key to successfully creating relevance for each customer, so the analytics can’t happen off to the side. It has to be integrated with our IMM/campaign management solution so that each customer and prospect will be connected with content that is important, and available at a time that will resonate.

We can pretty easily automate our marketing response to insights. Programmatic buying has been around for many years and is expanding beyond search to Web display, ad re-targeting and campaign management (outbound) solutions. The rise of the DMP (or DSP)—platforms which allow utilization of consumer data across websites—provides great benefit to marketers looking to serve customers and prospects as they interact with any combination of owned, earned and paid media. This is helping us identify the anonymous and known people in our marketplace. Yet, the insights from interactions with branded messages across the ecosystem are not yet accessible fast enough or completely enough to allow marketers to be nimble in serving customers. We have to get these programmatic insights back to the main IMM “hub” and the campaign messaging platforms.

We need automation to also serve the process. Marketing operations efficiencies like workflow and social CRM require these insights at scale. While truly integrated IMM on a single platform is nirvana, the marketing technology landscape is huge. Real engagement often requires a few tools that will work together.

Second, Our Content Creation Machines Have to Focus More on What Sells and Our Brand Purpose. Too much content is created simply because it’s interesting. That is not a high enough bar. If your product is water, then the content needs to be all about fire. Content has to create need and speak to the “Why” of what you do, not the “What.” Why brands produce a product is usually about vision, value, need and satisfaction. Look at those heartwarming Super Bowl ads—do Dove products make you a better dad? No. But the brand is about being true to yourself and to celebrating your own personal values. So the advertising content worked.

If 2015 has a theme in marketing, it’s got to be personalization. Of course that means something different now than it did 10 years ago, when we first started really considering what is possible with custom-branded experiences. Effective personalization now means curating the content that will resonate with each customer’s individual needs. Automation technology makes this possible through content blocks and integrated native advertising units.

Third, We Need More Discipline About the Types of Insights That Will Help Us Do More Effective Marketing. I’ve always found in marketing analysis that certain demographics have clear preferences in tone, pace and language when interacting with a sales rep or brand. We can capitalize on these preferences to increase sales and connect the right rep with the right type of customer.

One way to solidify the discipline is to have some sort of mantra or brand promise that is very clear, and so all analytics work can strive to generate insights that are true to that brand promise. Remember the Coca-Cola’s Content 2020 Manifesto? Auditing your landscape of opportunity and focusing on the areas that have the most impact on revenue and market share will help you identify the kinds of insights that are most meaningful for your business.

Granted, this task is complicated by the fact that much of our data is channel-specific and measures the effectiveness of campaigns against previous campaigns. We need more insights around the impact and engagement of individual customers. Silos are still present, and organizational structure can severely limit marketers’ ability to learn about the customer-level engagement. One way to bring the team together is to score insights as they are applied to the business (much as we score leads). Did this move the needle? Have we improved our reach or response? Are key audiences engaged? It’s not just a volume game, but an engagement game with priority, high-value customers.

With these three success factors in mind, marketers can use the technology they have in a test and learn methodology to help better understand how automated insights can grow the business. Once the key drivers are identified, we can start to also assess current technology and pare down the options for improving the integration and efficiency of your organization.

Are you automating the use of insights that help personalize the customer experience? Please share your success factors in the space below.