How to Measure Marketing ROI with Matt Hertig

 

Shama TV: Episode 31

Shama sits down with Matt Hertig, Co-Founder of Alight Analytics to discuss how to measure marketing ROI.

 

Click here for the full transcript!

Shama: Hey guys, welcome to Shama TV. Today we’re shooting from the Dallas Digital Summit and we have with us our first guest, Matt Hertig, who is co-founder of Alight Analytics. We’re going to talk to Matt about one of our favorite topics – or maybe not so favorite topics – marketing ROI.

Matt: Yes, that is a popular topic.

Shama: Matt, you deal with this with your analytics platform. You answer these questions all the time. What do you think causes people such distress when it comes to marketing ROI and how to measure that in the digital age. What do you think the challenge is there?

Matt: I think the whole idea of marketing ROI has evolved, obviously, with the onset of digital. I think the pressure to demonstrate ROI has never been greater though. I think that businesses as a whole and organizations – and we work with large to mid-size companies really across the country – they really struggle with justifying the investment.

There’s really three core challenges that marketers face and so I’m pretty simplistic, I just like to talk about things in either twos or threes. If you think about your journey to go buy something, so let’s say you’re going to buy a computer.

Shama: I was going to say shoes, but we can go with a computer.

Matt: How about shoes, we can go with shoes. That’s even more relevant for you. Describe the process for me.

Shama: All right, If I’m looking for shoes I’m generally looking on Pinterest. That’s where it starts. I look at what my friends are sharing, what styles appeal to me. Then I’ll go look at websites, e-commerce sites. Like a Nordstrom or Neiman Marcus or some of my favorite stores.

Then I might go in the store to try – it just depends on kind of my time and my process but when I walk into a store I generally have a good idea kind of what I want. I’ve done my research. I know what kind I’m looking for; it’s mostly just a try on for size if anything.

Matt: So think about the challenge that marketing has, and this is really the first challenge: the multiple touch points that you are presented with and the multiple experiences to discover the brand, to research the brand, to engage and consider and ultimately analyze and buy, right?

That’s a journey that you just described. So think about the millions and millions and millions of individual journeys that consumers go on to try and make buying decisions. Well, they all experience different touch points, so it’s very very difficult if you don’t have a strategy to attack the journey.

The second problem is since 2008, and fast-forward to 2015, marketers have over 2,000 different systems in which to execute marketing. Think about that, 2,000 different systems. Now we as marketers, one thing that we really love is pretty things. So we get enamored by new software to do things better, faster, quicker. Well those 2,000 systems essentially create 2,000 different data ecosystems.

The ecosystem, as a data company we look at that as a very fragmented ecosystem. So you have this journey that’s pretty complex and I’m creating chaos on my data layer. Then we use these really powerful tools called Microsoft PowerPoint and Excel to try and mash all this stuff together to tell the story. So fragmented ecosystem, a complex journey, outdated tools and methodologies equal “I can’t answer the ROI question.” And that’s really where marketers are today.

Frankly, it’s the reality of what marketers deal with and I will tell you: I don’t think at any other point in time in history can marketing confidently answer the ROI question. So the question is how do I do it? You gotta break this problem into two parts.

First of all, data, right. I gotta get all this data together and frankly that’s why we built our platform called “Channel Mix.” I was one of those marketers. When my my business partner Michelle and I started the company we literally – we’re trying to manufacture this data as an analytics company, come on. We built this platform to really take data out of the equation, get it all together, make it talk, and then we could truly tell a story using business intelligence tools and other ways to really get us back to the decision-making process. And that’s where marketers have to be, they have to be back in the decision-making game and not in the data-gathering game, because if you’re not you’re never going to answer the ROI question.

Shama: Yeah, I think that’s great. You know I call this the customer journey, which you alluded to. I talk about this in my upcoming book Momentum.

Matt: Awesome!

Shama: We talked about how marketers have to find all those points where they can intersect. It sounds like what you’re saying is you really need to take all this data and have the right tools so you can tell the right story but you can also teach actionable…it’s actionable insight. It’s wisdom from data. It sounds like what we really need moving forward is good filters, because we have the data, and how do we have the right filter that allows us to make good choices about where marketers spend their money; where we feel like we’re getting the most ROI.

Matt, let me end with this: for marketers who say or, you know, really CEOs across the board: “What metrics should I be looking at?” We know that’s obviously different by business and industry and so forth, but at the end of the day what would you be looking at to say, “Hey, my marketing is working or not working?”

Matt: That’s a great question. So the first thing marketers need to do is change the thinking. When we think about metrics we think about things like clicks and click-through rate and open rates and impressions and shares and followers, right? And those are all metrics.

The first thing that we have to do is change our thinking about what is meaningful. Historically we’ve always looked at what I would say is conversion, right? So what are the conversion metrics that I want, because ultimately that’s where I’m monetizing the value of marketing, and we try to tie that to individuals. “Well you came, you clicked, you converted on email.” “Oh I saw this pay search ad, and I clicked and I converted.”

When we do that what did we just ignore? The entire journey. So we have to stop looking at one-to-one actions and start looking at behaviour. When you think about behavioral metrics, the thing that I always tell marketers is: metrics on their own are meaningless, so you have to put it into a context.

We preach really a three-phase funnel which is awareness, engagement, and impact. You’ve got to deliver all of those metrics in context so that you can capture and isolate what’s happening in the journey that you’re creating for customers because that’s ultimately marketing’s job is to craft a journey that’s efficient and effective that ultimately yields the greatest ROI.

When I take those metrics and I look at things like how many impressions does it take to get business to my site? How many visits does it take to get a conversion? How many clicks does it take to get to a conversion? Those are the context metrics that you need to frame up your measurement strategy around, because the reality of it is your business, my business, anybody else’s business is going to yield some different sort of metrics.

My encouragement though is put it in the context. Put it in the right structure in which you are accounting for every touch point so I know how many impressions I’m creating in the marketplace, to how much engagement that’s yielding, to how much conversion and impact that’s actually having. When I do that then I can discover ROI.

Shama: Thanks so much, Matt, for sharing your insights on marketing ROI. I think it’s a great topic especially as we go into 2016.

Matt: Thanks for having me.

Shama: Alright guys stay tuned, there’s lots more marketing and business information coming your way. Be sure to subscribe!

 

–Episode Links–
Alight Analytics

 

–Episode Tweetables–

The customer journey has a variety of outcomes. Create a strategy to be successful in #marketing. @Shama @MattHertig shamahyder.com/SosLA Click To Tweet #marketing in a fragmented ecosystem & a complex customer journey makes it challenging to predict ROI. @Shama @MattHertig… Click To Tweet #Marketers need to be in the decision making game, not in the #data gathering game. @Shama @MattHertig shamahyder.com/SosLA Click To Tweet #Marketing metrics on their own are meaningless, you have to put them into context. @Shama @MattHertig shamahyder.com/SosLA Click To Tweet To build a customer journey with a successful ROI, you need to tell the right story using actionable insight. @Shama… Click To Tweet

 

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