I’ve spent most of my career in a profession where the most common metrics are, all too often, difficult to track, difficult to find meaning from, and where success is typically denoted by activity and output rather than meaningful metric movement. That’s the reason I’m writing this: I want to talk about discovering, selecting, and presenting the metrics that actually show real progress.
My background is in lifecycle and multichannel marketing, and while there are myriad channels with similar metrics setups that I could just as easily walk through, today I’m going to use email as the poster child, because I think it’s by far the most relatable to a broader lifecycle marketing audience.
What do you typically think of when you’re trying to report on email marketing? Opens? Clicks? Unsubscribes? Bounces? Delivery rate? Click-to-open rate? Those are usually the first metrics that pop into your mind, and unfortunately they’re the ones most people are bound to on a lifecycle team. But have you ever associated email with revenue? Maybe, if you’re an e-commerce company. What about conversion? What about feature adoption?
You see, in most departments — but particularly in lifecycle marketing — there are two kinds of metrics: diagnostic metrics and impact metrics. And all too often, marketing operators find themselves reporting with diagnostic metrics instead of the ones that really matter: the impact metrics. So let’s dive into each type and the difference between them.
Diagnostic metrics
First up, diagnostic metrics. They provide context and direction for identifying an area of improvement, or for explaining why something else might be happening. They’re measured in terms of send volume, bounce rates, unsubscribe rates, open rates. These days they may seem like indicators of engagement, but an experienced eye will tell you open rates don’t mean a thing for your bottom line. An unsubscribe rate is probably one of the most boring things in a meeting with your vice president — unless it’s being used to diagnose why something more impactful is, or is not, happening. And that’s the point: diagnostic metrics show activity, but they don’t necessarily show progress.
Impact metrics
On the other side are impact metrics. Impact metrics have a direct effect on the bottom line of the company. Sometimes that’s actual top-line revenue, or incremental revenue that can be attributed to your activities — for example, email-attributed revenue. This one takes time to set up, because you’re not just relying on the metrics your email marketing platform gives you out of the box. You have to track traffic from email into your point-of-sale or sales ecosystem, and then reroute the attribution of that sale from email back into your email marketing platform. To be honest, not all platforms support this, and most teams have a hard time getting engineering resources to enable it. But revenue is an impact metric. Where there were no dollars, now there are dollars — and dollars are what keep us in business, not opens, not bounces.
Another impact metric — and the next one to reach for if you can’t get to revenue — is a behavioral conversion event: an action taken by the user inside your product or application. This could be as simple as logging in, opening the app after receiving an email, or adopting a feature you’ve been promoting; in other words, performing an engagement event outside of the medium that was sent and inside of your product. It could also be something like completing a profile. These sorts of conversion events aren’t purchases, but they are actions taken by the user after receiving your message — actions you wanted them to take, because they lead to further engagement, or eventually to a purchase. That’s an impact metric.
If you can’t get to revenue and you don’t have a custom conversion event in place either, the best engagement signal you’ve got left for a medium like email is click rate. These days even that’s getting harder and harder to measure, but unlike an open, a click actually shows how a user has engaged with a piece of content you sent them, and then left the domain of that content to go visit a URL or link you gave them, in the hopes that they’ll perform an action. And while clicks don’t always translate to purchases, clicks do translate to site traffic. Site traffic can be tracked and formulated into a bottom line in ways that diagnostic metrics cannot.
Find the impact metric — and use diagnostics for what they’re actually good for
The number one thing I tell lifecycle marketers who are looking to prove their value at a company — and the same thing I tell agency operators trying to prove their value to their clients — is this: find the impact metric. Do you know what it is? Do you have access to it? If not, figure out what you need to do to define it, get it, or to elevate and visualize it. Because without it, you can’t prove your value adequately.
I believe diagnostic metrics have their place, especially at the deep, technical level for individual contributors and the managers of teams like a lifecycle marketing team. But as you try to show progress and improvement from your efforts upstream at the company, diagnostic metrics are essentially just noise, and they won’t satisfy or answer any of the questions a CEO, CMO, or VP of Marketing is going to have.
So when you’re presenting upstream, lead with the impact metrics. Open with the revenue number, not the send volume. Stick the diagnostic ones in an appendix and only pull them out when necessary or additive — like when you need them to bolster or prove an impact point. Don’t waste time presenting metrics that don’t drive decisions.
Look at your ecosystem and ask yourself: what are my diagnostic metrics, and what are my impact metrics? And how can I build my measurement setup so impact is what gets surfaced, with diagnostics ready to explain movement when someone asks?