2019 was a stellar year. All the clients that we worked with for the year achieved solid, and in some cases spectacular (200%+) growth. Given many of our clients have been with us for years, how we are achieving continual growth is as important to us as the growth itself.
Here are three major factors in the growth we were able to drive in 2019:
1. Using business metrics, not marketing metrics
While many, if not most, companies focus on marketing metrics to assess the performance of their marketing program the truth is that there isn’t a single marketing metric that consistently correlates to profit. Not one. Marketing metrics, whether unique visitors, cost-per-click, impression share, followers, or even the number of sales-qualified leads are not good or bad in their own right. They all need context to know whether they are good or bad when judged against profitable outcomes. We call these “local optima”, and they should not be ignored but rather handled based on the bigger context of profitability and never as a proxy for profit.
2. Using deep financial and customer data
So many companies own valuable data, but somehow only wind up using it for reporting. Such a waste! Customer data on value, profit, retention and more can be invaluable for modeling and decision making at the ad placement and media buying stage. In creating predictive models based on the financial results of advertising, we’re able to use this deep financial knowledge for decision-making every day. This results in highly efficient and predictable advertising, as it relates to the only thing that matters for a viable business: financial success.
3. Better targets with better execution creates a competitive advantage
We spend a lot of time (more than anyone we know) talking about target cost of acquisition. New clients are sometimes surprised when we push back on their CAC target or other acquisition metric, but we know that one of the worst things any company can do is have a flat, one-size-fits-all, average target for the cost of acquiring customers. You customers aren’t all worth the same amount, so why pay the same amount to acquire them? Companies often short-change the process of good target definitions to their detriment. Targets need to be based on financial data and tailored to the business model, otherwise they are not only inefficient, but potentially dangerous to the health of the company.
Bonus factor: Not being a slave to data
I’ll add one more factor that sometimes seems odd coming from a highly data-driven and analytical company. That is to not be a slave to the data. One of the most interesting questions we ask is, “What is the data not surfacing?” Having a holistic view of our clients’ financial picture and not being tied strictly to imperfect in-channel tracking has allowed us to identify gaps in tracking caused by technical issues, multiple devices, and user behavior. This has surfaced so many opportunities over the years that thinking of Out-Of-Channel effects is an everyday discussion here, and that always has a big impact.
As an Agile company, we focus on continual improvement and hopefully this article has provided a glimpse into that mindset. We have high expectations and hopes for ourselves and our clients in 2020. We hope you have a great year, too, and are always happy to chat about digital marketing. Happy 2020!