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Measuring marketing ROI isn’t all about conversions

Google’s Julie Krueger opened her session, “The Marketing Measuring Mandate,” at the National Retail Federation’s annual trade show with a crack about how she’d wondered whether anyone would show up to a talk with measurement in its title.

And let’s face it: Measuring in retail and marketing is like medicine, or broccoli or going to the dentist, or name your own childhood phobia. Everybody knows it’s good for them, or their business anyway, but nobody really cares for the process.

But Krueger is that nagging voice in your head telling you need to do what’s good for you.

Google's Julie Krueger presents at NRF with Home Depot's Dave Abbott

Google’s Julie Krueger presents at NRF with Home Depot’s Dave Abbott

“I’ve been in marketing for most of my career,” Krueger, Google’s retail industry director, told a crowd at the Big Show in New York. “I’ve actually been a long-timer who thinks measurement is critical to what we do, because I never liked to be called that person who does marketing, that soft thing, because that’s not what marketing is.”  

No, marketing is no longer a soft science. Marketing professionals need to prove themselves, not just as creative geniuses, but as contributing employees who help boost the bottom line — in tangible terms.

And why not measure? The idea is so beautiful: You want to try something new, say on a website. You roll out the change and see what happens. You have a test group and a control group. The change either helped you toward your goal, relative to the control group, or it didn’t — so, bingo, you know exactly what to do.

Tests can be tough

But tests are messy. You need to have enough data for them to be valid. You have to make sure that external factors — changing inventory or prices or design elements — don’t crop up and skew your results. And you have to make sure you’re testing for the right thing.

That’s where Krueger, who presented with Home Depot’s Dave Abbott, wants to help. Short story: Krueger wants to remind retailers that it’s not all about revenue and conversion, at least it’s not always all about revenue and conversion. And that means retailers need to look at different metrics, depending on where a customer is in the buying process.

Along the way to a purchase, there are plenty of indicators that will tell you that your programs are effective, as long as you are clear about what each program, campaign, promotion etc. should accomplish and how best to measure that.

Sure, Krueger said, the bottom line is that revenue is the bottom line, but it is not key at every stage of the buying process — stages that come well before a consumer buys anything and continue on, even after the purchase. By finding the right things to measure at each stage (which I’ll get to in a minute) you build conversions.

“The importance of going after the other stages,” she said. “Is that you’re going to build a bigger funnel of customers.”

A remake for an old funnel

Without saying so exactly, Krueger proposed an alternative to that fusty old funnel. You know, awareness, opinion, consideration, preference, purchase. Instead she goes with four categories that outline buying stages, the people in them and the goals retailers have regarding them. Krueger’s stages are below.

  • See: This is a retailer’s total market. In Home Depot’s case, it’s those who have a role in home maintenance, whether it’s doing it or influencing it. At this stage, a retailer should be looking at building brand affinity and awareness. This is a stage to measure interactions with your content, social shares, amplification and new visits. Krueger pointed to AT&T’s YouTube Summer Break campaign to attract millennial customers. The campaign resulted in a YouTube channel that has nearly 440,000 subscribers, more than AT&T’s brand channel (with just over 80,000), Krueger said. “It’s entertainment and content that consumers are loving,” she said.

  • Think: Consumers are thinking about buying. They’re getting closer; thinking about what their life would be like after the purchase. This is a time to go a little deeper and help them imagine or inspire them. For example, Krueger said, there is Target’s YouTube channel, which features videos of home style expert Emily Henderson taking viewers through refreshes around the house. This is a phase during which to measure things like click-throughs, watch time or how deep into a page a reader goes. You’re moving consumers along. You don’t want them to bail, so bounce rate could be a key metric.

  • Do: Consumers in this category are ready to buy. You want to make that as easy as possible. Office Depot, for instance, helps engaged shoppers when they turn to mobile by showing browsed products available at nearby stores, including the price and directions and store hours. “Easy access to this type of information,” Krueger said, “is the path to the front door.”  OK, here you can look at conversion. But, Krueger says, don’t look at conversion alone. Consider measuring customer loyalty, checkout abandonment and measure the profit generated through various efforts at this stage.
  • Care: This is what you do after the sale. Krueger talked about Target’s Cartwheel, which offers personalized recommendations based on purchases. She pointed to the do-it-yourself videos on Home Depot’s YouTube channel that help customers put the store’s products to good use. This kind of content is directed at loyal customers. “These are the people who keep coming back. They find value in your brand. They find value in what you provide and they keep coming back.” Krueger said retailers should not hold their care-stage metrics hostage to that immediate conversion. Instead, she said, look at lifetime customer value, repeat purchases and the likelihood the customer will recommend your store and or website to others.

Of course, the See, Think, Do, Care model is not a silver bullet, though all marketers wish there were such a thing. It still requires a thoughtful approach and, as Abbott pointed out, a coordinated and focused effort by teams throughout an organization.

But the model is a way of thinking that creates a logical way for marketers to be accountable for their actions and for them keep doing what’s working and stop doing what’s not.

Photo of Krueger and Abbott by Mike Cassidy.

Mike Cassidy is BloomReach’s storyteller. Contact him at mike.cassidy@bloomreach.com; follow him on Twitter at @mikecassidy.