For our tiny agency, data is our best friend and worst enemy.
We’re mostly referral driven so in a sales process, I might not know a client’s industry well enough to rely on instincts. The right metrics help us convince the CEO with Fortune 100 clients why they should work with us when we have no experience in their industry.
From doubt to certainty
Relying on data to drive marketing decisions is something I can justify to a client. As long as we can get on the same page upfront about the core objectives and keep it that way, data can be everyone’s friend.
We get to choose KPIs that matter to the client that we also have some real control over.
With it we can prove or at least predict ROI, make a defensible impact on a business’ health/growth, whatever.
To me that in and of itself is part of the problem.
With catering to certain metrics, things can get in the weeds quickly. Those weeds might look like annoying people at scale, sacrificing long term brand health for short term gains, or doing things that will increase refund requests just as much as they increase sales.
Data interpretation biases
Depending on how reporting happens, metrics can be fraught with bias. It can be interpreted 10 ways by 10 people, and when you’re interpreting the data in an agency-client relationship, you’re basically giving your own performance review and then just letting them know how you did.
Simply by choosing what to focus on in reporting, we’re giving more value to whatever the focus is.
And it’s not just agencies. The biases get worse as companies get bigger.
The bigger the company the more departments. The more departments the more personalities, egos, motives. As the agency, you have to start trying to align yourself with key people. To do that you need to understand interpersonal differences, interdepartmental issues, and have enough ammo to get buy-in from the right people.
Suddenly there’s pressure and the data can tell whatever story we want:
- 50 Google rankings went down while 30 went up – is that good, bad or just noise?
- Traffic increased 40% since the new site was launched 3 months ago. Is that because we built the client a new site and didn’t screw up the migration or did they just benefit from some Google algo update?
- Sales are way down for weeks after the Buy-One Get-One (BOGO) promotion ended. Bad promotion idea? Bad time of year?
Alignment gets harder as goals vary
If we get a referral or someone in our network brings us in on a big project, making them look good becomes important. And then also, not hurting someone else’s feelings becomes important.
And then navigating what the higher ups want to see happens through the filter of whisper down the lane.
If the goals get influenced by any one of the above things, getting off track is now super easy because no one knows what on track looks like anymore.
Typically we cater to KPIs around reducing costs and increasing leads or sales. We set these with our clients at various points in the funnel and sometimes they care about other things we cannot really connect to an outcome – like impressions/reach.
Almost immediately the pressure is on to move the needle on a small number of metrics.
Cognitive tunneling happens. And that’s a bad thing, like when Wells Fargo was inflicting account open quotas on their branch managers to improve cross-selling existing customers on new products.
Quotas are KPIs’ evil twin brother.
As another example, just look at what Amazon does to its people in the name of productivity. People in their warehousing are afraid to take bathroom breaks.
And it’s not just big businesses. Whenever you choose a select few KPIs to focus on, you’ve also chosen to basically ignore all other indicators of success.
The wrong type of creative constraints
The chosen KPI constraints now lead to coming up with creative ways to increase those KPIs.
As an example, you can run a giveaway that will get hundreds to thousands of shares and emails. The reach might be worthwhile if your product is meant for the masses.
Any meaningful impact isn’t easily measured because contests like that almost never result in real sales or growth of core customer base.
For the rest of us, the emails and shares earned end up having such a minor effect that spending that $1k to run that campaign would have been better spent on ads.
We had a client spending $30k a month on Facebook ads thinking that if they turned them off their company would implode. When they finally did, sales volume barely skipped a beat.