Setting OKRs for the Marketing Team
Setting OKRs for marketing is made harder by the multitude or absence of meaningful metrics or KPIs. Marketers should set objectives informed by higher level company goals, and by focusing of the underlying performance drivers for marketing, instead of the metrics which are just indicators of performance.
What are the KPIs for marketing?
We recently looked at setting OKRs for sales teams. The challenge for marketing teams is quite different, in fact almost the exact opposite of sales teams. Sales teams and sales reps are measured and compensated based on the attainment against sales quotas, or the number. Marketing does not have a single measure of success like sales. Instead, marketing relies on a wide variety of metrics, and marketers recognize that there is no definitive, single measure of marketing performance.
The metrics marketers care about include the following:
- Gross Profit, Gross Margin
- Customer Acquisition Cost (CAC)
- Lifetime Value (LTV)
- CAC Payback
- Origination (% opportunities, % revenue, % customers)
- Influence (%opportunities, revenue, % customers)
- Marketing Qualified Leads
- Social engagement (Likes, Follows, etc)
- Web traffic (Unique Visitors, Repeat Visits, Visit Duration)
- Conversions and Conversion Rate %
- Market Share %
- Net Promoter Score (NPS)
- Press mentions
- Wallet share %
And of course, as every marketer knows only too well, some things are just not measurable, and even when things are measurable, it is hard to accurately attribute the measurable metrics to outcomes.
The multitude of metrics, or the absence of metrics, is a common obstacle to setting good OKRs for marketing.
Setting OKRs for Marketing
As with Sales, setting Objectives for marketing should be done NOT by focusing first on the quantitative metrics, but on the qualitative objective.
For example, a marketing objective might be to make our brand the most highly recommended in our market. Let’s look at how we might go about measuring the attainment of this objective.
- Key Result #1 – Average review score. Almost regardless of the type of product or service, customers are now very used to the idea of rating products and services, and submitting often very detailed reviews.
- Key Result #2 – Percentage of 1- and 5-star reviews. We are aiming to as many brand advocates as possible. So, we want to track the percentage of 5-star reviews as a proxy for our brand advocate performance. On the other side of the spectrum, we want to minimize the number of brand detractors, and so we want to track and respond to 1-star reviews and turn as many of them into brand advocates by timely and appropriate responses to address their concerns.
- Key Result #3 – Net Promoter Score (NPS). The NPS identifies brand advocates, and brand detractors. The higher the score, from -100 to 100, the better.
- Key Result #4 – NPS Brand Advocates. When calculating NPS, customers are asked how likely they are to recommend the product on a scale from 0-10. Customers who respond with 9 or 10 are considered Brand Advocates. Given our objective, it makes sense for us to care about this group in particular.
So now we have an Objective, and we have identified several metrics, or Key Results in the OKR terminology, which are meaningful performance indicators relative to the objective.
More OKRs for Marketing
Now that we have an understanding of how to set OKRs for marketing, we can start to think about more ways to develop good objectives which drive marketing performance.
In the Sales article, we look at 5 categories: Activity, Process, and Method, Aptitude and Attitude. We can do the same for marketing, focusing now on the core categories of Activity, Process, and Method:
- Objective: Increase marketing output
- Key Result #1: Number of campaigns executed
- Key Result #2: Size of total audience reached
- Key Result #3: Number of responses
- Objective: Streamline creative process
- Key Result #1: Creative approval time
- Key Result #2: Percentage of process automation
- Key Result #3: Agency SLA performance
- Objective: Improve Social Media Capabilities
- Key Result #1: Team training requirements document
- Key Result #2: Social media training provider short list
- Key Result #3: % of team with training certificate
You can also develop your own categorisation, for example along functional categories, such as creative, communications, etc, or along customer segments, e.g. small, large, enterprise, or industries, e.g. banking, telecoms, etc.