The Devil is in the Details
Years ago, I worked at a summer camp.  One of the jobs I was given that summer was to help construct a play fort.  I’m not talking about a little play house. I’m talking monumental, 75 feet across, “Custer’s Last Stand” kind of fort.  I remember one hot June day we were putting on the finishing touches which included cutting the railings for the top decking (told you it was huge).  Another worker and I were calling out measurements from the deck.  Two of our co-workers were on the ground, cutting the rails, and handing them up to us. For the first railing my co-worker from the deck called out, “36 and three-eighths”.  Obviously, he needed a piece of railing that was 3 feet and 3/8^ths inches long.  However, the saw operator below first cut, then handed us a 3 foot rail plus three 8 inch long boards.  After all, the measurement called a 36 and three 8’s, right?

We learned a few things at that moment:

1.  The saw operator needed to be reassigned to something else besides carpentry.

2.  The saw operator was using the wrong measurement.

While this story is amusing (and one I tell often) it is not too much different that what many companies do today when measuring their marketing effectiveness:  they apply the wrong units of measurement.  Usually, the only stat that really matters to marketing professionals is ROI (see Counting the Losses – August 17).  They measure the results of campaigns at a certain point in time, assign an ROI, and are done with it.  But to do so is not much different then providing a 3 foot piece of wood and three more that are 8 inches long. There are other measurements that need to occur.  One of those measurements entails taking into account your sales cycle. 

One of the companies I did work for in the enterprise software market had a sales cycle that was 6-9 months.  Using a point in time measurement only skewed any kind of quarterly ROI numbers.  Certainly a few deals would close within the first three months of a campaign launch, but they weren’t the whole story.  The majority of deals would not be realized for nearly 9 months after campaign launch.  That’s why we created Pipeline Return on Investment^TM or PROI^TM: measuring results in terms of what is put into the pipeline.  By including PROI^TM  in your analytics report you will get a more accurate picture of the true impact of the campaign, plus additional data to help determine sales’ close rates and forecasting accuracy.

By not including metrics such as PROI^TM in marketing analytics, much data is being left out, and measurement will be way off.