Do You, Your Boss, and Your Boss’s Boss Agree on Your Metrics for Success?
By Jeanne Roué-Taylor
How you define success determines how you evaluate strategy and ongoing operations. This is such a fundamental point that we make it over and over again. It’s that big. Being crystal clear on what matters ensures everyone is focused on the same objectives. What’s more, the perception of your personal success depends on it.
Aligning Customer Loyalty Marketing Metrics
This comes to life when you consider a basic question: Which is more important, customer visits or customer retention? If you put your faith in visits by defining success through revenue lift over your control group, you’ll work to maximize your campaigns, potentially marketing to the same active customers over and over to keep them active.
On the other hand, if you define success by overall retention, you begin to look at your moderately active customers and ways to reactivate your declining customers. This may have a lower ROI than revenue lift in the near term, but if you’re looking at retention rate and lifetime revenue (and your boss evaluates you on this), you’ll be better off in the long term because you spent money in the right places to achieve the agreed-upon definition of success.
Do you, your boss, and your boss’s boss agree on your metrics for success? You clearly need to.
Getting Customers to Cross the Aisle
As a great example, one of our top retail customers had a well-aligned definition of success that was less about retention or visits, but instead was laser focused on cross-category selling. The company knew from its own experience that its customers had a higher lifetime value if they bought from multiple key categories. The whole approach—from a program structure to the content and engagement points—was designed to drive customers across the aisle to buy from other key categories. Cross-category sales is a tremendously successful success metric for them and has a big impact on the company’s revenue. If the company had agreed, instead, on other ways to measure success, its program would have been perceived as a failure very early on.
Gaining organizational alignment around key metrics isn’t an easy thing, but the benefits can’t be stressed enough. Agreement on what constitutes success will give you the backing to decide where to spend the next dollar of your marketing budget and the means to continue to spend, or shift spending, based on the outcome. An aligned organization is a powerful force.
To know more about factors for success, check out our webinar, Nudges, Influences and Rewards Part 2: Must-know Factors for Success in Retail Customer Loyalty.