How to Avoid Getting Trapped by Middle Metrics
Nov 15, 2016
Middle metrics have gone from insightful tools aimed at explaining performance to primary goals in and of themselves.
While this increased reliance on middle metrics is well-intentioned, it raises a number of concerns for marketers.
We’ve all seen the articles touting the merits of "middle metrics"—how well they can measure marketing performance and how they can be used to define strategy. But while these metrics can play a valuable role in understanding elements of a marketing program, they present serious risks when used in isolation.
For Starters: What are Middle Metrics?
Middle metrics are simply the performance measurements of more granular components of the overall customer journey. Examples include:
• User flow through each page of a multi-step conversion funnel
• Time lag from first engagement to conversion
• Click-through rates of abandoned cart emails
Those are just three examples, but you can derive an infinite amount of middle metrics from your data and analytics. When used judiciously, they can serve as excellent diagnostic tools to understand the macro-trends in overall business performance. Unfortunately, these measurements are often all-too-appetizing to pass on for siloed organizations. Instead, they opt to use these middle metrics as primary goals, which can have serious negative consequences across the business more broadly.
When and Where Middle Metrics Are Useful
However, that’s not to say middle metrics aren’t useful. When an organization notices unexpected performance (good or bad), middle metrics can be invaluable in uncovering what is, and what is not, working.
If a marketing group notices they are missing their lead form conversion goals, they can dig into middle metrics, such as the conversion rate of the lead form or the click-through rate of prospects from the marketing landing page to the lead form. This investigation could reveal that while the form is converting at an expected rate, there aren't enough prospects clicking through to the form. Savvy marketers will take this information and implement a landing page test in an effort to boost click-throughs to the lead form and alleviate this issue.
The Risk of Relying On Middle Metrics
Now let's look at a potential middle metrics nightmare scenario. A well-intentioned marketing team member says: "You know, if we shifted dollars around we could probably drive the same number of leads at a lower cost-per-lead." Leadership agrees with that logic, so in the next planning cycle, marketing is given the goal of reducing the cost-per-lead by 10%. Marketing does an awesome job (because, or course, all hypothetical marketers are awesome) and reduces their cost-per-lead by 12% year-over-year. Everyone is happy, right? Well, not exactly.
While the marketing team was directed to reduce the cost-per-lead, the sales team was given the primary goal of improving lead conversions by 5% (another middle metric applied in a silo). The sales staff didn't lack for confidence (do salespeople ever?) so they eagerly accepted the challenge. Unfortunately, despite the skill and effort of the sales team, their conversion rate actually declined slightly year-over-year.
After some finger-pointing and hasty data shuffling, it was determined that marketing's work to reduce cost-per-lead resulted in less-expensive but also lower-quality leads.
Oh, and by the way, many of those lower-quality leads that did end up converting weren't particularly valuable customers to begin with. So their boost to the conversion metrics actually ended up hurting the company's bottom line in the long run. All because the organization was too focused on middle metrics without understanding how those numbers affected their business.
Team Animosity: Brought To You By Middle Metrics
As I touched on in the scenario above, these middle metrics can actually create unhealthy conflict within an organization. When team members aren't working in harmony toward the same goals, it's only a matter of time before the opposing pressure creates conflict and negative feelings.
In the nightmare scenario, it wouldn't be surprising for some of the sales team members to start thinking of the marketing team as doing a poor job getting quality leads, and for some marketing team members to view the sales team as unable to do their jobs effectively.
In addition, all of the tactical employees involved may start to doubt the competence of leadership that would approve goals that were in opposition to one another. This brooding distrust can prove toxic to a company culture, which relies on getting everyone pulling in the same direction for a common goal.
The Answer To Middle Metric Challenges
Avoiding the inherent traps associated with middle metrics is a matter of being able to see the forest for the trees, as they say. Just add a dollop of skepticism whenever middle metrics are on the table.
In the scenario painted above, leadership needs to ask questions to understand what marketing levers impact the cost-per-lead, and subsequently what changes in cost-per-lead can mean through the funnel. These numbers can be looked at in isolation, but the customer journey doesn't happen in a vacuum. Ultimately, it is incumbent on marketing leaders (and broader business leadership) to invest in understanding the entire customer journey from awareness to advocacy.
It’s also incumbent on agency relationships to shift to address this broader perspective. Companies have gotten by with tasking agencies to focus on the one or two specific pieces of the marketing puzzle the agency owns (and nothing more). That’s not going to cut it, anymore. It's time to reassess the relationships agencies have with their clients, and let them to stretch their legs outside of their cramped, little silo.
Middle metrics are useful tools, but it’s important to understand their limitations. And, if your company works with an agency, make sure they understand these limitations as well. Otherwise, middle metrics have the potential to lead you in the wrong direction.