The Power of the KPI – The Only Measurement That Matters
Posted in : Management:
- On : May 12, 2009
By Rodger Roeser, APR
I love convoluted measurement programs – they allow me to justify how brilliant and marvelous I, as a PR professional am. They enable me to obfuscate, huxter and otherwise create smoke and mirrors instead of producing real results. Hopefully, this is not you and not your agency, yet agencies and corporations spend millions of dollars in time and money to justify their existence with fancy tracking software, advertising equivalencies and a host of other add ons to find out just how positive or negative a story was, how many inches you received, ratings points and viewership, and just about whatever else you’d like to measure.
These should not be used as measurement tools, but rather as guides to justify where time and effort will be invested and prioritized. The only measurement tool that matters is the KPI – Key Performance Indicator. A creation of our agency, this measurement enables both the agency and the client to keep their eye on the prize of what is truly important and, why someone should be pursuing a marketing program in the first place – growth. You’re trying to generate “more” of something through a good marketing and public relations endeavor, and usually that “more” is more sales and more market share. That “more” can be measured.
Traditional measurement tactics only take into account the tactical culmination of a specific and isolated event, which, when aggregated, still fails to provide a complete picture, but rather spews out such useless information as 15 articles, viewership/readership of 2 million and/or advertising equivalencies of $5 million. Again, the reach and the equivalences are important only in prioritizing activity, similar to choosing which media to buy in paid, and should never be used as a sole measurement – in fact, doing so only further solidifies the reason the keep PR people out of the corner offices.
Don’t misunderstand, it is good to still track these items, but a strategic marketing program is based on the premise of the KPI – tying your activities in to the core objectives of the business. To illustrate: We received six articles this month in trade magazines is NOT a KPI. The new program we implemented drove 12 leads to sales and increased website traffic 20 percent IS a KPI. The KPI is a set of indicators tied to the growth or understanding of the business. Only through the tactical work, i.e.: securing numerous trade articles, holding a successful event or seminar, or creating a lead generating advertisement, will you create a groundswell that positively affects the KPIs. And, creating them are relatively simple, but must be done with top management involvement.
Step One: Set up the KPI Meeting
Set up a KPI meeting, typically at the beginning of the fiscal year. Lay out in detail exactly what the organization is trying to achieve: i.e.: more employees using the intranet or reading the employee newsletter, more widget sales, higher recruitment numbers or an increase in fundraising dollars. Understand exactly what the core objective of a given entity is and determine your level of desired growth and its subsequent impact to the organization i.e.: a 20 percent increase in widget sales will do a, b and c to the organization.
Step Two: Benchmark and Set Growth Objectives
Next, benchmark exactly where you are now. We sold 2000 widgets in 2006, we want to sell 2400 in 2007 – a 20 percent increase. This increase will result in bottom line profits of $5 million over 2006. Now, you can plan accordingly to achieve this goal in conjunction with sales training, operational brand alignment and marketing – all of which go hand in hand in achieving the core objectives and clearly put marketing in the lead of driving the activities that lead to this growth – after all, it’s your butt on the line.
As it should be.
Sadly, I see so many marketing and public relations professionals in both corporate and agency present tactical minutia as proof of performance and too often, the corporations demand this type and force the hands of well intentioned professionals. Hey, corporations managing agency pros – if your agency is spending time on putting all this tactical information together, your dollars are being spent on administrative tasks instead of focusing on the growth of your organization; that’s just bad management and an unstrategic use of your dollars. A good agency will proactively present creative and proven ideas that will grow your company and should be evaluated as such against set KPIs slated and agreed upon in the beginning of a program.
Don’t say “you want three articles a month.” Instead, say: “We need to grow sales of widgets by 22 percent in the third quarter.” Then, let your agency or marketing team devise the work that will achieve this. If they are not capable of doing so and fear being measured against specific growth objectives: it’s time to find a new team. Also, very important point: don’t put KPI measurement on an agency, then dictate what they can and can’t do or curtail their involvement throughout the whole of the entity. KPIs work because they work all the way and embrace sales, operations AND marketing.
Tactics are exactly that – tactical means to an end. KPIs enable public relations professionals to more cogently present ideas and programs that mesh with the core objectives of an organization and spell them out clearly at the beginning of any endeavor. The work to accomplish the goals and measurement against the KPIs enable senior management and the public relations professional to draw correlations between the work and the results. Stop showing clips. Start showing meaningful growth as a result of your efforts.
If you need help getting started – call me.
Oh, that’s part of my KPIs. It’s not about getting this article published – it’s about you calling me to hire my firm. The article is one of many means to a desired end. Understand the difference, because mastering the concept of the KPI is the difference between the invitation to the C Suite and the request of “hey, can you write a press release.”
About the Author
Rodger Roeser, APR, is the president of Eisen Management Group, a public relations, buzz marketing and viral advertising agency headquartered in Cleveland with branch offices in Cincinnati, Ohio. Roeser served as the 2005 president of the Cincinnati Chapter of the Public Relations Society of America and founded the chapter’s Blacksmith Awards Program. Roeser is the former vice president of Justice & Young Advertising and Public Relations, senior public relations consultant of HSR Business to Business and public relations director of SealMaster and the #88 NASCAR Craftsman Truck Series Team. He is an award winning television, radio and print journalist and a contributing and published writer and author for dozens of public relations, marketing and advertising publications. He can be reached at [email protected]