Moneyball For Marketing: Why Metrics MatterWith baseball opening day right around the corner, I’ve been thinking a lot about Moneyball and how it relates to marketing. Billy Beane, general manager of the MLB team the Oakland A’s, faced a challenge many marketers can relate to: he had a smaller budget than many of his competitors, but he still needed to win. In 2002, the A’s had $41 million in salary with which to build a winning team. The Yankees? They were working with over $125 million in payroll for the same season. Beane was between a rock and a hard place: he needed winning players to carry the A’s to victory, but he couldn’t afford the players traditionally dubbed as winners. Yet in 2002, the Oakland A’s went on to win 20 consecutive games, setting a record for victories.
How did Billy Beane do it? Moneyball made his strategy famous: metrics. Beane focused on rigorous statistical analysis to choose not the big-name players, but the players that produced the right metrics that ultimately led to winning games. For Beane, the key was tracking slugging percentage and on-base percentage. He focused relentlessly on these stats and optimized his team around them. For marketers, it’s about quantifying which marketing activities and sources produce leads and calculating how much revenue they generate for your business. By constantly measuring and refining your strategy, you drive ROI and grow your business.
Making the most of the budget you have
If you’re doing any kind of advertising, you’re spending precious dollars of your budget. To ensure that those dollars aren’t being wasted, you need to enable your marketing team to track their results down to the penny. Knowing where your leads come from means knowing which efforts are successful.
For example, if you’re advertising on TV, insert a unique, trackable phone number into the ad. With real-time reports and analytics on those call tracking numbers, you are able to track the phone leads generated specifically by that ad and compare them to the successes of your other advertising sources. The same tactic applies to any of your ads, from other offline sources like newspaper and billboard ads to online sources like PPC and SEO – all the way down to the actual search engine query that triggered the call. This provides you with the data you need to analyze and construct the best campaigns, online and offline. Like Beane, you can then decide where your budget will be best spent.
Track the entire marketing funnel
Once you have a comprehensive picture of where your online and offline leads are coming from, you can combine that information with CRM data to get a full, 360 degree view of your entire marketing funnel (and of course, the key stats at each stage). Let’s go back to our TV ad example. You can now quantify how many leads that ad spot generated, the conversion rates of leads into opportunities, the number of paying customers it produced, and the volume of revenue it generated. Add in the cost of the ad and you can calculate the precise marketing ROI for that specific campaign.
Now expand that same concept to all of your marketing initiatives – SEM, content marketing, print advertising, social media, or any other activity. The result is a robust, data-rich view of exactly where to invest. Maybe you’ll realize that a “star” player in your marketing mix isn’t bringing in the results you need for the amount of money you sink into it—cuts might be made and new players invested in. All of which put your business on a path to a winning season.
If Billy Beane taught us one thing, it’s that you don’t need a big budget to win. Even if you’re batting with a short bench, the metrics are what will carry you to success.
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