“When a measure becomes a target, it ceases to be a good measure.” A statement made by economist Charles Goodhart not only holds true in economics and policy but it how we measure our marketing efforts.
If you’ve ever worked in marketing you’ve heard these lines before. We’d be doing better if we had more leads. Marketing is responsible for leads and everything else is secondary. Marketing, why are the leads down? This list could be endless.
Jumping back to Goodhart’s statement (ie Goodhart’s law) it’s clear that many marketing teams have fallen victim to using marketing leads as their end-all target. And if you think deeper about this law, it would then hold that any of your specific measurable targets would be no longer be good measures.
Where I see the value in this law is that you have to look at related measures, not just one to develop a good measure. For example, say you want to measure your marketing effectiveness at bringing in new business. Instead of looking at just leads, look at the bigger picture. Look at how qualified are those leads. You could score the based on demographic or behavioural traits. Or you could look at the rate leads become qualified by your sales team. You could measure how many leads are turning into sales opportunities or discussions. You could also look at how many of those leads are eventually buying. And all of this could be broken down by channel (ie Google Ads vs. Email).
Another way to look at is to ask the question, if were to only measure marketing leads, how successfully would we be? I think you’d be more successful than the organization that isn’t measuring their leads. But I think you’d be way worse off than the team that’s looking at the bigger picture. By prioritizing a few key metrics that also impact other teams, you’ll be able to run a better marketing team that’s accountable for the right things.