(Okay two days ago, but c’monnnn who’s counting really?)
We explored how we can construct a feedback loop for our hypothetical weight loss objective.
Today let’s extend that analogy to something we’re interested in that doesn’t involve giving up pizza and being unwittingly forced into an unpleasant exercise routine:
Instead, we’ll be…
Launching a content-based email program (a.k.a. a semi-regular newsletter).
This is something I plan on delving into a bit next week actually, so this will also serve as a nice primer for that discussion.
And to clarify, this type of measurement system can be applied virtually any lead generation approach, with the requisite modifications to the variables you choose to measure.
But for now, let’s say that you’re planning on collecting some amalgam of colleagues, clients, dusty old CRM contacts, inbound subscribers, randos you met at a lunch-and-learn…
And then emailing that list of folks something on a regular basis in order to establish a content-based lead nurture program to fill up your firm’s sales pipeline with new opportunities.
Here’s how you might think about this using a similar type of short-term vs. long-term feedback setup as we discussed with the weight-loss example.
Ultimately you want to generate more high-value clients for your firm.
That’s the numero uno KPI.
But the problem here, like the problem with the weight on the scale, is that this metric lags your short-term actions and decision-making.
And in this case, it’s far more severe.
Sales cycles can average 3-6 months.
And there are many many more confounding factors involved:
- Your current market position and level of specialization
- The amount of runway you have
- The amount of time you have to dedicate to creating content
- The quality of your existing sales process
- The difficulty of attributing of the effectiveness of your email program versus all of the other things you’re doing (speaking, events, LinkedIn, one-off emails, PPC, cold outreach, SDRs, SEO, etc.)
- Just getting started here… there are many more
That’s all just to say that if you would consider building a feedback loop for the weight loss problem due to this separation and signal vs. noise issue…
Then you REALLY REALLY should be doing this for something as difficult as running an email newsletter program aimed at generating more clients for your firm.
How do we do this?
First, we’ll establish what our Lagging Indicator needs to be. And in this case, I would typically use two.
Lagging Indicator 1: New qualified sales pipeline leads.
These are potential clients that meet the qualification criteria you’ve established that gives you at least some level of confidence that this person would benefit from your service, is interested in solving the problems that your firm solves, and has the budget (or the power to acquire the budget) in order to pay. Or something approximating that.
I generally use scheduling an intro/discovery call as the trigger.
Lagging Indicator 2: New clients acquired.
Self-explanatory, but also not directly correlated with marketing and lead generation performance. However, this is the end goal and we need to understand whether this number is tracking along with the sales pipeline leads metric.
Is there something that needs to be improved in your sales process because of added volume, or other characteristics involved in the dynamics of the leads coming from this new initiative?
These are questions that can only be answered by first measuring the end result to verify that we see the throughput we would expect from that first.
So these are our Lagging Indicators that will form our long-term feedback loop. And like the weight that shows up on the scale, there’s an appropriate frequency in which we should be checking in on this performance.
Plus, when you’re starting anew as in this case…
There’s both an appropriate frequency, as well as a waiting period in which you shouldn’t act upon these performance metrics until an appropriate amount of groundwork has been laid and momentum has been achieved.
We need the flywheel to be spinning first in order to measure the true power output of the engine.
If you expect your email program to be able to produce 2 new qualified leads per week, it’s then appropriate to check in on this metric weekly or bi-weekly.
But usually only after a 1-3 month startup period, depending on what other resources or momentum you already have in place marketing-wise.
Then, if you expect a 10% lead-to-sale close rate from those prospects, you should expect approximately 1 new closed deal per month… after your 3-month sales cycle has played its course. So that means that eventually you’r evaluation frequency for sales performance should be monthly… but only after, say, 4-6 months after campaign kickoff.
I know the face you’re making right now.
This is where (a) patience and (b) your short and medium-term (yup, I think necessary in this case) feedback mechanisms come into play.
Again, like with our weight-loss system, we need to establish some Leading Indicators that are under our control in the near-term, that we’ve based on a strategic framework we reasonably expect to produce results.
These are what we then execute on, and manage to weekly (or even daily) and are process-based.
For example, a few I would typically use for a weekly newsletter setup:
- Emails published per the process. Yup, gotta get work done. Getting the email out there is kind of the most important thing. Followed closely by executing that email per the process you’ve established based on the strategy you’ve developed. This usually looks something like an SOP and an editorial checklist.
- Content calendar updates. Along with doing the work for this week, we need to stay ahead of the curve and be thinking about next week as well… lest the last-minute “crap we have to get this thing out what do we write?” scramble throw our strategic framework out the window. Again there should probably be some sort of ideation, refinement, and planning process established.
- Promotion processes completed. What’s that? Another process and checklist? This is especially important early on. You need distribution. You need eyeballs on your stuff. Without that there’s no feedback to flow through the feedback loop. So this could involve syndicating the content to your blog, LinkedIn, Twitter. This could involve emailing other publications what you’ve written, aiming to land a guest column. This could involve curating your content across Slack groups. Whatever it is, it’s a process and completing it is a prerequisite for traction.
Now… you could leave it at that.
And this is essentially what I do for this list.
I have enough trust in the process that I’m okay with using my judgment to continue on with my weekly activities with a bit of lag and uncertainty in terms of whether or not what I’m doing is on track.
And here’s what that would look like:
In most cases (especially if this is brand-spankin’ new) you’ll want some additional short-term visibility. Especially if you’re not sure exactly what’s going to happen.
That may, in some cases, feel like the equivalent of setting your GPS, aligning your steering wheel, depressing the accelerator… and then closing your eyes for a nice little 3-hour nap.
(And actually, I lied. I do look at some intermediate “things” to evaluate how I’m doing. I just am okay not formally tracking them.)
If you have a budget and resources assigned and an at least semi-formal management system in place at your firm…
You may want to establish some formal Intermediate Indicators like:
- Open rates vs. baseline. Tread carefully here. Open rates are highly variable depending on a million different factors that have nothing to do with the quality of your headlines or the interesting-ness of your content… list size, cleaning frequency, industry, context, subject matter, whether you have a history of being spammy and are just now reformed to emailing like a normal human… But! As a general rule of thumb, they shouldn’t be below 25% as a baseline unless you’re in the 50k+ list size territory (yea, not us). And you should evaluate this as a trend over time to be investigated only if there’s a significant or curious dropoff.
- New qualified email subscribers. Don’t blindly count up your subscribers. This is where we get into vanity-metric-terrority. Instead, do a spot check. Has this person opened what we’ve sent them? If I go to their website do they look like legitimately someone who falls within our target market? At the volumes we’re dealing with this is definitely doable. And an increase in these types of subscribers is a meaningful indicator that you have something of value to offer with your content and that your promotion strategy is effective.
- Meaningful interactions. This can be a bit harder to measure. But any reply to an email, LinkedIn message exchange, or mention of something you wrote about on a call that you can tell has come as a result of the emails you’ve been sending is the best early indicator that you can expect some sales activity to occur down the road (assuming there’s alignment between your content and your service).
Now, this is what our beautiful little flowchart looks like:
Your Intermediate Indicators are just that… measures that have some correlation to the Lagging Indicators that can inform the Strategic Framework if something looks “off” early on.
They also provide some additional intelligence you can use in case the sales activity you’re looking for doesn’t come to fruition and you need to troubleshoot.
They have no causative impact on the end result… and therefore should be treated as such.
They don’t represent success in and of themselves…
But are instead, your lane-change warning sensors that inform you when you’re about to go careening off the road because you’re not paying attention.
Run a “system” like this and you can both “not check the scale” and screw with your emotions… while at the same time maintaining some level of confidence that you’ll know when you’re hitting your targets and when you need to pivot.
And that’s about all I have to say about that.