About a year ago, my loan management SaaS company, Lendsqr, partnered with one of the most recognized tech media startups in Africa. We experimented with activations and a whole lot of other stuff and spent thousands of dollars to push the Lendsqr brand out there. The team was pretty excited about the partnership and we caught a lot of eyeballs.
But you know what? What!
Despite all the attention we got, it translated to absolutely nothing tangible for the business. Zero. Zilch. And we only found out because we had put a system in place to track our inbound from all the activities.
This incident, amongst others, got me thinking deeper about some of the marketing efforts we’ve put in over the past couple of years at Lendsqr and their impact, and I realized just how dangerous vanity metrics can be. During those years, working with my technical assistant and marketing team, we designed different campaigns to drive traffic and sign ups, etc. and tried our hand at various marketing platforms.
Here’s the jarring thing; when dealing with these marketing platforms where we splash a boat load of cash to get noticed, they’d only ever report metrics like views, clicks, downloads, etc. Vanity. And whenever I chatted with my customers and their marketing teams, it was always the same story – hyping vanity metrics like they’re the best thing since the internet. They’d say things like “This was successful. There are x thousand clicks” But for me, I’d always roll my eyes and think “What the h*ll are you talking about? Yes, people clicked and saw our stuff but what use was this to the bottom line?”
If your marketing isn’t doing this, stop, it’s a waste
When it comes to evaluating the effectiveness of marketing efforts, I believe it’s crucial to look beyond surface performance and focus on what defines success for your business. It’s also important that whatever you are doing for marketing is worth the money spent. At a time when everyone is watching cost like weight watchers, ensuring your money provides a real return is the real deal.
I understand the temptation to boast about these surface level metrics; sometimes, I love to talk about the number of lenders we have at Lendsqr and the number of customers (borrowers) we have by proxy. But the truth is these things are like barometers; they’re not the real thing, simply tools meant to indicate something else.
What really counts are the tangible outcomes. Specific to my business, that’ll be things like how many people are actually taking out loans, how many of them pay back and ultimately, how much profit is being generated for our lenders and us? These are the real indicators of the health and sustainability of what we do. Anything else falls apart under scrutiny.
It’s easy for anyone to get caught up in the kumbaya of measuring some feel-good metrics
But if you don’t know what’s most important to your core objectives and then work backwards from there, any other thing you’re doing is a waste of time and resources.
For us at Lendsqr, the things that are important are the number of loans booked by customers, our ability to facilitate recovery and the overall profitability of our lenders. Everything else pales in comparison. So even if I bring out a babalawo (dark magic practitioner) to do his stuff and help me achieve these core numbers in a sustainable manner, then it’s more important than if the whole world is reading about me raising a gazillion in TechCrunch when I’m not able to achieve the important things.
Do this to beat the vanity trap
Given how easy it is to get swept by vanity metrics, how do you avoid that for your business? Well, it’s all about setting the right priorities from the jump (or doing a reset if you’ve already lost your way). Whether you’re a founder, stakeholder, or investor; you MUST figure out what truly matters for your business to survive and eventually thrive.
Start by identifying those core metrics that really determine sustainable success. Maybe it’s profitability or the journey towards profitability. Break that down further into details like unit economics. How much are you making now, and how much could you make if you run your business as well as you possibly can?
Once you’ve gotten these details sorted then you can get down to it and take a look at what you need to do to achieve these vital metrics.You might even find that the path to achieving these is surprisingly simple. This assessment will make you face the reality; whether you’re on the right track or not.
So this means that as a founder, leader, or investor, it’s your responsibility to sit down with your team and guide them to distill the tangible results from the hype and noise. Ask the tough questions – “it’s okay that this content is trending and gathering views on social media but how does it translate to *insert your core metric here*?”
Now, don’t get me wrong, I’m not saying that those who quote these vanity metrics are bad people who are out to deceive you. Not at all. They’re just operating based on what they know. It’s up to us as leaders to reorient them and make it clear that if whatever they’re doing doesn’t translate to real value, it’s a distraction.
So, the next time your marketing team comes to you with a proposal, challenge them to connect the dots. For instance, “if we invest in this video and rack up a million views, what does it really get us? How many new customers can we expect to sign up, and what’s their long-term value to the business?” That’s how you determine the success of your efforts. But if you don’t have these numbers, then it’s a waste.
Let’s find balance: Intangible results matter too
Before even my own marketing team comes for me, of course, I recognize that not all marketing efforts are about immediate addition to the bottom line. Sometimes, we’re aiming for those intangible wins like brand recognition and top of mind awareness which are also important and contribute to the groundwork for future success.
Think about Coca-Cola or Apple. We all know that these names mean something and add substance to anything they’re affiliated with right? It’s clear it’s not just about the products; brands like these have proven that building brand trust and a good reputation matter too.
So, we can also say, “Let’s grow our brand equity,” because sometimes, that also paves the way to real value. Not every marketing effort will translate to Naira and kobo or Dollars and cents. Having a strong brand means people trust you, they’re willing to pay more for your stuff, and they’re more likely to buy from you in the first place. This is an intangible asset you can leverage to improve your earning margins significantly and boost your core business results down the line.
Additionally, beyond external projection of your brand; what goes on internally matters. How are your employees performing? Sure, a lot of people want to build a happy workplace. This is good. But here’s the thing: if your business is dying, no amount of employee happiness will save it.
You have to stay focused and ensure that your measure of employee happiness or the employee experience in your company is assessed within the context of sustainability. What benefit is it to you to have happy staff and a dead business? It’s utterly useless. But obviously, if you also have unhappy staff and you’re only fixated on numbers and driving results, your business will die.
It’s all about finding balance. Happy staff produce good business and good business makes staff happy. Don’t break that cycle.
Find what’s right for you, today and every day after that
As a company, you’ve got to know which metrics really matter, and that can change from time to time. The metrics that are important this year, may not be important next year.
Maybe in the early stages of your startup, you’re all about survival then growth before paying attention to profitability. Not because profitability is wrong but because you know that survival and growth are crucial to charting the course to profitability.
For a B2C company, you may have to work a lot on your brand equity and find a good way to measure it, because you know that down the line, brand equity will translate to easier ways to sell and better margins.
Whatever the case may be, you’ve got to be able to call b*llsh*t on the fakes and focus on what truly drives success.
Lastly, do views, clicks, downloads have their benefits? I really can’t say but what I will say is that they have to lead somewhere meaningful. If a marketing agency tells you to spend $100,000, they better have an answer for what’s in it for the business, beyond the feel-good stuff, because if it doesn’t add up, you might as well just set that pile of cash on fire.