Alan Mitchell: Reinventing marketing - Marketing metrics make us look in all the wrong places

Setting aside industrial-age concepts, such as 'product', 'brand' and 'consumer', frees us up to consider the value people add to their own lives and how it can be measured.

Alan Mitchell: Reinventing marketing - Marketing metrics make us look in all the wrong places

This is a plea to rethink how we use metrics. As a way in, let's transport ourselves to a completely different, baggage-free environment. Nowadays we understand the phenomenon of fire in terms of a chemical reaction between oxygen in the air and a fuel such as carbon in the burning substance. When something burns we see this chemical reaction.

Now, take yourself back to a time when people thought that earth, air, fire and water were fundamental building blocks of matter. When they looked for the secret of 'fire' they looked for a separate physical entity (not a reaction), and they looked for it inside the thing that burned, not in a reaction between it and its surrounding atmosphere.

The way the question was framed meant people - very clever people, using ingenious experimental techniques - went looking for the wrong sort of answer ('things' vs reactions) in the wrong place. Despite their best efforts, they never got far.

Here's a suggestion. The everyday words we use to describe marketing - 'product', 'service', 'consumer', 'brand', 'market' - are the earth, air, fire and water of our day. They frame our challenge in such a way that we often end up looking for the wrong sort of answer in the wrong places.

To see this, let's try describing our world without using those familiar words. It's full of busy people wrestling with the challenge of organising and living their lives. They have a host of parallel processes (such as 'manage my money', 'tidy the house', 'keep fit') to stay on top of, plus an endless stream of episodes and events big and small (such as 'get married', 'move home', 'go on holiday' or 'organise a dinner party').

Common characteristics

Zoom in a little closer and we find each of these life management processes and episodes displays four common characteristics. First, there is 'strategising': setting goals, planning, prioritising, managing trade-offs and so on. We need to strategise at two levels: the individual process or episode; and their totality, how we bring them all together to create a non-chaotic, fulfilling life.

Second, each process and episode generates its own integration challenge. The episode 'organise a dinner party', for example, involves a wide range of tasks such as deciding whom to invite and how, what to feed them, getting the food and cooking it, making the place look nice, serving the meal, and so on.

Third, each process and episode requires a range of different ingredients or inputs - the food and drink at the dinner party, for example.

Finally, the process of acquiring these inputs creates its own challenges of decision-making and navigation: how to find and buy the ingredients that are best for this particular job?

Life processes and episodes. Strategising, integrating, navigating. What unites them all? Answer: they all depend on the investments we make in them - investments of personal assets.

There's time, for a start. How much time will it take? Have I got that time to spare? There's physical work: lifting, carrying, moving (the weekly grocery shop is a trifle if you have a car, but lugging it home on foot is a different matter altogether. Sometimes, some tasks just seem like too much hard work). There's attention: making those plans, thinking through those trade-offs. How often do you think 'I really don't want to have to think about this right now'?

There's skill, information and expertise - choosing the recipe for the dinner-party meal, knowing how to put the ingredients together (remember all the time and effort that went into developing those skills and knowledge). There's emotion. When push comes to shove, the only reason for having that dinner party is to generate some desired emotional outcome. Along the way there's some risk, stress and so on. Finally, of course, there's money. When we strategise, integrate and navigate, then we are constantly trading some personal assets/investments (energy, time, attention, information/skill/knowledge, emotion, money) against others, in complex calculations that we ourselves probably don't understand. (We spend money to buy a car to reduce the effort of carrying stuff. That's one factor in our car-buying decision, but how much of a factor?)

Consumers' contribution

Second, each investment presents us with the choice of investing less or more: to reduce the investment (streamline or stop), or increase it (enrich)? With the dinner party, we increased our investment to enrich the outcome. Mid-week, after a hard day's work, we might streamline by buying some fast food to devote available time, attention and energy to other things.

Now let's circle back to products, consumers, and markets. These are industrial age notions that close our eyes to much of the world around us. The industrial age taught us that value comes from the features and functions we embed into our products and services via our operations. We then sell this value to 'consumers' who 'consume' it.

Of course, there is value in these features and functions. Yet, they are not the whole picture. They hardly register any of the strategising, integrating and navigating - along with all the investments of personal assets they require - that has to take place behind the scenes. In fact, this vision of value focuses marketers' attention on a small part of the overall picture.

Meanwhile, by treating people as 'consumers' it fails to address their real role as the producers, investors and creators of their own lives. By defining markets in terms of products with similar attributes, it fails to recognise the underlying forces that shape economic activity - elemental markets for individuals' investments of time, attention, energy and money.

The bottom line is very simple. Value comes in two dimensions: content (features and functions - did that dinner-party cheese taste good?), and personal ROI. Features and functions are essential but brands and organisations truly flourish when they also improve their customers' metrics - when they help customers get a higher return on their investments of time, money, energy and attention.

Balance equation

Yet, right now, we remain woefully ignorant of the personal asset investments people make in ongoing life processes such as 'manage my money' or 'tidy the house', or in life episodes such as 'move home' or 'organise a dinner party'. We have little idea of the personal investment trade-offs different groups of people prefer to make. What different patterns or profiles are there? We're also basically clueless as to how our go-to-market strategies and tactics wield an impact on personal ROIs. When it comes to navigation, are we saving people time and energy for example, or increasing the workload?

In short, the most important metric in marketing - personal ROI - remains superficially understood, largely ignored and unquantified. In fact, our current approach to marketing metrics compounds this problem via its narcissism. Today's marketing metrics focus on only one side of the equation in isolation - the organisation's side. They ask in detail 'how much did it cost us?' and 'what benefit did we get?' but they never complete the full equation by including the other side's ROI.

The result is a value equation where one half remains opaque or invisible. In principle, such an equation can never be solved. We're not seeing the chemical reaction. We're looking for the answers in the wrong place. Then we wonder why it's so hard to demonstrate marketing accountability and effectiveness.

Alan Mitchell is a respected author and a founder of Ctrl-Shift and Mydex.