Appearing first in a book before being adapted into an Oscar-winning film, the term Moneyball was coined by author Michael Lewis to describe the player performance methodology used by a small-market baseball team like the Oakland A’s to compete with financial heavyweights like the New York Yankees. The A’s General Manager, Billy Beane (played by Brad Pitt in the film), measured players using new, data-centric metrics that flew in the face of conventional wisdom. Before Moneyball, baseball scouts relied on popular but flawed Key Performance Indicators (KPIs) like RBIs (Runs Batted In) and how a player looked (aka “gut instincts”) to judge his effectiveness. But technological advances and a better understanding of statistical correlations employed by Moneyball practitioners like Beane made these old scouting reports obsolete and uncovered hidden gems amongst the player rosters. So what does this have to do with Marketing Automation?
Your goal shouldn't be to buy players. Your goal should be to buy wins. In order buy wins, you need to buys runs.
Historically, sales people and marketers had KPIs they loved to track:
We asked Justin Gray, CEO and founder of LeadMD, on what KPIs are most outdated and here’s what he had to say about the traditional ‘net new’ leads metric:
“The ‘new leads’ of yesterday is equivalent to the ‘new names’ of today. Most marketers are still looking for new names each month. New names mean almost nothing. What happens when you know who all of your prospective buyers are? If buying lists taught marketers anything it was that buying contact information does not yield significant results. Interest yields results. The definition of “lead” should not be contact information–a lead must have interest. Look to marketing qualified leads (MQLs) as your first metric and don’t set qualification criteria for MQL’s that are industry or revenue based! Behavior and alignment to buyer persona are the only true indicators of lead qualification.”
These old KPIs are not necessarily “wrong” but they paint a wide brush over what’s actually going on with your sales & marketing funnel, which can sometimes lead to a misallocation of resources and the wrong strategy. Marketing automation tools enable marketers to track the costs associated with each channel and campaign, and allocate a direct cost to acquire each lead. And by working with your CRM tool, sales and customer success team, you can then attribute the lifetime value of the customer back to the lead. Here are some new KPIs you should consider if you want to be a Moneyball Marketer:
Ultimately, the measuring stick every company uses is profit. Don’t be blinded by the old KPIs and measure your top-line and bottom-line with Moneyball Marketing.
If we try to play like the Yankees in here, we will lose to the Yankees out there.
Now that you are using the right KPIs, what next? Just like the Oakland A’s couldn’t assemble a lineup the way the Yankees did, a Moneyball Marketer has to open up her repertoire to include data analytics, customer engagement and product development. Whether or not you want to call this growth hacking or not, a Moneyball Marketer’s playbook is different from a traditional marketer’s. Here are some tricks of the trade you should consider:
Marketing with a Moneyball mentality isn’t just generating leads and passing them onto sales. Take advantage of your new marketing channels and new KPIs and impact product and sales directly.
How can you not get romantic about baseball?
If there’s one take-away here, it should be to really stress your marketing automation and CRM tools to get the data you need, then whip your marketing and sales team in shape so they leverage that data into more sales, larger profits and happier customers. Moneyball for marketers isn’t relatively a new concept; just branded differently. Some call it growth hacking. Others may call it the Physics of Marketing. Statistician Bill James is often credited with starting the sabermetrics Moneyball movement, but Billy Beane is the man who popularized it. If Marketo’s Jon Miller is the Bill James of Marketing, make sure you are your organization’s Billy Beane.
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