Outcomes and Outputs - The Difference and Why it Matters

by John Volkmann One of the many sources of tension in growing a business is the trade-off between being focused and being opportunistic.  If you are too focused, you may miss where your market is telling you to go.  Too opportunistic, and you risk spreading yourself too thin … and scaring prospects away.

This is acutely important in marketing, where the gap between cause and effect is high, as is the hunger for true ROI.   The good news is that the web and social media provide unprecedented capacity to look for correlations in your marketing activity.   Today’s tools raise the bar on expectations for marketing productivity, efficiency and effectiveness.   And today’s business leaders should refine their thinking about how to evaluate the marketing function – regardless of where you are in your evolution as a company.

One of the most important distinctions to keep in mind is that between outputs and outcomes.  An output is a deliverable, untethered by any specific business result, good or bad.   An outcome, on the other hand, is exactly what it implies: a business result.  Outcomes should be where you focus your energy.

Outcomes and Outputs

In measuring marketing ROI, tech entrepreneurs often lose sight of this distinction, setting targets on outputs.  While tangible and measurable – outputs can lead to a false sense of security. Think of it as like counting the miles on a trip, rather than focusing on your efficient, safe, and timely arrival.

Challenge your teams, partners, and yourself with these questions:

  • What are the desired outcomes of this specific output? (Stuck? Try asking "Why" a few times in a row next time you're discussing beginning an activity.)
  • How can I tag my outputs in order to properly correlate them to an outcome?
  • How can I become smarter about getting more ‘work’ out of each output? What information would I need to have to know that I'm getting better or worse results from the activities we perform?
  • How can I measure conversion rates?  (Think of conversion broadly.  Conversion from seeing your billboard to visiting your site.  Conversion of people who see your Tweets into people who engage with you in a conversation on Twitter.  Conversion of people who are leads into people who are paying customers.)