Metrics and KPIs: It isn’t just about what you look at, it’s about how
Metrics, they’re everywhere.
As marketers, we’re always reading about the key performance indicators (KPIs) and other metrics that we should be tracking, however, this isn’t even the crux of the issue. Metrics mean nothing without context. Data means nothing without analysis. Metrics are only as useful as the actions we take with them. If we don’t analyze, compare, and take action – no dice, it’s all for nothing.
The first step to proper metric analysis and the subsequent actions we’ll take is understanding the difference between what we call vanity metrics and actionable metrics. While these may seem like digital marketing buzzwords, in reality, understanding them can mean the difference between an evolving marketing plan and a stagnant one. And once we understand the difference, a crucial thing to remember is that no metric exists in a vacuum – everything is, and should be, related.
Vanity or actionable – what kind of performance metric are we looking at?
Vanity metrics are those statistics that we love to look at when they go up: site visitors, social media followers, newsletter subscribers, etc. While it’s fun to know that people are interested in your content, two questions need to be asked: what are these stats actually bringing you, and what can you do with these numbers? The answer to these questions is, honestly: “not much”. Sure, visitors are nice, but are they buying your product or service? Are they bringing you business? It’s pretty difficult to answer these questions with these types of empty metrics.
Actionable metrics on the other hand, are those metrics that you can actually DO something about, those that show a concrete result for your business. Actionable metrics are statistics that can be compared to sales and revenue, and therefore can be used to in turn affect your bottom-line. Which social media content leads to web page visitors and how many of these first time visitors come back for more to eventually take action? Where along the funnel do visitors exit your site? Where along the funnel do visitors become converted customers? These questions can be answered through actionable metrics, and the results can be altered through modification of your digital marketing strategy. THAT’s where the money is. It’s called ROI. And it’s awesome.
KPIs and metrics – go ahead, compare everything
Now that you’ve stopped obsessing over vanity metrics and have started tracking the actionable ones, what are you going to do with them?
Compare metrics over time
First off, even actionable metrics mean nothing if you don’t contextualize them properly. This is why it’s so important track metrics over time. While looking at an instant snapshot of your results can be interesting, you need to see the evolution of your metrics. A digital marketing strategy should be dynamic and malleable – as such, the metrics you use to measure it should also be analyzed in a dynamic way. Monthly comparisons ensure that you can make alterations to your strategy before small issues become big ones. Quarterly comparisons are useful in looking at campaigns and success within the wider context of external factors (such as seasonal issues, market dips, etc.). Meanwhile, yearly comparisons are useful in analyzing success all while removing external factors from the equation and pinpointing peak business periods. While shorter time periods can be interesting to observe, daily web traffic is often too volatile to base your digital strategy on.
Compare metrics to each other
Conversion rate is one of the most commonly used actionable metrics – as it should be. Knowing how many of your visitors take the desired action (be it a purchase, a sign-up, or what-have-you) is imperative to your strategy. However, in order to adequately understand the why and where of this conversion rate, it is important to compare it to other metrics, such as individual page performance (to see what pages are resulting in conversions) or days and visits to purchase (to see how many times a visitor returns before converting). Understanding page performance in relation to conversions can help you optimize those pages that are lower in the conversion numbers, based on those pages that have great conversion rates. In addition, understanding days or visits to purchase in relation to conversion rates is very helpful in painting a clear picture of the sales funnel – by knowing the steps visitors take before converting, it becomes easier to offer them what they’re looking for at the time that they’re looking for it.
Don’t forget, there are a multitude of metrics worth comparing to each other: average order value/traffic sources, bounce rate on mobile/bounce rate on desktop, campaign click-through-rate/conversion rate, sales per session/conversion rate… the opportunities are endless!
Compare your metrics to the competition
I know we’ve all been taught not to compare ourselves to others, but in business, knowing where you rank within your niche market is everything. Metrics that compare you to the competition validate your success or your figurative failures. Seeing yourself gaining ground in terms of pageviews or SEO rankings can be a win for your business… unless the competition is gaining ground at a faster rate. On the flip side, if you see your search rankings slip, recognizing that your competition is also slipping can mean that the market itself is currently agitated, and as such, you need to see it through instead of altering your marketing strategy. Your business’s success is not only measured by your internal success (conversion, revenue, etc.), but also, and especially, the market share that you receive in comparison with your competition.
Data, in and of itself, is empty and meaningless. While keeping track of your metrics is an admirable endeavour, the act of tracking them should beget action… always. Your business depends not on your celebration but on your optimization. Your metrics shouldn’t just show your success, they should help precipitate it.
Knowing where to look and how to look is the first step to this. Check out our next post to see which metrics should be used together to best optimize your digital strategy!