With today’s easy access to powerful analytics, we are blessed with BIG data, and a sea of METRICS!
In many ways, it is a blessing and a curse that digital is so measurable. Not all data is helpful.
When we set too many metrics, it’s easy to get confused and lose sight of the real data that matters. This is a problem for marketers, who can end up falling into the more-the-merrier camp. Some of it is worse because it tricks us into believing we have answers when we don’t.
But when we focus on data that helps us make decisions, everything else in business gets easier. Now, more than ever, marketers need to measure the right things.
According to the Internet Advertising Bureau (IAB), a good advertiser is one that builds up benchmarks within their own organisation and selects metrics against the objectives of a given campaign. It all comes down to one thing: does the metric help you make decisions and do you know what you need to do? If not, then you are looking at a vanity metric. Vanity metrics make you feel good as they give an illusion of succeeding, even if you’re not, simply because the numbers are growing. For example, the number of impressions or views.
Simply think: Why are you undertaking this digital initiative? It’s unlikely that views are going to pay the bills. What most businesses are actually looking for is leads and sales, so good metrics will be tied to that.
The main cause of failure in most digital campaigns is often not the lack of creativity or people involved. It is a lack of structured thinking about what the real purpose of the campaign is and what true success looks like.
A complete customer-business journey is defined in Acquisition, Behavior and Outcomes. At their core, your metrics should provide answers to these questions:
• How do you gain or lose revenue?
• How do you gain or lose customers?
• What are the key functions and benefits that people are coming to you for?
Revenue: You need to track where your revenue is coming from. This includes metrics like lifetime value, total revenue, net profit, number of transactions, etc.
Leads: You need to track where your leads are coming from. Social Media? AdWords? Google? This will tell you where you need to spend both your money and energy. With digital marketing, you can track the conversion rates of your traffic sources, primary keywords, and marketing campaigns.
One of your top priorities should be to track the conversion rate of visitors to leads, and leads to customers. When someone comes to your site, they’re a visitor. When they give you their email, fill out a contact form, create a trial account, or add a product to their cart, then they become a lead. When they give you their credit card, they become a customer. Track the conversion rates at each step.
Instead of spending time gathering “number of” metrics (number of Twitter followers, number of clicks, number of Facebook likes), start looking at the big picture. This means connecting marketing campaigns and activities to key organisational goals, like increasing revenue through customer acquisition or growth in dollar share of existing customers.
A new follower or like won’t inform you much about people’s purchase behavior, but their downloading an e-book or requesting a free session might. These metrics should be given more attention to assess whether marketing efforts are performing, and helping your business to move in the right direction.
In summary, set up metrics early that can be measurable from the beginning. Focusing on a limited number—the metrics that really matter—will serve you best. They’ll help you identify which marketing strategies are working and which need to be changed.
Digital marketing is powerful. But don’t get lost in the sea of metrics – focus on what is important for your business, and it can make an enormous difference.