A guide to which metrics to focus on and which ones to ignore, charting an evolutionary analytics process that will progressively deliver more impact on that elusive marketing ROI.
Marketers struggling with the explosion in data might take a lesson from Albert Einstein when he famously said, "Not everything that counts can be counted, and not everything that can be counted counts." My meandering thoughts for this column focus on the latter part of this statement, since I believe we've become much too metric happy: measuring too much and not necessarily the right stuff.
Why, you ask? Because the volume and variety of the data, tracking every step in the customer journey, is so daunting that marketers often don't know what questions to ask or which metrics to use. We know we need to make sense of the growing mass of data, yet too often there's not enough method to our madness. Meanwhile, buyers travel their own winding paths to purchase across ever-changing e-commerce websites and social platforms, smartphones and tablets, and in-store visits - leaving even more digital breadcrumbs behind.
What's measurable? Almost everything.
What's meaningful? That's another question altogether.
So let's look at the basics of what needs to be measured. As marketers, we want to know how our marketing activities perform across all channels - online, social, mobile, and offline. The key issue here is actionability. Simply put, actionable metrics should tell the marketer how to act based on the insights revealed by the data. Good key performance indicators (KPIs) help us understand why, when, and where customers buy and give us the insights to improve performance. Ineffective metrics do not definitively show us anything and may even be misleading. I'm not just talking about the obvious, one-dimensional counts of visitors, followers, subscribers, tweets, clicks, page views, email opens, posts, returning visitors, and the like. Even tried-and-true reach, engagement, and conversion KPIs may not give marketers what is needed to truly understand how multi-channel marketing efforts are doing - and what's needed to improve performance.
That's because marketing channels have become increasingly interrelated and interdependent. For instance, an email campaign can go viral and impact how your paid campaigns are performing. Negative sentiment from a competitor can lead to increased traffic and engagement on your web properties. Your social and mobile platforms add to the complexity as they contribute to changes in consumer behavior. Bounce rates, for example, from social sites tend to be highest across all channels as viewers consume content differently than they do on websites. A visitor may come to your site through Facebook and then jump right back into what she was doing, resulting in a high bounce rate for the social channel. Yet, that visitor may have gotten exactly what she needed during that brief interaction with your brand.
A New Framework
My experience in marketing and analytics makes me believe that we need a new framework - a different way of looking at the metrics that matter - in the midst of all this change. We need to differentiate what needs to be measured based on the insights these metrics offer. So here's my guide to which metrics to focus on and which ones to ignore, charting an evolutionary analytics process that will progressively deliver more impact on that elusive marketing ROI:
Unlike descriptive metrics, which are not all that actionable, diagnostic and predictive metrics deliver powerful decision support and deep understanding of the levers of change. When combined effectively, they provide marketers the directional guidance to prescribe a better marketing mix for higher revenue and profitability. These metrics cut through the clutter of data and empower marketers to act now based on the right-time insights to create the desired future for your business.
Can there really be a better definition for metrics that matter?
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Pelin Thorogood, a new media marketing and analytics expert, is CEO and a board director of Anametrix, the first cloud-based, real-time marketing analytics platform. Her career as a high-tech innovator includes leading the go-to-market strategy as CMO of WebSideStory (acquired by Omniture/Adobe), extending Peregrine Systems' enterprise software business (acquired by HP) into web-based applications, and in the mid-1990s launching one of the very first mobile B2B applications. She was named one of the "20 Women to Watch" in sales lead management in 2011 and 2012. Pelin holds a B.S. in Operations Research, Masters in Engineering. and MBA degrees, all from Cornell University, where she also serves as Executive-in-Residence for the Johnson Graduate School of Management. Follow Pelin on Twitter @PelinT.
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