Action Oriented Metrics

Here's another post encouraging practicality as you endevour to measure your interactive activities. I've already written a few times about the benefits of finding and tracking your KPIs (Key Performance Indicators). I'd like to focus on the basic ideas behind KPIs and a little more about what they are nd what they are not.

Yesterday, I attended a lunch meeting hosted by the Houston Interactive Marketing Association. Scott Berg from HP gave a presentation titled The "Big Bang" of Consumer and Business Marketing Interestingly, there were alot of similarities between the concepts he was presenting and the table conversation prior to the presentation. Scott hit a few points over and over again. He emphasized how important search is and how it ties the rest of your online activities together and he said a few times that some metrics like "time on site" are not very valuable metrics to look at. I immediately realized that I'd spend about an hour on Verizon's site as I was trying to use it to download a new driver for my wireless card and then diagnose the trouble I was having. I truly would have preferred to have spent LESS time on their site the other day. If you are one that considers a long time on site to be a good KPI, I would encourage you to carefully consider that metric. Ironically, I've mentioned previously that Time on Site CAN be a good KPI. That's true- it may be a good KPI especially with a lack of other metrics.

Scott says that he has asked colleagues at HP to explain to him what he can learn from a number like time on site. In HP's case, it's possible that they may be interested in tracking time on site on their support pages in an attempt to reduce the average whereas they may want their time of site to remain stable on their product related pages.

However, if you are a publisher, time on site may be valuable to understand "engagement." If you are attempting to sell banner ads, you may be most interested in the time on site and the number of pages per visitor. You'll likely be interested in the ratio between the two and hope that they both grow over time.

The question still remains. What can you learn from a number like time on site? What can DO with that number? For that matter, what can you DO with any KPI? The idea of action oriented metrics is typically a tricky one. It requires exploring your data to look for changes that may be clues to things that are going well or things that are not going as well as they were or as well as you'd like.

KPI's are only as good as your ability to act on them. There are some numbers that will change over time inexplicably and there may be absolutely nothing you can do about it. That's very frustrating to a marketer. The big trick is to figure out the answer to that bigger question. What are my action oriented metrics? What can I DO with all these numbers?

I had the pleasure of working with lots of really smart people in my career. One of the smartest and most influential was certainly John Marshall the former CEO of ClickTracks (now Lyris). He was passionate about lots of things. Everyone in the company knew full well how much he disliked pie charts- especially 3d pie charts. We all also understood how much he disliked the concept of a dashboard. His point is very applicable to this topic. Consider the very thing that an analytics dashboard is typically modelled after. How often do you look at the dashboard of your car? When you first get your car, you need to figure out what each "metric" is and why it is valuable to you. Then- once you start driving, it's pretty typical to only glance down at it from time to time but especially when you see a cop. Perhaps you could liken that to a suprise visit from your boss who walks into your office to find out why your online sales are down. The fuel guage becomes important once the little yellow light comes on. The point is that some of the data provided on the dashboard of your car provide you with actionable data. You know exactly what to do with it when you see it. If you have an analytics dashboard, do you have any idea what to do with the data when it changes? Where is the accelerator for your website? Perhaps that's your paid search campaign that needs more budget or a tweek of the keywords you are buying. Maybe you need to consider a special offer to repeat customers along with a way to promote it to them? Or perhaps the number of visitors to your website means absolutely nothing to you and there is simply nothing that needs to be done about it.

Ok great. So now how do you find your action oriented metrics? I suggest you think like your customer. Go to your website as a potential customer. Have a few people who have never been to your site do the same thing. Does it work in the ways that you would expect? Perhaps you have a sales funnel that you can articulate in your analytics package. If you've recently changed anything, verify that it's working the way you expect. Think about your website and the experience your customer is likely to desire. To borrow a concept from Scott Berg, think of your site as an ecosystem. What metrics are important in YOUR ecosystem? Find your baseline and your benchmarks and you're likely to discover your action oriented metrics in that process.