The challenge with marketing data is making sure you are tracking metrics that demonstrate ROI. It’s easy to get lost in piles of unorganized data – like someone backing the truck up and pouring data all over your desk. How do we get organized and make our reporting more efficient?
Goals, KPIs, Metrics
GOALS – a goal is the cumulative number of actions that you’re aiming for. 100 signups, 10k in revenue, 500 downloads. The goal numbers are typically set by the business (or the client) and are a measure of the health and growth of the business. Website traffic is great, but it doesn’t necessarily tell you if you have more revenue. You might just have people that are curious about you, stumbled upon your website, or like to read your blog to get ideas.
KPI – A KPI, or key performance indicator, is a number that can get your promoted or fired. It’s a number against which your efforts are measured. These are generally special metrics where an action or transaction has taken place with your customer that directly leads to or contributes to a goal. They include conversions, such as newsletter signup, a purchase of something, or a download or a paper.
METRICS – Metrics are numbers, plain and simple. You likely have a surplus of metrics, Where you can get into trouble is if you’re not collecting the right metrics. Examples of metrics include website traffic, new and returning users, likes on a social post or clicks on a link. Traditionally, these are not KPIs – the two are very often confused.
That said, there are always exceptions. Sometimes your goals won’t be transactional. Your goal could be the total number of social media followers or content engagement. Ultimately, you start with the goal first and drill down from there. The order of operations is to determine the business goals, outline the KPIs that will help you track your progress to your goals, and then you can figure out which metrics will roll up into those KPIs.
How to determine what to track
You always need to start with the goal. What question are you trying to answer? What number does the business care about the most? What number do you care about? For most companies, revenue is a safe bet, so let’s use that example.
If your goal is to increase revenue 10% from the previous year, which equals 100K for easy math, you can then start to determine which metrics move you closer to your goal, and which metrics don’t. When outlining the KPIs that roll up into the goal, your KPIs should be metrics that immediately precede and cause revenue. For example – If you conduct transactions through your website, then KPIs would be things like the number of shopping carts filled. If that number went to zero, your revenue would be zero and you’d be fired. To continue the eCommerce example, if 10% of customers check out, and each checked out cart is worth $100, then the effective value of a filled cart before checkout is $10. If you have a revenue goal of $100,000, then you need 10,000 filled carts to hit your goal. 10,000 filled carts is your KPI. If you have 12 months (a year) to reach your goal, you need 833 filled carts a month. Lastly, you need to drive traffic to your website in order for people to get to the carts they need to fill. Using the same 10% conversion rate, you’d need 100,000 site visits per year to get 10,000 carts filled. This is roughly 8,333 visits per month. That’s your metric.
What is the best way to report your Goals, KPIs, and Metrics?
Now that you know what to track, you need to report those numbers. When you set up your report or dashboard, you can organize the data to tell your story. You start with the metrics that matter, followed by your KPIs, ending with your goal. Each piece flows into the next one so that the narrative is clear. For example, “We drove 10k people to the website (Metrics), which lead to 1000 conversions (KPI), which resulted in 100k in revenue (Goal)”. Google Data Studio is a free and relatively easy tool to use for reporting. It seamlessly connects to Google Analytics (and other platforms) for near real-time reporting.
Mapping out your Goals, KPIs, and Metrics is important to make sure you’re collecting the right data and making the right decisions. It’s good to re-evaluate these numbers on a quarterly basis to ensure you are headed in the right direction with your strategies.
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