Find out how some simple errors could be sending false positive signals that could put your business at risk. And learn how to avoid them.
No matter how good your marketing results are, it’s always possible to make things better. That’s why good marketers monitor and analyze metrics. It’s the only way you’re able to identify opportunities for improvement and to make the most of what’s working.
The issue: Many marketers make common mistakes when reading, processing, analyzing, and reporting on their data that could lead to false positives. In other words, the results make it seem as if things are performing better than they really are. When this happens, you could be missing out on opportunities — or worse, discovering errors when it’s too late and you’ve fallen short on achieving your organization’s marketing and sales goals.
Even minor miscalculations can send your marketing efforts in the wrong direction in a big way.
Don’t want to become a victim of your own performance metrics? Here’s everything you need to know to feel confident about your numbers, what they mean, and how to respond to them.
WHAT TO KNOW ABOUT ANALYZING YOUR PERFORMANCE METRICS
DON’T CONFUSE METRICS WITH KEY PERFORMANCE INDICATORS (KPIS)
A metric is not the same as — or interchangeable with — a KPI.
What’s the difference? One could get you put on notice. The other could get you fired.
Which is which?
Metrics measure things that add value to your business results but are not absolute measurements of achieving its ultimate goals. Come in a little low on a projected metric and your boss isn’t happy.
KPIs are measurements of your organization’s ultimate performance, reflecting its efficiency and profitability. Fail at achieving a KPI, and you probably no longer have a job.
In some cases, the same number could be a metric for one organization and a KPI for another. Website traffic is an example of one of these.
If you own a deli and your website traffic goes to zero for a period of time, it’s probably not fatal. It might demonstrate less interest in your deli, search engine issues, seasonality, or a systemic failure. But the traffic reduction likely isn’t going to close you down because most of the deli’s business comes from walk-in traffic. In this situation, website traffic has an influence on your business results, you need to look into the issue, you must resolve it, but it isn’t going to bring your business down. In this case, it’s a metric.
If you own an online food service and your website traffic goes to zero, it could be fatal to your organization. Your business is dependent on its website for people to order food. If your online traffic numbers plummet, and the situation lasts long enough, you could be put out of business. When you see this happen you jump on the situation, find out what is causing the issue and resolve it immediately. In this case, website traffic is so critical to the success of your operation, it’s a key performance indicator.
Here’s another way to think about it. KPIs are the numbers that validate your job performance. Ask yourself:
- Which number will earn you a bonus?
- What number will get you a promotion?
- Which could get you fired?
The answers to these questions are the key performance metrics that matter to the ultimate success of your company, which is why they’re the ones that keep you employed, earn you raises or promotions, or get you fired.
Metrics are numbers that feed into KPIs. They’re the smaller indicators that the more critical KPIs could be heading in the wrong direction. Use them to make incremental adjustments that could prevent a KPI disaster. Over time, you may find that you’re tracking metrics that are meaningless because they don’t feed into the bottom line performance of your business. You may be able to stop tracking these and pay more attention to the numbers that are more critical.
Once you understand the difference between a KPI and a meaningful (versus not meaningful) metric, you’ll be better able to cut through the clutter and track what’s important. This will help you avoid errors that result from information overload.
SET STRATEGIC MEASUREMENT PRIORITIES
When you develop your marketing strategies, do you determine your goals and the performance metrics that contribute to them at the same time, or are they more of an afterthought? Maybe you only formulate them when you begin reporting on them to your management team. If that’s your approach, it’s time to change your thinking. Goals and performance metrics must be as integral to the marketing planning process as things like targeting, digital development, media buying, SEO planning, and creative development.
Also, don’t just limit yourself to the standard metrics playbook. Things like page views or social media followers might be meaningful to your campaign… Or not. Maybe coming up with a novel way to measure the quality of leads is more valuable because it’s a better indicator of the likelihood of sales closing.
When you build out a metrics dashboard for a campaign or your overall marketing efforts, really take time to figure out which metrics are genuinely important and which are not. Then, once you start tracking performance, keep checking that you’re monitoring and evaluating the right things. If something turns out to be unimportant, take it off your reporting. If you’re missing something, figure out what it is and start tracking it.
Taking a passive approach to metrics is one of the top reasons for misleading data reporting. If you put as much effort into planning for numbers analysis and reporting as you do building your campaigns, your campaigns will be far more successful over time.
ACKNOWLEDGE THAT MORE DATA ISN’T NECESSARILY BETTER DATA
We’ve already touched on this, but it’s important to stress it again: more data doesn’t necessarily lead to better data analysis and reporting.
In fact, the opposite is generally true. It results in confusion and clouds what’s really meaningful. This is the prime cause of numbers reporting that’s misleading.
Good marketers edit their content and tighten their campaigns until they’re only using the tactics, messages, and images necessary to get people to take action. Anything more could give prospective buyers a reason to abandon. A good data dashboard should be a lot like a good marketing campaign: tight enough to generate meaningful results… and nothing more.
Don’t act before you understand.
Marketers have so much on the line that there’s a tendency to react to bad news too quickly.
The truth: It’s much smarter to act when you have a meaningful amount of data before you adjust a campaign or cancel it.
On day one (or two or three) of a marketing effort, you may see something tanking that’s really just in the process of getting optimized. Wait until you see clear patterns in your data before you change things up. And when you make adjustments, carry them out in a reasonable and rational way. If you change too many things at once, how can you possibly know what’s making your results better or worse? Also, when you adjust things, don’t make too many changes too quickly. It’s like trying to control a runaway vehicle by jerking the steering wheel back and forth. It only makes things worse and usually causes a crash.
In the same way that you lay out a data plan when you develop a marketing strategy, you should also have a plan for how you will adjust campaigns to optimize the things that are working and right the ones that are going wrong. Thinking things through ahead of time will help prevent you from acting out of emotion, or even worse panic, which typically only makes things worse.
The Bottom Line
Getting data right isn’t easy, but if you put as much effort into planning for it, tracking it, analyzing it, reporting on it, and responding to it as you do creating and executing your campaigns, it will pay off in a big way. It will provide you with the information you need to fine tune your campaigns and avoid the issue of misleading data that could cause significant harm to your results and the bottom line performance of your organization.