Most business owners know they need to analyse their AdWords and Analytics, but normally they choose the wrong ‘key performance indicators’, and end up measuring rainfall with a thermometer (or the digital equivalent).
The challenge is that there is such a range of measures, it can lead to confusion as you can’t necessarily choose them all. For most businesses there are just two or three main KPIs and the rest, whilst useful, are of much less relevance and importance.
Here are some recent examples of KPI and performance measure confusion…
We were in a meeting recently with a business which generates high value leads through it’s website, however no one in the business really understood which metrics were important and seemingly wanted every metric to improve.
The conversation was centred on bounce rate, time on site and traffic volumes. There was little or no interest in quality of traffic, sources and conversion rate – which are the most important KPIs for this type of business.
Predictably the new direction will probably have the opposite result as their focus drifts from a conversion-led dynamic.
Recently, we pitched a publisher with an advertising model based on sponsorship and advertising impressions. The model is completely reliant on visitor numbers in order to achieve revenues.
Yet, for some inexplicable reason, they were focused on enquiries (for advertising opportunities as well as end users), rather than page impressions, or unique and repeat visitors – but these are the only metrics which directly correlating to and affect their income opportunity.
This lack of focus means they are spending too much energy creating buyers without working on having enough ‘space’ to buy. It’s rather like selling ad space in a one-page magazine!
We also recently advised an ecommerce website. They were measuring their sales, which was a great start, but were not being granular enough about it as they were only measuring spend, without taking into account profit margin.
We discovered that about one third of their orders amounted to 75% of the profit yet, when we looked at their marketing: search as well as email, we realised that they were spending most heavily on low margin products.
With a few tweaks, they’re suddenly much more profitable and at very little additional cost.
One of our bug-bears is the homogenisation of digital marketing. Too many digital agencies apply the same mechanics to all of their clients, regardless of product, price, place and promotion and too many businesses with in-house team don’t focus hard enough on what really matters.
So, if you’ve got your KPIs in a twist – get in touch and we’ll untangle them.