The term “metrics” may sound scary, but it shouldn’t. Metrics are simply a way for business owners and marketers to measure the effectiveness of their campaigns. Understanding the metrics will help you improve your marketing ROI.
The problem with metrics is knowing which ones are the most relevant. It also helps to fully understand why you should prioritize metrics, as well as the vast difference between vanity metrics and actionable metrics.
However, it’s important to keep in mind that one size rarely fits all. So, consider this article as a guide on how you can best decide what metrics are important for your business and marketing goals at this particular time.
Why You Should Prioritize Metrics?
There are a lot of ways and places to find interesting metrics. Utilizing a resource like Google My Business allows companies to see what interactions customers are initiating with them, which can result in actionable takeaways for the company.
Metrics can tell us vital information about the health of a business or organization, including what’s working and what isn’t working. The problem is that the sea of data is vast and includes checking results of email campaigns, visitor traffic to websites, Facebook Ads results, and so many other things at once.
Source: Google
Gathering all the numbers is a big project, as is analyzing them. iSixSigma sums up the importance of metrics by saying, “Metrics are used to drive improvements and help businesses focus their people and resources on what’s important.”
They elaborate on this, stating that metrics can be used to track a number of things, including:
- Increases in efficiency
- Reductions in complaints
- Greater profits or savings
By examining the numbers, they can tell an organization:
- Where it has been
- Where it’s going
- If something is wrong
- When targets have been reached
The problem comes in knowing which numbers to pay attention to. Unfortunately, there are a lot of vanity metrics that look good on paper but aren’t necessarily good indicators of performance.
Difference Between Vanity & Actionable Metrics
Vanity metrics can be defined as statistics that suggest that your marketing efforts are yielding good results, but aren’t truly actionable. Website traffic metrics are a great example of vanity metrics; seeing growth month after month indicates that your marketing efforts are working, but that simple statistic alone can’t inform how you should run your campaign. Obviously, tracking things that don’t matter is a big waste of time and energy.
Truly actionable metrics are connected to specific processes you can improve upon that further your attempts to meet business objectives. However, if you can’t do anything to improve a metric — in other words, if it’s not actionable — then why track it to begin with?
Source: Author
While vanity metrics may indicate that your business is improving, they cannot help you improve your marketing efforts. If a company finds they’ve been relying too heavily on vanity metrics, a smart shift involves turning those vanity metrics into actionable metrics and understand which are the best metrics to gauge progress.
Most Relevant Metrics
Most businesses or organizations get distracted by numbers that are mostly meaningless instead of focusing on strategies and actions they can take to build a better business. It all begins with goals.
A business would benefit by first determining what its goals are. Once you know those main goals, you can then determine what metrics you need to track. However, goals can change as the business grows, and there are a few metrics to pay attention to depending on the business’ life cycle.
- Infant: Website traffic, subscribers, followers, social shares, etc.
- Adolescent: Sales, revenue, conversion rates, time on site, etc.
- Mature: Profit, retention length, churn rate, revenue per customer, etc.
The best metrics to follow will always be those in line with your goals and the life cycle of your business or organization. However, here are some good generally helpful metrics to track and follow:
- Current active customers/subscribers
- Monthly revenue
- New customers and customer lost
- Monthly churn
- Retention rate
- Where customers/subscribers bought your product or services
Don’t you hate when you get to the end of a blog post and the answer is: It depends? The problem is that it actually does depend, and one size never ever fits all. You may also be wondering if digital marketing is a worthy investment or an unnecessary expense. It also depends on whether you’re doing it right.
Looking for tips and strategies to help build your sales? Continue reading on 60 Second Marketer.
About the Author: Sam Bowman writes about marketing, tech, and how the two merge. He enjoys getting to utilize the internet for community without actually having to leave his house. In his spare time he likes running, reading, and combining the two in a run to his local bookstore.