In the days of traditional advertising, before the rise of digital, there used to be a very simple formula for calculating ROI. If you ran an ad campaign in a magazine over the course of a year, and at the end of that year your business was profitable, you would attribute that profit to your advertising.
In other words: you just didn’t know. Your supposed success was largely based on whether or not your overall business was profitable. You gave your advertising the benefit of the doubt.
Needless to say, digital marketing has changed a lot of things. With the amount of data available to you and your marketing department, you can no longer afford to generalize your ROI. Instead, you can track the entire journey from ad, to impression, to click, to conversion.
The entire customer journey is mapped out according to a series of numbers and small conversion rates. Each step gives us its own granular data that can be tracked down to the finest detail.
That leaves us with a lot of information, and more information is not necessarily better. Just because you have a lot of numbers available to count, doesn’t mean you should count them all.
It’s hard to distinguish the metrics that matter from the ones that don’t. And to be fair, no two businesses will measure the exact same things. Depending on your goals, your strategy, and your execution, your measures of success may be vastly different than your competitors.
With the overwhelming amount of information available to you, choosing the right metrics for your business is paramount to your success.
So, how do you know which metrics matter, and which ones don’t?
When Metrics Matter
Metrics matter when they help improve a process.
Let’s say you set up gated content, like an eBook or webinar, that requires you to fill out a form to access. Your metrics for the landing page might include the traffic to the page vs. the conversions through your form. This is your conversion rate.
But what about the rest of the process? Can you test different kinds of ads to improve the click through rate? Can you make your form more attractive and remove fields to increase your conversion rate? Is there an easy way to qualify those leads after they download your eBook?
Overall, how will each of these specific metrics decrease your cost per qualified lead for your business?
Lower cost per qualified lead = Higher ROI.
Metrics matter when they propel you toward your goals.
You can pay attention to all kinds of numbers online. Follower counts, subscriber rates, likes, shares, retweets, clicks… you get the idea.
There are hundreds of different numbers to pay attention to for any given marketing strategy. But none of them will matter unless they relate directly to your business objectives.
Start with your goals first. Next, develop your strategy. Then track the execution of your tactics as they relate back to your goals.
For example, if your goal is to generate qualified leads for your business, the gated content I mentioned before might be a good tactic to try. And if your goal is qualified leads, you should ultimately be measuring your cost per qualified lead.
If you have an eCommerce site, however, this doesn’t make as much sense. You’d be better off promoting your merchandise and measuring the metrics that relate to your direct sales. You don’t have to qualify your leads, so you don’t have to worry about that stage in your process. Focus on driving direct traffic and conversions instead.
Metrics, when used properly, will help you improve a process as it relates to your business goals. Just make sure you’re measuring the right numbers with your specific objectives in mind.
When Metrics Don’t Matter
Metrics fail when they benefit the platform more than you.
Here’s something that social media sites don’t want you to know: The most prominent metrics on any social network are designed around keeping you on their platform and tracking your behavior.
Think about it: If you want more Twitter followers, you have to spend more time on Twitter, finding and connecting with other Twitter users. If you want more page likes on Facebook, you have to pay to increase your reach to a wider audience.
There are specific strategies for apparent success on each of these networks, but they all involve bending to the will of the network.
Likes, comments, shares, and retweets are all fun numbers to see grow, but the one number that benefits you, in the end, is your click through rate. How many people are clicking through to your content?
Social media sites don’t show that number to you. They don’t want to drive people away from their sites, they want to keep people there!
Don’t worry about numbers that benefit someone else. Focus on what benefits you.
Don’t get distracted by what’s right in front of you. Focus on what’s right for your business.
Metrics fail when they don’t have context.
Is there a reason you check your follower count on Twitter? Or the number of likes you get on your Facebook post? Is there a reason you’re so concerned with the traffic to your site?
What is the context for the numbers you’re tracking? How do these numbers improve a process? How do they relate to your goals?
Keep your goals in focus and use them as a guide for your entire marketing strategy. If the metrics you’re measuring don’t align with them, or they don’t specifically improve a process within that strategy, don’t waste your time on them.
What metrics matter the most to your business?