3 Key Questions To Ask About Your Metrics

Now that I’m on my “world tour” of summer speaking, I’m having the rather pleasant opportunity of listening to people talk about their marketing challenges. One consistent theme that keeps cropping up is about metrics, and more importantly, the use of them in your marketing. It would seem a lot of folks are bewildered by the sheer volume of data available to them, and aren’t sure what to pay attention to.

There are 3 key questions you need to ask about your metrics, key performance indicators, stats, etc. that will greatly clarify things for you and help you choose what to measure.

1. How valuable is the metric?

One of the best places to start in any discussion of metrics is to figure out where the metric comes from and how valuable it is. As a general rule of thumb, the more valuable a metric is, the harder it is to obtain.

For example, knowing how many Twitter followers you have is a very easy number to come by. Knowing how many Twitter followers are active prospects for your business is significantly harder (and more valuable), since it involves tying together Twitter and your CRM.

Knowing how many Twitter followers are influential broadly is easy. You can use any number of sites like Klout, Tweetreach, etc. to get rough, big numbers. How many Twitter followers are influential specifically to the subset of Twitter users that are your key demographic is significantly harder and requires a lot of data mapping.

As Tom Webster of Edison Research says, do the work. Figure out what metrics will provide real value for you.

2. What does the metric mean?

Metrics by themselves are meaningless, even if they’re reliable and valuable, if you don’t understand their value to your business. For example, one of the more valuable statistics in web analytics is absolute unique visitors to your website. This number tells you an approximation of how many human beings actually laid eyes on your site.

What does this mean? By itself, not much. You can tell day to day or week to week that it’s going up or down, but if you have no other context or framework for it, it’s largely unhelpful. Once you put it in the context of a marketing funnel, however, it becomes a lot more meaningful. A general rule of thumb is that every meaningful metric has a subsequent meaningful metric that provides even more value. Audience numbers lead to prospects, which lead to leads, which lead to sales, which lead to repeat customers, which lead to evangelists, which lead back to more audience.

For example, absolute unique visitors is a metric near the top of your funnel, the prospective customers who walk into your online shop to browse. They wouldn’t be there if there wasn’t some tiny sliver of interest in who you are and what you have to offer. If no one is walking into your shop, the best conversion metrics are useless. Conversely, if you have crowds of people walking into your shop daily, you can start to talk meaningfully about lead generation or customer conversion.

3. What should you do about it?

This last question is the least asked about metrics, yet is the most valuable of all. If you’re aboard a cruise ship that is taking on water, there are lots of meaningful, valuable metrics. How many people are there aboard, and are there enough lifeboats? How fast is the ship sinking? How much time do you have left?

All of those metrics are totally irrelevant (despite their perceived value) if you’re not actually getting off the sinking ship. You can have the best metrics dashboard in the world, and without taking action, it will be a terrific seat to watch failure from.

The true power of a metric is to tell you early enough when you need to make changes, and what needs to be changed. If you’re measuring a marketing funnel, for example, every stage in the funnel past the first one has a cause and effect. The number of leads you generate is caused by how attractive your inbound marketing is or how effective your advertising is, and affects how many sales you make. If your business is in trouble for any reason, do what Ken Savage of the Winchendon Martial Arts Center advocates for martial artists: look to the immediate previous step to see the mistake you made and what to fix. Not enough sales? Check your lead flow. Not enough leads? Check your inbound audience numbers.

Ask these three questions in order to make sense of the many metrics and data points available to you. If you have a metric that fails the tests these questions ask, put it to the side and work on finding metrics that provide valuable answers to all three questions.

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