30 Mar, 2017

What are Meaningful Metrics?

Success. At the end of the day that’s all any organisation wants from their investment in a new web project, but what defines that success? The answer: meaningful metrics. 
If it’s an ecommerce site where financial transactions occur this is sometimes quite simple, revenue generated online. But is it that simple? Are there other metrics that should be looked at? Of course, the answer is yes.
Let’s take the ecommerce example again. End revenue is a key metric, yes, and so is gross profit too (are you selling the goods you make a high or low margin on). But what about overall conversion rate: the percentage of people that buy something on your site. If you could increase your conversion rate in such a way, whilst reducing your marketing overheads (perhaps a lower PPC budget), the end net profit could be better than before, but with less site traffic?
Here’s a quick example of how that could work:
Metric Example 1 Example 2
Average Sale Value £50 £50
PPC Spend £3,000 £1,500
Number Of Sessions 11,000 8,000
Conversion Rate 2.4% 3%
Total Revenue £13,200 £12,000
Revenue Minus PPC Spend £10,200 £10,500

Now the attitude here could be why not keep on spending the same on PPC and increase the conversion rate anyway, as that would (to an upper limit) contribute to net profit. You could look at why the PPC has a lower conversion rate than other traffic sources and address that. You could be happy that you’re spending less to make more bottom line.
Like Google’s search algorithm, the number of elements and metrics that effect the end net profit from your website are huge in number and there are lots of variables to be tweaked. It’s all about context: what are your business goals, how do the different metrics interact, which metrics can you influence most…there are lots of connotations and it can be a mine field, but it’s important you plan for these from start of your project. It’s important you track them, it’s important you update them regularly (what was important last year might not be important now) and it’s important you work with your digital agency to progress them throughout every element of your website.
Naturally, ecommerce KPI and metric analysis is easier than with non-ecommerce sites, there are lots more points that can be analysed and addressed. However, that doesn’t mean that if your site is more brochure-ware that you shouldn’t be investing time and resource in analysing performance outside how many enquiries did you receive this month.
With non-transactional sites, you can look at conversion rates of enquiries as a percentage, you can tier your interactions (you would prioritise a full enquiry over an email sign-up of course, but remember the email sign up is still good to track), look at page quality in terms of how long people spend on your main pages, where do most people leave your site and don’t forget to track your phone leads through platforms like ResponseTap.
Google Analytics is a great place to start with your metric generation, but don’t forget there are other tools out there too such as HotJar, through to full service packages such as Kentico EMS. The EMS allows you to score different visitor interactions and build up sales personas to better customise your content, interact with buyers at the right point in their journey and ensure you only go after leads that are likely to convert because they’re further down the buying funnel.
As the title of this articles denotes, ‘meaningful’ is the key here; no matter what metrics you choose to track, ensure they mean something to you. If Blackberry users in Kazakhstan aren’t a key buyer or demographic for your business, don’t use them in your KPIs, it’s about choosing metrics that, when enhanced over time, contribute directly to your organisation’s bottom line.