Metrics Mayhem? Define KPIs that Actually Matter

Part 3 of a 3-part series.

dollar signs, people and upward arrows cut out of white paper

There's a metric that can be defined for pretty much everything. There is some number somewhere that can support and validate any cause, and any smart but partially-informed employee (or CEO) can come up with a rubric to support almost any direction change, budget cut or ad spend. Pair that with the relative unfamiliarity/lack of history the upper-level decision makers have with new media, and you get a lot of hazy math. So how the heck is anyone supposed to establish - and trust - a KPI for new media?

The Mayhem of Metrics

When it comes to understanding metrics that matter, there are a few "musts" that should be incorporated into your lead generation strategy. But first, consider the following to establish and measure those valuable KPIs:

Define what you need to measure. From website traffic to click-through rates, sign ups and final sales closed - the answer behind what you're measuring should really be all of the above and more. However, with the amount of data available, peel back the layer and consider "what matters and when" as performance should be measured in stages, not final results.

Determining how to manage all that info (gathering, sorting and analyzing your measurement data) is where time should be invested. During this phase you're going to have to prove your KPIs' reliability. Be thorough, learn by trial and error if needed or call an expert for help if the process you come up with just isn't working for you. Finally and most importantly, you have to figure out what action to take in response to your KPIs' results. Measurement is only knowledge, but how do you apply that knowledge into driving dollars?

New Media Comes with Must-Have KPIs

As far as new media is concerned, there are a few must-have KPIs to establish including target action, conversion rate and committed visitors. Here is a brief breakdown behind each of the fundamental new media KPIs:

KPI #1 : Target Action

Target action is what you want the customer or visitor to do with whatever marketing or advertising material is before them, like scanning a QR code (if it's 2009), filling out a form, making a phone call or simply connecting with the brand to evoke emotion like laughing/crying. Wait, did I just say simply connecting with a brand with no other real action but to evoke emotion? Why yes, yes I did.

Although it's pretty clear that anyone in the products and/or services business has the ultimate goal of funneling leads to customers, there is more to "selling" said products and services that go beyond the standard calls to action. In layman's terms, the Rosen Velocity Scale = "target action 1" (phone calls, forms, QR codes) limits the desired action of creating emotional resonance. Most advertisements today fall short of adhering to the RVS - actually wanting listeners/viewers to laugh, cry, feel impassioned, etc., etc.

I know what you are thinking: If emotional resonance is not "technically" an action, why does it matter? But evoking emotion is much, much bigger than simple brand awareness. Let's consider the following brands that have done this well and haven't:

Brand A: Irish Spring

Ask yourself a real, honest question here: Do you remember the last time you saw a commercial for Irish Spring soap? If you do, did actually go and buy the product? My guess is no. To both. The reality behind Irish Spring Soap commercials is the only thing they do is tell you how to smell better - use their soap. They short change the "after the use of the soap" benefits to smell and freshness that could potentially allow individuals to "go talk to girls" or other generic, uncreative benefits of bathing. Their branding and messaging is tied directly to their product. There is no emotion inflicted in the user of the product, and their ads die short. There is no spark, no sense of sharing, no connectivity.

Brand B: Dove

You can probably already guess where this is going: Dove's Real Beauty Campaigns. If you aren't familiar with the campaigns, then I suggest watching this video and: this one too. Sure, Dove has ads and product pushes in other medians, but they are doing something different with this bit of their marketing. They are evoking emotion. They are empowering women to have confidence and to feel beautiful. And they aren't telling their customers that using Dove is what will make them beautiful. Their mission is powerful and it is social. And it is leaving behind a much, much larger imprint than anything that Irish Spring and other body wash/bath product companies are doing.

End result: Dove is laying down some groundwork. They are softening the beach. With patience and time, Dove's campaigns will influence many and create loyal brand advocates of their products. Taking the time to adhere to the Rosen Velocity Scale means that, when done right, other target actions will come - more clicks, more phone calls, more dollars.

KPI #2 : Conversion Rate

Your conversion rate tells you if you reached your goal for target actions. It compares everyone who saw/heard your message to everyone who did the target action. The equation is simple:

People who clicked your PPC ad / People who saw it = Your conversion rate

Your conversion rate needs to be based on funneling people through each successive stage of your sales funnel, not converting them from bystander to money-down customer. So, each stage of the funnel will have its own conversion rate. Ideally, your conversion rate should increase at each stage. If it doesn't, pinpoint where people are bailing from the process (where the decreased rate is) and start looking for areas of improvement at that stage (could be marketing, customer service, software speed, etc.).

KPI #3 : Committed Visitor

Your committed visitors are your ripest fruit, so to speak. While it's important to point out that there is no set equation for what makes a committed visitor, in general it's going to be someone who spends at least two minutes on your website and clicks to at least two pages.

Your committed visitors are people you need to pay attention to, obviously. Their actions have already told you that maybe there's a chance.

They offer more than just another qualified lead, though.

Here's why coming up with the right definition or equation for your committed visitors matters so much: Say a wholesale clock gear company initially defined a committed visitor as someone who spent 1.5 minutes on the website and clicked to two pages. Once a site viewer met those two qualifications, a "Can I Help You?" live chat box popped up on the screen, where a customer service rep could chat with the visitor to answer questions about the gears and assist with making an order.

So this wholesale clock gear company discovers that people who spend 2+ minutes on the site chat with a CSR 35% less often than the 1.5 minute visitors, and that the 2+ers make a purchasing decision via chat 68% quicker than the 1.5ers. They change their definition of committed visitor, push the chat box appearance back by 30 seconds, and with that single change are able to close the same number of sales using fewer CSR man hours.

Understanding where your committed visitors are in the sales funnel will enormously help you save your company's time and better allocate your efforts.

Get Out of the Numbers

Final word of warning: Finding and defining the right KPIs is invaluable, but it's not the only thing of value when it comes to measuring success. There are numbers and metrics, and then there are relationships. Get out there and talk to your customers and your leads, loop back and ask ex-customers what it was that left them unsatisfied, focus on communication and common sense. All of it pays off.

Read part 1>>
Read part 2 >>

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