Metrics are good. Insight is better.
Based on what I've seen and heard in any number of articles and podcasts recently, 2010 is shaping up to be the year of metrics. Metrics are a lens through which we gauge how we're doing. Perhaps the most fundamental metric is known as profit, or what's left after we subtract the cost of delivering our products and services from the revenue we collected.
In the digital space, metrics answer questions such as:
How many people are visiting my website?
What percentage of website visitors used Keyword X to find my website?
How many new Fans did my Facebook page attract during last week's promotion?
What percentage of email recipients opened my recent email campaign, and, of those, how many clicked on the embedded link to go to the sales page on my website?
There is nothing wrong with wanting to know the answers to these questions, but they don't give us the insight we need to change our businesses for the better. I'd like to propose we take things a step further and make 2010 the Year of Insight.
Insight is the intelligence through which we make decisions that improve our businesses. What happens, then, when we improve our questions?
How much did my website's traffic grow from January 2009 to January 2010?
Which keywords—relevant to my business—have shown the greatest gains in search volume over the past month?
What percentage growth in my Facebook page Fan base did I see from last week's promotion compared to the previous promotion?
How do email campaign click-throughs compare between version A and version B of my campaign?
By modifying our questions slightly we begin peeling layers that reveal more interesting data. Some might even declare our job as web marketers done if our objective is to give our clients meaningful metrics. But like the answers from the first set of questions, these answers fall short of providing actionable insights.
Remember, insights help us improve our businesses. To gain insight, metrics must ultimately be connected to higher business goals and objectives. In my business, that means doing things like closing more customers, improving the lifetime value of clients, or improving the efficiency of the firm's delivery process.
The number of unique visits to my website may be important, but only when combined with an understanding of who those visitors are and how they might ultimately help me achieve my business goals and objectives. I will gladly trade you, for example, 100,000 visits per month of low-quality traffic for 100 monthly visits from highly qualified prospects. Even then, those visits are important to me only if I'm moving a meaningful percentage of those prospects through the sales funnel and converting them into customers.
Are metrics important? Absolutely they are. Without good metrics, I can't get the data I need to gain insight. Good metrics, though, are often elusive. They are simply not available in too many situations because insight is often not considered in the planning and execution stages of marketing. To get good metrics, one must measure the right things, and the only surefire way to do that is to be clear up front about what insights may be valuable when you begin planning your next move.