If we want to see your data impact trends, then we need to look at metrics rather than just tracking data. The thing is that we have to track to produce the metrics. But it’s seeing the trends in metrics that really drives business outcomes and behavioural change
These days we are awash with data. Whether its fitness wearables, personal financial planners or business apps, it seems every tool we use has some way to provide reporting mechanisms. It’s almost a must-have feature in any new product.
Yet, I question if people really understand how all this data can help them. Do they know how to get the most from their data? Is there a real data impact on outcomes? Or is just being able to collect it or see it give them a vain sense of control.
To borrow from Lean Analytics (Croll & Yoskovitz), one of the key points of analytics is to use measurable data to drive business outcomes or behaviour change. Decisions around what data to collect and how to interpret or measure the data starts with your goals. Then the metric you use needs to measure that goal, or inform on progress towards it.
So we are tracking everything, but can we see the impact?
In simple language, metrics should measure something, rather than just track or report. I do believe that tracking and reporting have their usefulness in informing us, they just aren’t analytics.
Let’s take an easy personal world example. Health practitioners advise that in order to successfully lose weight we should track and record our food intake. This is even a great tactic to maintain an ideal weight. There is such a plethora of diet trackers out there. If this was all it took, the world should be full of skinny people. Instead it seems it’s trending towards obesity as the norm. Tracking your weight and tracking your food intake alone doesn’t lead to a long term change in behaviour. (Though there is more to maintaining an ideal weight than behaviour!)
What might be more useful would be a way to report on the impact of the behavior change and the weight loss effort. Let’s consider an example. Let’s say you are tracking the amount and quality of the food you ate. And tracking weekly weight loss over time. A metric that compared the two, might be a more interesting metric to change. You might be more inclined to track your food intake, if you saw that it impacted your weight loss efforts. You might also see a reverse in the trend in the holiday season! Or if you went out for a big celebration dinner. So that the next time we go out, we don’t completely fall of the wagon. Or we live with the temporary pause in progress.
Looking at metrics rather than just tracking data is key to impacting an outcome
Going back into the business world. An area where most companies measure performance and try to see trends is marketing and sales funnel metrics. Both in terms of outbound contact by real people, and inbound activity on a website. There are different types of tracking information and metrics that can be collected.
What we now call vanity metrics – visits to a website, time on a page, and even number of cold calls made – are actually more like tracking information. They provide some level of detailed information. But they don’t provide insight that might change behavior or validate the success of the step in the funnel.
A better metric for an outbound sales funnel might be tracking cold calls vs number of sales appointments arranged. And then tracking sales appoints arranged vs successful sales. Armed with this information, a sales person sees the number of cold calls that they need to make to achieve a sales target. It can spurn them on to achieve a target number of calls in a day. If they were on tracking calls made, then they are tracking a business action, not a metric.
Can we make conversion to our CTA a stronger metric rather than a data point?
As a standalone data point, the number of conversions of a call to action doesn’t have a follow-on impact. It’s popular to track total conversions, but it’s also often not showed in context. A stronger metric is Conversion Rate. And measuring that either by stage, or campaign, or product or sales person, also lets us see a trend. An even stronger metric to measure performance of the marketing campaign would be measuring trends in Customer Acquisition costs. We can use these to compare different marketing campaigns in terms of which generated better quality leads based on cost and effort. Then the data can impact decisions about the next campaign.
When we understand what makes a quality metric a knock on impact is that we understand better what we want to see on a business dashboard. We want to see data that has an impact. Vanity metrics no longer make it onto executive reports. It might be useful to have this detail at some level in the organization. For example the person who is designing the web page might use CTA conversion numbers when designing a page. But it doesn’t inform the executive who is trying to decide how to best spend their marketing budget.
The business dashboard that you design needs to contain the metrics that provide the best picture of the goals of your business. First understand what you are trying to do in terms of financial goals, traction and growth, and customer satisfaction. Then given the data that is available to you, find ways that you can present metrics and trends that provide insights into the progress and performance towards these goals.