FANTASTIC (albeit basic) article on ClickZ today; reprinted w/o permission but with no malice intended…
What Should You Measure?
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Ever looked into the wrong side of a telescope? Everything’s little. Often, that’s the way interactive marketers view their world.
The Web has been called the most accountable of all media. You can track virtually anything. That can be bad news. We can become overwhelmed by data. This intense focus on data is like looking into the wrong end of a telescope. Why does everyone scrutinize the leaves, roots, branches, and individual trees while forgetting the forest?
This technocentric bias keeps our industry hostage to technology. It’s why so many companies compromise and conform to make technologies fit their businesses instead of insisting objectives drive their online businesses. Fortunes are spent on IT. Little to nothing is spent on sound marketing strategy.
While speaking at a recent seminar, I noticed the quality and quantity of the attendance was impressive. This illustrates a point in a Forrester Research study: focus is shifting to return on investment (ROI) as the Web matures. Last year, the same seminar didn’t get anywhere near the same turnout.
Let’s review some history. The Web has gone through four phases: Pioneer Days was the technology phase (gopher and BBS); Great Expectations was the design phase (Cool Site of the Day); the Marketing Phase was next (we’ll never forget the wake-up call when the bubble burst); and now we have the Business Phase (business objectives and ROI are critical).
How long have we been in the Business Phase? Not long. Just this year, for the first time since their inception, the Webby Awards, will include business awards. They will be judged by analyzing strategy, campaign overview, and, most important, results.
I recently met with a technology company with tens of thousands of employees and tens of billions in sales. I assumed a company that large would have very sophisticated marketing, management, and data analysis capabilities. I would have never imagined a company that size wouldn’t have the most rudimentary understanding of marketing systems, ROI tracking, or defining business objectives in a measurable way — which was exactly the case.
Another company, with $1 billion in sales and several divisions, had me in recently. I pointed out I was unable to have a conversation about the ROI of its Web site because the company hadn’t defined clear business objectives. They were surprised (and maybe a bit insulted), but eventually they agreed.
When we define and meet objectives, e-metrics are much clearer. Objectives are what you want to do and how you will measure success. A proper objective must be quantifiable: for example, 200 qualified leads in the next 30 days or gross product sales of $15 million in the next quarter. Once defined, objectives must be broken down into their component parts and prioritized. Someone must be accountable for that objective.
This isn’t very difficult. After working with and analyzing thousands of commercial sites, we’ve developed a shortcut. On the most elemental level, commercial Web sites come in four flavors that can be mixed and matched. Every commercial site you’ll come across is a subset of one of these four variations:
– E-commerce sites. The objective is increase sales and decrease marketing expenses. On the most basic level, you want to measure sales, returns and allowances, sales per visitor, cost per visitor, and conversion rate. On a more advanced level, you want to measure inventory mix, trend reporting, satisfaction, RFM, and other predictive modeling techniques.
– Content sites. The objective is increase readership, level of interest, and time spent on the site. You want to measure visit length, page views, number of subscribers, and cancellations.
– Lead-generation sites. The objective is increase and segment lead generation. Measure white paper downloads, time spent on the site, newsletter opt-ins, reject rates on contact pages, and leads-to-close ratio.
– Self-service sites. The objective is increase customer satisfaction and decrease support inquiries. Measure decreases in visit length, inbound cal-center metrics, and customer satisfaction metrics.
It’s almost impossible to see the forest when you’re focused on the trees. If you truly want to increase ROI, re-examine your objectives. Ask if your strategy and tactics will get you there.
Are you monitoring your progress? Remember: When you don’t know where you’re going, as the Cheshire Cat told Alice, “it doesn’t matter which way you go.”