by Jul 28, 2014Reporting

How false metrics mess with the bottom line

Over breakfast this morning, we debated the joy of marketing metrics and more so, false metrics. (Breakfasts are a fun time in our house). False metrics are actually quite amusing as they don’t actually give you what you need, in fact, they distract you and keep you from truly doing what you need to.

False metrics are those little metrics where you’re given a KPI, but in fact that KPI makes no difference to what you actually want to achieve. You might chase the numbers in vanity, but make little difference to the bottom line. A nice analogy about false metrics was made by Seth Godin where he suggests it’s similar to when you go to the gym and use the Stairmaster, but trick it into thinking you’re working harder by using your arms. The machine says you burnt 600 calories, but really…

With marketing, false metrics appear all the time and you hear many a discussion of those measuring and reporting on the wrong metrics. Some examples might be the drive for ‘likes’ in a Facebook campaign, or an SEO campaign to drive increased traffic to your website. In both instances, the metrics are simply vanity.

A smarter way to set KPIs is by looking at the metrics that matter, for example, what is it that you’re ultimately trying to achieve? With the SEO campaign, you’re trying to achieve higher website conversions and ultimately more sales. So surely the correct metric has to be conversions and sales that you can then attribute to SEO?

In a meeting a couple of weeks ago with an SEO agency, we recommended looking at pages per visit and duration of visit to measure the quality of traffic, along with leads (proposals generated) tied back to SEO. They simply weren’t interested and the retort was ‘it’s not my KPI’. They’re being measured on website traffic and bounce rate. For them, they’re concentrating on performing well for their client, regardless of whether that matters to the business.

So let’s say that you achieve your objective of more traffic and a lower bounce rate, you take that to the sales director, what do you think their response would be? (Words I probably can’t repeat here).

Surely, it would be better to brief the agency to improve the up-weight of SEO leads (proposals) by 30%? The focus of the SEO agency would then switch to quality of traffic and website optimisation to ensure conversions. A very different brief where those minor metrics are taken into consideration, but they’re not the be-all and end-all.

What’s more, when you use false metrics, you end up with multiple reporting tools and methods. Finding value and reporting on performance becomes lengthy and complex, because you’re focusing on the wrong metrics. The only way to overcome this is through the use of a marketing automation system that measures and tracks website traffic from initial point of contact (i.e. a search term) right through to sales conversion.

We can’t all afford a fancy system, and whilst it’s complicated to track and measure in a similar way to a marketing automation system, it is possible.

So the next time you set a brief for an agency or for your own campaigns, think about the metrics that matter and how you’re going to demonstrate success. Avoid placing emphasis on those false metrics and turn your attention to those that really matter, even if they’re harder to report on. The acid test being, when you go the sales director; what will their response be to the figures you tell them?

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