A Recipe for Disaster – KPIs without a Measurement Strategy

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As we approach the end of the year, I’ve worked with some of our clients to review the digital initiatives and measurement efforts they’ve launched over the past 12 months (with both success and failure). I am a firm believer in streamlining process and efficiency which is probably why I am involved in the web analytics industry. One of the issues that stands out across the board is the lack of a measurement strategy. While most organizations understand the need for online measurement — it seems little time is spent understanding why or how they will measure it. Instead, they just start measuring everything which leads to the inevitable question:

“Okay, so what do all of these numbers mean?”

The topic that always follows and is extremely popular in the realm of web analytics are key performance indicators, or KPIs. While they certainly have their place in not just web analytics but all metric based initiatives, they are very often used as a solution to the problem rather than a tool.I am often asked what “good KPIs” are and my response is always the same. Good KPIs are simply the correct KPIs that are actionable and easy to understand.

To prevent unactionable and confusing inefficiencies caused by KPIs, I would urge everyone to begin (or take a step back) by asking yourselves a simple question:

What is the main purpose for measuring our digital activity?

While every measurement program has differing objectives, here are some key areas to defining your measurement program’s strategy:

  1. Objectives
    1. What are your organization’s objectives?
    2. Who are the stakeholders for this measurement program and what are their objectives?
    3. What are the objectives of your website on a high-level and within each functional area?
  2. Decision making
    1. Who will be responsible for decision making within this measurement program?
    2. Existing measurement programs
    3. What reporting strategies are already in place?
    4. What existing report data is actionable?
    5. What else can you learn from existing reporting?
  3. Benchmarking
    1. How will you define benchmarking? Against competitors? Against existing data? After setting baselines?
  4. Measurement frameworks
    1. How will reports, actions and insight be delivered to each area of your business or stakeholder?
  5. Analysis
    1. What level of in-depth analysis will exist within your measurement program?
    2. What is the framework for analysis?
    3. How does the decision making process differ for this level of insight?

Only once you understand your measurement program at this level can you begin to identify KPIs and their action plans. While this material above may be second nature for WA experts and practitioners in the field, I urge everyone to step back for a moment and identify the gaps in your measurement program. 

I’m very interested to hear from you on this subject (contact me directly if you’d like to discuss, but want your comments kept private)  What are your answers to these questions: 

  1. Have you spent the time upfront identifying a strategic measurement program?
  2. Where are the gaps in your measurement program?
  3. Is your organization successful in measuring online activity? How do you know?
  4. What are other important aspects of a measurement strategy?
  • Debra Paynter

    The question I ask all my clients especially when discussing KPI’s, “How do you measure success?” I think KPI’s should not only be actionable but attainable. Also, to expand on your #2 point from Objectives, what one team determines as their measure of success will likely not be the same measure for another team. When you are laying out what metrics you will utilize as your performance indicators lean heavily on the input from each of your business users/teams which may lead to different sets of KPI’s for the various teams. This does not take away from creating a set of standard metrics that are used across the entire organization. Standards and KPI’s are not intended to be the same set of metrics.

    Another tip, guide teams towards simplicity basically repeating what you said, “they just start measuring everything “. More is definitely not best or even better.

    My last comment, give your teams the opportunity to show off their wins and you are more likely to engage their interest for deeper and more meaningful projects.

    Thanks for letting me share some of your space.

  • http://www.waomarketing.com/blog Jacques Warren

    Also, it is interesting to note that the available research (Stratigent, T. Davenport, W. Eckerson) shows that determining KPIs is a necessary step for reaching the analytical level as an organization; companies who don’t go through that process will indefinitely stay at the basic reporting stage (the one with the least value, if at all), according to those sources.

  • http://www.syzygy.co.uk Jonny Longden

    I would add to this list: what is your customer journey/experience?

    For me, KPIs should always be linked to what the customer gets out of the experience they have on your website. For example, in the automotive industry the customer journey typically moves along a [simplified] path of e.g. awareness > familiarity > consideration > purchase > repurchase. Therefore the KPIs can be guided by this journey, for example: UVs > engagement/task completion > lead conversion > sales > retention.