Sunday, May 5, 2013

KPIs vs. Metrics

They're not the same thing. 

We have countless metrics to sort through, and "big data" is all the rage right now.  There are excellent social media and digital marketing metrics that can help, but that doesn't mean they should be your company's key performance indicators.

(I'm borrowing and summarizing a few excellent posts from Avinash Kaushik's blog, particularly his latest, "Eight Silly Data Myths Marketing People Believe That Get Them Fired.")

Helpful metrics are usually diagnostic in nature.  Most often, they show when something is broken or just plain crappy. Bounce rate, for example, is an excellent metric, but it's more of a tool than the end goal.

Key Performance Indicators, however, are the things you should "obsess" over, according to Kaushik.

Here's a list of excellent metrics for different businesses, depending on your size.  While these metrics are pretty universal, it's up to us to decide which ones are our KPIs.

One of the most helpful points Kaushik makes is the tendency for bosses or clients to get obsessed with trendy and dumbed-down metrics, like Likes, followers, and Impresssions. (It was actually one of the issues I had with the Wisp "deliverables")  Oh, and real-time data.

Two main thinking points from Kaushik to remember for me:

1. "If you are not spending 30% of your time in 2013 with data, Ms./Mr. Marketer, you'll fail to achieve professional success."
2. "I don't want real-time data, I want right-time data. Let's understand the speed of decision making in our company. If we make real-time decisions, let's get real-time data. If we make decisions over two days, let's go with that data cycle. If it take ten days to make a decision to change bids on our PPC campaigns, let's go with that data cycle." 

So the big questions I have to ask are, what are our KPIs for social media? How do I bring and show dollar value to a conversational medium?  How can I produce leads authentically and without scaring away potential customers?

2 comments:

  1. AJ, I agree. I think that many businesses are focused on KPI's that don't really indicate whether or not they are performing well. I worked as an Internal Auditor at my company for several years, and I would always ask our internal client what their KPI's were measuring and why it was relevant? Most of the time people wouldn't really know why they were measuring certain things, but because it was always done they continued performing the same measurement. When my company looked at all of the KPI's used by different project management offices they really asked managers what type of metrics would be useful to them to run their business. Go figure! we found out that none of them were using those old-timey KPI's as a PI. As business evolves you have to continuously update your performance indicators vs. using what has always been used. When we were in China at Kimberly Clark, someone asked our speaker about KC's KPI's for social media. We were all on our seats to hear, b/c as we all know finding great KPI's for SM is difficult. And true to form KC didn't really have any. With that said, it will be interesting to hear in class what KPI's outside of number of followers, retweets, etc. exist to let a company know if their social media campaign is really working...

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    1. Good word. I think that social media types LOVE to fall back on, "Well, it's hard to measure exactly," at which point all non-social media people roll their eyes.

      Some elements can't have a dollar amount tied to it, and not every metric means the same thing for every business. But we can't stop there and deem it unnecessary. There ARE ways to measure, and the old ways may not work or look the same online. The challenge is to tell an accurate and engaging story, to find the narrative of your metrics as they relate to KPIs. Thanks for the reply!

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