How To Use KPIs Properly

About five years ago – the whole digital marketing field started REALLY worrying about analytics. I mean really worrying.

Many of us started talking about how we were entering an “Age of Accountability”. If you remember that phrase being thrown around, let’s get a beer together and commiserate over how that never really happened.

Those of us who got excited over this impending sea change – weren’t energized just because we were nerds. We were energized because it heralded an era where we as marketers would be able to focus our energies on what mattered. Those single points of truth within our marketing programs, rather than every tiny detail of every single program. Those points of truth were Key Performance Indicators. KPIs.

You see – when we talk about analytics – we could just track everything… But who wants to pay for that? The trick is to track what’s important… What is KEY to your marketing efforts.

So as I’m sure you’re wondering, no. There was no “Age of Accountability”. What we did get was the “We are a culture of measurement”. A very different thing altogether. The first one is about measuring for the sake of determining how we rank in performance… Or more harshly, are you a good or a bad marketer. The second simply says

Le sigh.

So that’s where we’re at today. We measure all the things. It’s messy. And mostly because people still don’t actually know what a KPI actually is.

This is mostly because everyone’s been forced into thinking they have to be good at analytics, and yet – most everyone doesn’t want to have to be good at math… Seems kinda incongruous, no?

Key Performance Indicators – are simply – the MOST important metrics, or even the recalculation of a net new metric based on given metrics that help to indicate whether what you’re doing is working or not.

Here’s a scenario for clarity.

You’re a brand manager for General Motors and you’ve been given the task of creating a microsite that promotes a new vehicle. The site has a series of pages and a whole slew of engaging pieces of content. As far as your CMO is concerned – you need to demonstrate in some way shape or form how this has helped drive vehicle sales. He wants to see the KPIs you plan to use for your monthly performance reports.

There could be literally thousands of metrics you can use – but your CMO is a smart person. If you present them with all of the data – they’ll wonder why they need you at all when they can just pull the same data themselves. They want the data synthesized into just a few key points (get it? Key? HA!).

The trick is to think about how your visitors need to flow through your site through to your business objective. In this case – let’s assume it’s finding a dealership.

KPIs are simply the metrics that indicate whether a visitor made it from one step in that sequence to another. The hard part is choosing the right ones within that sequence.

In this case it might be:

– Visits to site (Acquisition)

– Clicks on “Find a Dealer” (Intent)

Literally everything else on the site serves as evidence to help understand how visitors use the site, but those two KPIs are ultimately the “In” and “Out” of the marketing platform.

Hello Fail

Back in 2007 I started this blog.

You would’t know that by coming here today for the first time… Because somehow all my previous posts got deleted, and my hosting company can’t find any back-ups of the database.
I won’t mention them, but let’s just say their name rhymes with Shmedia Memple. So yeah. Thanks guys. 
I had a few useful posts that got some traffic. Mostly career advice for aspiring digital strategists.
I’ll do my best to remember what I wrote and put it back up.

Google Wallet – The future is looking far more data rich

Last week Google announced the launch of Google Wallet – a new service that will allow you to pay for things using your phone instead of a physical credit or debit card.

This is big news all on its own, but to digital marketers this has huge implications.

Here’s the break down

Current State of the Nation

Today, despite the idea that we’re overwhelmed with technology at our fingertips, our world is still predominantly based on traditional touch-points that “aid” us in our purchase decisions. Take for example grocery shopping. For the most part people still go grocery shopping the same way they did fifty years ago.

  1. Week is nearly over and you prep an inventory of things you’re running out of / need for your meals for the next week
  2. Inventory of things becomes a written grocery list
  3. Drive / Bike / Helicopter to grocery store
  4. Find all items and maybe the odd surprise here and there
  5. Check out through a cashier

Barring obvious examples like Grocery Gateway and self-check-out (which isn’t working as well as I would have thought) you’d think that the overall experience of retail purchases would be leveraging mobile technology more. Instead of leveraging mobile and other “in-store” technologies, they use mobile the same way as most other industries do – “Mobile Friendly Websites”. Something that isn’t all that helpful if you’re already in the store.

Potential Future

So imagine if the above five steps looked a little bit more like this:

  1. Week is nearly over and your smart fridge tells your to-do list (stored somewhere on a server in a land far away) that you’re running low on milk, chicken and double smoked cheddar
  2. Your phone has remote access to a grocery list and while looking at it, you’re invited to add “recipes” you’d like to try – which add more items to your grocery list based on available inventory at your preferred grocery store
  3. Drive / Bike / Helicopter to grocery store
  4. Your phone shows your most optimal path through the grocery store and allows you to scan the items in as you gather them to check them off the list (scanning also provides rich detail about the item in particular – eg. Where the chicken is from and how fresh it is)
  5. Your item scanning has racked up an actual bill which you can pay for through your phone instead of checking out and as you walk out of the store your phone verifies tells the security bars not to trigger the alarms and that you have indeed paid for all the items in your basket

All of this is easily doable today… with the exception of paying $3,500 for a smart fridge. The rest can be handled with basic web applications, basic mobile apps, secure eCommerce platforms and NFC stickers on all products (which are no different from the RFID stickers available on most products we buy today).

With all of these activities going on we would have access to this particular customer’s:

  • Fridge Contents
  • Preferred Eating Habits
  • Heat Map of their walking path through the store (did that Promotional sign make them stop? Did they sample the Smoked Gouda?)
  • Spending habits on a week to week basis

And with said data we could:

  • Let the customer know about specific sales as they relate to products you want them to try out (vs. what they’ve already been eating)
  • Grow their basket size on their next visit by leveraging their eating habits to give them new recipe ideas
  • Reorganize the store to leverage existing travel patterns through the store (this happens already but without the same integrity of data)
  • Optimize messaging to the customer based on their spending habits (are they looking for recipe ideas? Or do they just want to save money on their weekly trip)

While we could have done all these things before – we were all bending over backwards trying to figure out what the perceived benefit to the customer would be. We throw deals at them, incentivized opt-ins to loyalty programs through “free points” and lots of other stuff with little to no long term pay-off for the customer. With the advent of innovations like Google Wallet – Customers will be looking for those streamlined experiences that not only let them check out faster, but also let them make their decisions faster and smarter while saving them money in the process.

Dave Gray on Game Usage in the Workplace

Dave Gray presented some core concepts surrounding a book he’ll be publishing soon. Check out the video I took of the presentation. Unfortunately it cuts out after 45 minutes or so at which point Dave gets into the concept of co-evolution in a knowledge working environment and then actual usage of gaming in facilitation/ideation environments.

The image to the left is courtesy of Aaron Williamson over at Shift and Share. His take on the session at – http://shiftandshare.com/?p=115

I’ve put this video up really quickly so that people who couldn’t attend could get a glimpse of what they missed so I’ve skimped on a lot of the context. If anybody wants me to delve into it, just ask for it in the comments section. My apologies for the amount of buffering you’ll have to do.

© 2015 Jon Litwack

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