10 Best Practices for Defining Key Performance Indicators

[avatar user=”admin” size=”thumbnail” align=”left” link=”https://www.linkedin.com/in/paullima/” target=”_blank”]Paul Lima [/avatar]

 

1. Start with the customer and use a methodology that mirrors your customer journey

Source: Customer Engament Funnel – Lima Consulting Group

Since just about everyone has had both positive and negative digital experiences, consumers know enough to know when a digital experience doesn’t meet their expectations.  I’ve had customers try and justify that, since they are in a business that might not be an e-commerce business, the notion of digital transformation doesn’t apply and customers will give them “a pass.” Not true!

When engaging with brands through digital channels, every industry is in play.  Begin with the customer in mind and map their customer journey as it relates to your funnel to Acquire > Convert > Engage > Retain and Recover.  Each of these areas has a series of digital metrics, a few of which will become Key Performance Indicators.

This model should become your digital analytics design.  We call it a Solutions Design Reference and we have templates that we can share to help you accelerate your deployment of Adobe Analytics, Google Analytics, AT Internet, or any of the other major digital analytics tools. 

2. Use personas 

Source: Customer Engagement Funnel – Lima Consulting Group

Marketing Personas are representative segments of meaningful differences that require a different
marketing message and offering.  Use templates from HubSpot or Smart Insights to develop those if you haven’t already.  It’s a fun process.

For example, our principle persona is “Valerie Trooper,” a Digital Marketing Director at a firm on the Russell 2000 Index who serves as a digital marketing visionary within her organization.  We’ve mapped out the marketing messages she needs to hear, her pain points, and the offerings that can meet her needs.

These customer segments will undergo their buyer and customer journeys with very different beliefs, actions and needs.  Use the “think, feel, do” model to meet them at each touchpoint or download the SmartInsights guide here.

3. Define the Key Business Objectives for the overall business and then for each stakeholder group

Starting with the owner of the Profit and Loss statement, it’s important to gain consensus on the organization’s business objectives.  From there you can harness the power of digital.  Think about the digital objectives with that end-point in mind.

From there consider what each stakeholder group may need.  Marketing, Sales and Operational teams need to acquire, convert and retain customers.  Don’t forget about HR, they need to recruit and believe it or not, the legal team may need to keep an eye on the cookie policies, and IT may partner with them to evaluate fraud and intrusion detection.  It’s a team sport!

4. Distinguish between Key Performance Indicators and metrics

Marketers are drowning in data.  Distinguish between what activities drive the business and what supports them.  As a general rule of thumb, each stakeholder should not have more than 7 KPIs.  Of those 7, 3 should be common to the organization and up to 4 should be directly tied to their department/objective.

 5. Create dashboards for each stakeholder group

Inspect what you expect, expect where you inspect.  Meet frequently to review reporting, conduct analysis, and optimize performance.

In the age of “everything digital” some things are still good to put down on paper.  At LCG, we prepare laminated cards for our customers.  Each stakeholder group receives a card that has their KPI definitions, and the specific report names and frequency that they will receive them electronically.  For the initiated, it has the breadcrumbs on how to bring up the report in their analytics tool, and there’s even a place to write down your userid.  Of course, we would never recommend writing the password on the card.

That kind of takes away the excuse of “I don’t know how to access our data and reports.”

6. Know what normal is and what do outside the “Band of Excellence”

That’s not so easy.  You need to break down the cycles of your business each day into what is normal.  For example, one of our customers is a media firm.  They used the following blocks of time (all times in Eastern) 0600-1000, 1000 – 1400, 1400 – 1800, and then from 1800 – 1200, and then from 1200 – 0600 (using Eastern time zones).  This was a large national US media firm, and these time zones worked well for national averages for each segment (the 0600 – 1000 block worked well for their early morning readership across the 4 time zones in the US who were consuming news during their morning coffee).  A smaller business may look at weekly or even monthly figures to see how their content is performing.

When a content asset under or over-indexed against the norm, your team should have a series of processes that kick off based on an alert.  Use the concept of content velocity and participation to measure content asset performance.  Define some actions that your team can do when content performs well.  If you have a “hot topic” that is a longer piece of content, you may initiate a process to break it into mid-form and short-form content for social.  It could go into re-targeting for engaging users, or you could plus a display up or search campaign to meet your objectives.  The important thing is to have a short list of actions that your team can do prior to the alert trigger.

The Band of Excellence
Source: US Army Field Manual FM 7-0 Training the Force

When I was an officer in the military, our guidance was to rise to a level of excellence and try to maintain the skills within the Band of Excellence with our collective unit training.  This concept also applies to content and it’s important to just begin measuring and understand “what is normal” for your organization during each time interval.

7. Use data visualization tools to connect cross-channel experiences

Since the customer journey extends beyond the website and mobile experience, you’ll want to see engagement metrics across channels.

  • Are your keywords resulting in the desired prompts on the IVR (Press 1 for sales)?  To find out, export IVR data into your analytics solutions.
  • Are your Marketing Qualified Leads (MQLs) converting to Sales Qualified Leads (SQLs)?  To find out, bring exports of CRM data for qualified leads into analytics.
  • Which keywords are resulting in your most profitable sales?   To find out, bring your ERP data into your analytics.  Or use a data visualization tool like Tableau, Microsoft Power BI, or Domo to gain the data visualizations you need at the speed of thought.

Screen Shot 2017-02-27 at 10.51.10 AMConsider using a call tracking software such as DialogTech to connect online activity to your phone calls.  From there, you’ll be able to identify how effective your digital experiences are connecting to your offline sales process.

Here’s an example of how to connect your programmatic ad buying platform to your web analytics platform using a call tracking solution.  From there, add in a data visualization tool like Microsoft Power BI and you’re set to see a hug improvement in your cost to acquire customers. 

Inbound Phone Inquiry Accelerator

8. Trust your data by using a tag auditing solution

Data-driven management practices imply that the data can be trusted.  But in our experience most organizations aren’t auditing this valuable resource and are making decisions based on seriously flawed data.  There’s no reason for this given that the cost to audit tags is so low.  Use a tool like ObservePoint to identify which pages have missing or duplicate tags.  There’s a lot more to these tools, but the idea is to ensure that your digital tagging implementation is trustworthy.

Beyond a tag auditing solution, make sure you budget for digital analytics maintenance.  Implementations are never fire and forget.

Here’s an example of our Tag Deployment Assessment, which we can run for you as a complimentary offering.  Just give us a call or drop us an email and we’ll be happy to work one of these up for you.

Tag Deployment Assessment

9. Use a tag management system

In our research of over 3,000 websites and 3+ million pages, we have found a direct correlation between organizations that use a paid/enterprise grade Tag Management System and their tag audit scores.  We define paid TMS solutions as Tealium, Ensighten, and the Adobe Activate (formerly called Dynamic Tag Manager or DTM).  We conduct on-going assessments on various industries throughout the year, but the results below are specific to the Financial Services Industry.  The red dots are organizations that have no TMS, and they are generally clustered in the bottom left quadrant.  As organizations begin to experiment with a TMS, fully deploy a free or paid TMS, they move up and to the right quadrant.

Source: Tag Management System audit results – Lima Consulting Group

10. Assign data governance responsibility

While we cannot attribute causality of maturity to the use of the enterprise TMS (the point above), we do see that organizations that are making the investment in paid solutions are indeed more mature.  Is that because the TMS helped them?  Or did they commit to the TMS as part of a larger effort?  We can see beyond the technology and tell you that in our experience, having worked on over 400 web analytics implementations, they generally have the following best practices:

  • dedicated towards becoming data-
  • they are sending their digital analytics professionals to training
  • partnering with analytics firms
  • have placed “ownership” of digital data to a C level role and/or team
  • have assigned responsibility for data governance

Leave a Comment

Your email address will not be published.