Deciding how to measure success
It’s not all about revenue
Whilst obviously the ultimate goal for your business is to make money, when it comes to success metrics, it’s important to avoid solely focusing on revenue and conversions. There are other important factors that should be recognised and celebrated – including the quality of customers, traffic coming from target locations and click-throughs on email campaigns. Even when you’re drilling down into conversions, you should take into account both micro and macro conversions. Macro conversions are the ultimate goal you’re aiming for (ie. a sale) but micro conversions are user behaviours that tend to indicate a sale down the line – like putting an item in a basket.
New vs returning customers
Your success metrics will also change dramatically based on whether your main business aim is to attract new customers or retain and develop existing customers. Obviously, ideally, you want to do both! But it’s important to segment your KPIs between the two. For new customers, you may want to be keeping an eye on the increase in traffic and return on ad spend. Whilst these metrics are still important for existing customers, if this is your focus, you will think more about how many are returning after initial purchase, customer lifetime value and average spend.
Think about the funnel
At different stages of the sales funnel, customers have different intent – and there are different reactions we are aiming to garner from them. Therefore it makes sense that the way you measure success will be different at each stage. For customers at the discovery stage, it’s all about looking at impressions – how many eyeballs have been on your marketing campaign. Whereas as you make your way down to the consideration stage you’ll be thinking about inbound traffic, before finally ending up at conversion and retention stages, which require a whole other set of metrics. Your customers are on a journey – and that means your KPIs should be going (and adapting) along with them.
Look out for conflicts
You may be setting different teams different goals that could actually be counterproductive. For example, if one side of your business is being rewarded for the volume of traffic to your site, they will be purely focused on numbers. A team that is trying to convert specific types of leads (maybe from a specific locale or demographic) will be more selective about who they want visiting your site. If these teams are not collaborating and sharing information properly, the increase in traffic may be a waste of time, especially if the increased visitors are all the completely wrong type of customer.
Transparency of data
If you’re setting your team KPIs, it’s only fair that they have access to the data that will let them see how close they are to achieving their goals. You need to be sure that you’re not only collecting the relevant information but also reporting in a way that gives your team accuracy and clarity. If progress is not being made in the way you had hoped, you may have to have difficult conversations, and everyone having eyes on the data will help back you up. Making sure that the tools used to curate the data are accessible across all teams will ensure everyone is on the same page and gives a level of responsibility and autonomy to your team members.