This introduces KPIs that can be used in Analytics and distinguishes between what is called “actionable” and “vanity” metrics. This will enable the member to select appropriate KPIs for measuring.
- [Instructor] A key performance indicator or KPI is a measurable value that tells our organization how effective we are at achieving business objectives. Every organization would like to know just how successful we are at reaching different targets. When business activities happen via a website or app analytics can be used to measure and track various KPIs. Of course, there are still certain offline KPIs that we cannot measure with analytics. The main purpose of using KPIs is to help us make better decisions, and to drive specific actions within the organization.
Using KPIs and analytics really removes the guesswork and helps us to make data-driven decisions. When using analytics there are literally hundreds of different metrics that can be accessed. So how do we choose which metrics to monitor? Understanding the difference between vanity metrics and actionable metrics is really useful. Vanity metrics makes the reader feel good about what they see, but they provide no indication of how the business can be improved or what actions can be taken differently.
Actionable metrics on the other hand represent valuable data which can be acted upon, usually to improve or rectify something in the business. When we know business or websites really well it becomes easy to identify useful metrics for the business type. Let me share with you some examples of both these metrics. We will use the example of an e-commerce website that sells electronics in the US. Now let's imagine this website makes use of downloadable how-to guides as a means of content marketing.
So what would be an example of vanity metrics? Let's start with something like global visitors. Even if we see a 400% increase in downloads of our how-to guide in countries that doesn't actually buy from us, the fact that it did not improve our sales in the US means that for this particular business it's actually a vanity metric. Or let's consider changes in device type. Even if we know that we have a 200% increase in mobile users viewing the website in other countries, this didn't lead to more sales where we operate.
Now let's look at some actionable metrics instead. Let's start with car transactions. This is the ultimate KPI that we're tracking, and we'd like to investigate every other metric that can have an impact on our car transactions. Or let's look at referral traffic that converts. Simply knowing that our referral traffic is increasing is not enough. We want to see which traffic types convert best and then make decisions on how to increase that traffic type.
We can also look at keywords that convert. This is a great actionable metric because knowing which keywords people search for that led to a car transaction enables us to create more content around that topic to attract more visitors. Soon you're going to see that even users with a very basic knowledge of analytics have ways in which to monitor these KPIs eaisly. I will also share with you how KPIs can be measured at a more advanced level.
Now here is something for you to think about. What are the KPIs that will enable you to take action in your organization?
Learn how to step up your marketing analytics game with this course on setting and measuring KPIs from marketing expert Adriaan Brits. He shows how to import existing dashboards and create brand-new ones to measure your KPIs and keep track of relevant data. Learn how to enhance dashboards with goals and event tracking, review historic or recent trends, and find more data you need. Then get tips and tricks for reading Google Analytics reports and measuring specific KPIs related to content marketing, brand awareness, or even customer loyalty.