Chances are you have arrived at this blog article because you are thinking about how to measure success when it comes to your latest business endeavor, and that’s how we’re here to help. So often during my experience in the online business and eCommerce realm, I have seen businesses take on large projects with big budgets and resource allocation.. ‘the next big thing.’ And then ‘the next big thing’ launches into production and everyone, including stakeholders, is eager to understand how it is performing. The problem is, success, along with the metrics used to measure success, were never defined upfront. The end result is often a report or dashboard that doesn’t provide business owners with any details around whether the project is performing well or failing to meet expectations.
A successful project requires a solid measurement strategy – this strategy needs to be arrived at prior to production launch. The reason for this is because the measurement strategy influences tracking and measurement functions which may need to be created within the digital analytics tagging platform (for example, Google Tag Manager (GTM) for Google Analytics, or Adobe Launch for Adobe Analytics). Having the strategy in place, and the required tracking mechanisms in place upfront ensures not only is data being collected from day one, but the right data is being collected. This data can then be used to understand performance, as well as provide direction for site optimization initiatives.
So, what are the components of a good measurement strategy? It starts with defining objectives, targets (key results), and required metrics (performance indicators). Below we go into these items in more detail:
Objective and Key Results (OKRs) & Key Performance Indicators (KPIs)
Objectives are driven by business goals, mission, and values – think of objectives as the reason the company exists; or why new endeavors are undertaken (such as new marketing campaigns, updated site functionality, or enhanced content and personalization initiatives). It is the declaration of, “We are starting this initiative because we want this outcome.”
Key Results help define success criteria at the forefront of the project and provide direction. Key results are a measurable outcome target used to assess the performance of an objective. In an ideal world, business decisions and directions would be prioritized based on projected key results. Key results state, “Here are the milestones to reach our objective.”
Key Performance Indicators (KPIs) are the quantitative measurements of business performance. KPIs are not the collection of every measurable data point under the sun – rather, they should be hyper focused on measuring indicators which provide the most lift and value to the company. In other words, key performance indicators are the mechanisms used to measure progress toward your key results. Think of this as the delta comparison of business actuals versus plan/key results.
Now let’s consider the following scenario and determine what the measurement strategy would look like. Imagine we are onboarding a No Code Preference Center in order to understand customer preferences to enrich marketing and personalization user content while also decreasing email opt-out rates. The key here is the objectives do not need to be over-complicated; rather, they need to be to the point, and measurable.
Objective – With the launch of the new No Code Preference Center (NCPC) – we plan to decrease the current opt-out rate of users that visit the email unsubscribe page.
Now that we have a defined objective, we need to determine how we will gauge success – in other words, what milestone do we want to achieve? This is the target, or more directly, the key result we are hoping to achieve.
Key Result – The current email opt-out rate is 28.5%, and we aim to decrease this rate by 5%+ within the first 3 months post-NCPC launch.
With the objective and key result targets defined; we would now need to identify which metrics will allow us to measure for success.
Key Performance Indicator – Measure the percent of NCPC sessions that elect to unsubscribe from promotional emails (sessions with an unsubscribe event/total sessions). Comparing the pre-launch rate to the 3-month post launch rate to determine deltas.
It is important to mention that there could be more than 1 objective within each initiative. Keeping with the NCPC example, we may also want to include a downstream objective related to marketing. Here we set an objective related to how insights will be utilized to enhance marketing endeavors:
- Objective – Improve understanding of customer preferences to empower better marketing and personalization endeavors, which will lead to better remarketing interactions.
- Key Result – Current remarketing click-thru rate is 13.8%, the target is to increase the remarketing interaction rate to 14.5% within 3 months.
- Key Performance Indicator – Percent of NCPC remarketing targeted users which clicked through to visit the site.
At the end of the day, it is imperative to include digital analytics upfront on all projects, ensuring measurement strategies are defined and success is attainable. By doing this we ensure a way to determine if we are able to attain the desired results benefiting stakeholders and business owners.