Registration is now open for ACCELERATE 2014 in Atlanta, Georgia on September 18th. Reserve your spot today at Eventbrite — tickets are only $99 USD!



The “K” in “KPI” is not for “1,000″

Published by Tim Wilson on July 31, 2013 All posts from Tim Wilson

At the core of any effective performance measurement process are key performance indicators, or KPIs.

Did you catch the redundancy in that statement? Performance measurement uses performance indicators. What gets my goat — because it drives report bloat and the scheduled production of an unnecessary sea of data — is how often the “K” in KPI gets ignored. More times than I can count, I’ve been sent a “list of KPIs,” that, rather than being a set of 3-5 measures with targets established, is a barfed out list of metrics and data:

Barfing Metrics

I had a self-humoring epiphany last week that, perhaps, marketers get confused by the acronym and think that “K” stands for “1,000″ rather than for “key!” Through that lens, perhaps they’re falling short — lists of 20 or 30 KPIs are still well short of 1,000! My favorite response to my idle ephiphany (shared on Twitter, of course, because that’s what Twitter is for, right?) was from Eric Matisoff:

kkpi_matisoff

Not only did I realize that I’d seen the phrase “key KPIs” used myself…I saw this phrase in writing two days later!

NO, people! No. No. NO!!!

This bothers me (obviously!) — not just when it happens, but the fact that it happens so. So, why does it happen, and what can we do about it?

The History of Digital Analytics Does Not Help

As an industry, we are stuck with a pretty persistent albatross of history. When I started in web analytics, the data we had access to was generated once a month when our web analytics platform (Netgenesis) crunched through the server log files and published several hundred reports as static HTML pages. The analysts needed to know what those reports were so that they could quickly find the ones that would be most useful in answering the business questions at hand. When no such report was in the monthly list of published reports, we would either dive into a cumbersome (hours to run a simple query) ad hoc analysis tool, configure a new report to be added to the monthly list, or both.

We might look at the new report once or twice over the next few months…but the report never went away.

It got to the point where it took the first 10 days of each month for the ever-growing list of monthly reports to be published by the tool. In many cases, data from those reports was getting pulled into other reports with data from other sources. We got to that dreaded point where the report for any given month was often not published until 3 weeks into the following month. Egad!

But, in some ways, it was our only option. We didn’t have quick and efficient access to ad hoc queries of the data that we now have on many front. So, the reports were, really, mini data marts. High latency, expensive, and low value mini data marts, but mini data marts nonetheless. Somehow, though, we often still seem to be stuck with that mindset: a recurring report is the one shot we have to pull all the data we might want to look at. That’s silly. And inefficient. Our monthly (or on-demand) performance measurement reports need to be short (one screen), clear (organized around business goals), and readily intepreted (“at a glance” read of whether goals are being met or not).

KPIs Are Actually Quite Simple (if not Easy) to Identify

KPIs are the core of performance measurement. They’re not there for analysis (although they may be the jumping off point that triggers analysis). They’re not the only data that anyone can ever look at. They’re not even the only data that will go on a dashboard (but they will get much more prominent treatment than other metrics on the dashboard). I use the “two magic questions” to identify KPIs:

  1. What are we trying to achieve?
  2. How will we know if we’re doing that?

The answer to the second question is our list of KPIs, but we have to clearly and concisely articulate what we’re trying to achieve first! And that question gets skipped as often as Lindsey Lohan dons an ankle monitor.

I like to think of the answer to the first question as the conversation I would have with a company executive when we find ourselves riding on an elevator and making idle chit chat. She asks, “What are you working on these days?” I (the marketer) respond:

  • “Rolling out our presence on Twitter.”
  • “Creating a new microsite for our latest campaign.”
  • “Redesigning the home page of the site.”
  • “Expanding our paid media investment to Facebook.”)

She then asks, “What’s that going to do for us?” (This is the first of the two magic questions.) I’m not going to start spouting metrics. I’m going to answer the question succinctly in a way that expresses the value to the business:

  • “With Twitter, we’re working to put our brand and our brand’s personality in the minds of more consumers by engaging with them in a positive, timely, and meaningful way.”
  • “We will be giving consumers who find out about our new product through any channel a place to go to get more detailed information so that they can purchase with confidence.”
  • “We will make visitors to our home page more aware of the services we offer, rather than just the products we sell.”
  • “We will introduce potential customers to our brand efficiently by targeting consumers who have a profile and interests that make them likely targets for our products.”

As marketers, we actually tend to suck at having a ready and repeatable answer to that  question. If we have that, then we’re 75% of the way to identifying a short list of meaningful KPIs, because the KPIs are then viewable through the lens of whether they are actually metrics appropriate for measuring what we’re trying to achieve.

A KPI Without a Target Is Not a KPI

“Visits is one of our KPIs, and we had 225,000 visits to the site last month.”

Is that good? Bad? Who knows? In the absence of an explicitly articulated target, we simply look at how the KPI changed from the prior month and, perhaps, how it compared to the same month in the prior year. That’s fine…if the target established for the KPI was based on one of these historical baselines. All too often, though, there is no agreement and alignment around what the target is.

If we accept that KPIs have to explicitly have targets set (and those targets aren’t necessarily fixed numbers — they can be based on some expected growth percentage or compare), then the list of KPIs automatically gets shorter. Setting targets takes thought and effort, so it’s not practical to set targets for 25 different metrics. If we hone in on 3-5 KPIs, then we can gnash our teeth about the lack of historical baselines or industry benchmarks to use in setting targets…and then set targets anyway! We will roll up our sleeves, get creative, realize that there is a SWAG aspect of setting the target…and then set a target that we will use as an appropriate frame of reference going forward. It’s not an impossible exercise, nor is it one that takes an undue amount of time.

Did I Mention that “K” is for “Key?”

Perhaps it is a quixotic quest, but I’ll take any company I can get in this battle for sanity. Let’s get the “key” back in KPIs! If you’re up for saddling up and tilting at this particular windmill, feel free to snag a copy of my performance measurement planning template as one of your armaments!

donquixotic

Categorized under Metrics

 


Recent Blog Posts

Top 5 Metrics You’re Measuring Incorrectly ... or Not
Eric T. Peterson, Senior Partner

Last night as I was casually perusing the days digital analytics news — yes, yes I really do that — I came across a headline and article that got my attention. While the article’s title ("Top 5 Metrics You’re Measuring Incorrectly") is the sort I am used to seeing in our Buzzfeed-ified world of pithy “made you click” headlines, it was the article’s author that got my attention.

Continue reading this article ... ... more from Eric T. Peterson

Bulletproof Business Requirements
John Lovett, Senior Partner

As a digital analytics professional, you’ve probably been tasked with collecting business requirements for measuring a new website/app/feature/etc. This seems like a task that’s easy enough, but all too often people get wrapped around the axle and fail to capture what’s truly important from a business users’ perspective. The result is typically a great deal of wasted time, frustrated business users, and a deep-seated distrust for analytics data.

Continue reading this article ... ... more from John Lovett

Welcome to Team Demystified: Nancy Koons and Elizabeth Eckels!
Eric T. Peterson, Senior Partner

I am delighted to announce that our Team Demystified business unit is continuing to expand with the addition of Nancy Koons and Elizabeth “Smalls” Eckels. Our Team Demystified efforts are exceeding all expectation and are allowing Web Analytics Demystified to provide truly world-class services to our Enterprise-class clients at an entirely new scale.

Continue reading this article ... ... more from Eric T. Peterson

When to Use Variables vs SAINT in Adobe Analytics
Adam Greco, Senior Partner

In one of my recent Adobe SiteCatalyst (Analytics) "Top Gun" training classes, a student asked me the following question: When should you use a variable (i.e. eVar or sProp) vs. using SAINT Classifications? This is an interesting question that comes up often, so I thought I would share my thoughts on this and my rules of thumb on the topic.

Continue reading this article ... ... more from Adam Greco

5 Tips for #ACCELERATE Exceptionalism
Tim Wilson, Partner

Next month’s ACCELERATE conference in Atlanta on September 18th will be the fifth — FIFTH!!! — one. I wish I could say I’d attended every one, but, sadly, I missed Boston due to a recent job change at the time. I was there in San Francisco in 2010, I made a day trip to Chicago in 2011, and I personally scheduled fantastic weather for Columbus in 2013.

Continue reading this article ... ... more from Tim Wilson

I’ve Become Aware that Awareness Is a #measure Bugaboo
Tim Wilson, Partner

A Big Question that social and digital media marketers grapple with constantly, whether they realize it or not: Is "awareness" a valid objective for marketing activity?

I’ve gotten into more than a few heated debates that, at their core, center around this question. Some of those debates have been with myself (those are the ones where I most need a skilled moderator!).

Continue reading this article ... ... more from Tim Wilson

Advanced Conversion Syntax Merchandising
Adam Greco, Senior Partner

As I have mentioned in the past, one of the Adobe SiteCatalyst (Analytics) topics I loathe talking about is Product Merchandising. Product Merchandising is complicated and often leaves people scratching their heads in my "Top Gun" training classes. However, many people have mentioned to me that my previous post on Product Merchandising eVars helped them a lot so I am going to continue sharing information on this topic.

Continue reading this article ... ... more from Adam Greco

Team Demystified Update from Wendy Greco
Eric T. Peterson, Senior Partner

When Eric Peterson asked me to lead Team Demystified a year ago, I couldn’t say no! Having seen how hard all of the Web Analytics Demystified partners work and that they are still not able to keep up with the demand of clients for their services, it made sense for Web Analytics Demystified to find another way to scale their services. Since the Demystified team knows all of the best people in our industry and has tons of great clients, it is not surprising that our new Team Demystified venture has taken off as quickly as it has.

Continue reading this article ... ... more from Eric T. Peterson

SiteCatalyst Unannounced Features
Adam Greco, Senior Partner

Lately, Adobe has been sneaking in some cool new features into the SiteCatalyst product and doing it without much fanfare. While I am sure these are buried somewhere in release notes, I thought I’d call out two of them that I really like, so you know that they are there.

Continue reading this article ... ... more from Adam Greco

Hello. I’m a Radical Analytics Pragmatist
Tim Wilson, Partner

I was reading a post last week by one of the Big Names in web analytics…and it royally pissed me off. I started to comment and then thought, “Why pick a fight?” We’ve had more than enough of those for our little industry over the past few years. So I let it go.

Except I didn’t let it go.

Continue reading this article ... ... more from Tim Wilson

Competitor Pricing Analysis
Adam Greco, Senior Partner

One of my newest clients is in a highly competitive business in which they sell similar products as other retailers. These days, many online retailers have a hunch that they are being “Amazon-ed,” which they define as visitors finding products on their website and then going to see if they can get it cheaper/faster on Amazon.com. This client was attempting to use time spent on page as a way to tell if/when visitors were leaving their site to go price shopping.

Continue reading this article ... ... more from Adam Greco

How to Deliver Better Recommendations: Forecast the Impact!
Michele Kiss, Partner

One of the most valuable ways to be sure your recommendations are heard is to forecast the impact of your proposal. Consider what is more likely to be heard: "I think we should do X ..." vs "I think we should do X, and with a 2% increase in conversion, that would drive a $1MM increase in revenue ..."

Continue reading this article ... ... more from Michele Kiss

ACCELERATE 2014 “Advanced Analytics Education” Classes Posted
Eric T. Peterson, Senior Partner

I am delighted to share the news that our 2014 “Advanced Analytics Education” classes have been posted and are available for registration. We expanded our offering this year and will be offering four concurrent analytics and optimization training sessions from all of the Web Analytics Demystified Partners and Senior Partners on September 16th and 17th at the Cobb Galaria in Atlanta, Georgia.

Continue reading this article ... ... more from Eric T. Peterson

Product Cart Addition Sequence
Adam Greco, Senior Partner

In working with a client recently, an interesting question arose around cart additions. This client wanted to know the order in which visitors were adding products to the shopping cart. Which products tended to be added first, second third, etc.? They also wanted to know which products were added after a specific product was added to the cart (i.e. if a visitor adds product A, what is the next product they tend to add?). Finally, they wondered which cart add product combinations most often lead to orders.

Continue reading this article ... ... more from Adam Greco

7 Tips For Delivering Better Analytics Recommendations
Michele Kiss, Partner

As an analyst, your value is not just in the data you deliver, but in the insight and recommendations you can provide. But what is an analyst to do when those recommendations seem to fall on deaf ears?

Continue reading this article ... ... more from Michele Kiss

Overcoming The Analyst Curse: DON’T Show Your Math!
Michele Kiss, Partner

If I could give one piece of advice to an aspiring analyst, it would be this: Stop showing your "math". A tendency towards "TMI deliverables" is common, especially in newer analysts. However, while analysts typically do this in an attempt to demonstrate credibility ("See? I used all the right data and methods!") they do so at the expense of actually being heard.

Continue reading this article ... ... more from Michele Kiss

Making Tables of Numbers Comprehensible
Tim Wilson, Partner

I'm always amazed (read: dismayed) when I see the results of an analysis presented with a key set of the results delivered as a raw table of numbers. It is impossible to instantly comprehend a data table that has more than 3 or 4 rows and 3 or 4 columns. And, "instant comprehension" should be the goal of any presentation of information — it's the hook that gets your audience's brain wrapped around the material and ready to ponder it more deeply.

Continue reading this article ... ... more from Tim Wilson

Automating the Cleanup of Facebook Insights Exports
Tim Wilson, Partner

This post (the download, really — it’s not much of a post) is about dealing with exports from Facebook Insights. If that's not something you do, skip it. Go back to Facebook and watch some cat videos. If you are in a situation where you get data about your Facebook page by exporting .csv or .xls files from the Facebook Insights web interface, then you probably sometimes think you need a 52" monitor to manage the horizontal scrolling.

Continue reading this article ... ... more from Tim Wilson

The Recent Forrester Wave on Web Analytics ... is Wrong
Eric T. Peterson, Senior Partner

Having worked as an industry analyst back in the day I still find myself interested in what the analyst community has to say about web analytics, especially when it comes to vendor evaluation. The evaluations are interesting because of the sheer amount of work that goes into them in an attempt to distill entire companies down into simple infographics, tables, and single paragraph summaries.

Continue reading this article ... ... more from Eric T. Peterson

Funnel Visualizations That Make Sense
Tim Wilson, Partner

Funnels, as a concept, make some sense (although someone once made a good argument that they make no sense, since, when the concept is applied by marketers, the funnel is really more a "very, very leaky funnel," which would be a worthless funnel — real-world funnels get all of a liquid from a wide opening through a smaller spout; but, let’s not quibble).

Continue reading this article ... ... more from Tim Wilson

Reenergizing Your Web Analytics Program & Implementation
Adam Greco, Senior Partner

Those of you who have read my blog posts (and book) over the years, know that I have lots of opinions when it comes to web analytics, web analytics implementations and especially those using Adobe Analytics. Whenever possible, I try to impart lessons I have learned during my web analytics career so you can improve things at your organization.

Continue reading this article ... ... more from Adam Greco

Registration for ACCELERATE 2014 is now open
Eric T. Peterson, Senior Partner

I am excited to announce that registration for ACCELERATE 2014 on September 18th in Atlanta, Georgia is now open. You can learn more about the event and our unique "Ten Tips in Twenty Minutes" format on our ACCELERATE mini-site, and we plan to have registration open for our Advanced Analytics Education pre-ACCELERATE training sessions in the coming weeks.

Continue reading this article ... ... more from Eric T. Peterson

Current Order Value
Adam Greco, Senior Partner

I recently had a client pose an interesting question related to their shopping cart. They wanted to know the distribution of money its visitors were bringing with them to each step of the shopping cart funnel.

Continue reading this article ... ... more from Adam Greco

A Guide to Segment Sharing in Adobe Analytics
Tim Wilson, Partner

Over the past year, I've run into situations multiple times where I wanted an Adobe Analytics segment to be available in multiple Adobe Analytics platforms. It turns out…that's not as easy as it sounds. I actually went multiple rounds with Client Care once trying to get it figured out. And, I’ve found "the answer" on more than one occasion, only to later realize that that answer was a bit misguided.

Continue reading this article ... ... more from Tim Wilson

Currencies & Exchange Rates
Adam Greco, Senior Partner

If your web analytics work covers websites or apps that span different countries, there are some important aspects of Adobe SiteCatalyst (Analytics) that you must know. In this post, I will share some of the things I have learned over the years related to currencies and exchange rates in SiteCatalyst.

Continue reading this article ... ... more from Adam Greco

Linking Authenticated Visitors Across Devices
Adam Greco, Senior Partner

In the last few years, people have become accustomed to using multiple digital devices simultaneously. While watching the recent winter Olympics, consumers might be on the Olympics website, while also using native mobile or tablet apps. As a result, some of my clients have asked me whether it is possible to link visits and paths across these devices so they can see cross-device paths and other behaviors.

Continue reading this article ... ... more from Adam Greco

The 80/20 Rule for Analytics Teams
Eric T. Peterson, Senior Partner

I had the pleasure last week of visiting with one of Web Analytics Demystified’s longest-standing and, at least from a digital analytical perspective, most successful clients. The team has grown tremendously over the years in terms of size and, more importantly, stature within the broader multi-channel business and has become one of the most productive and mature digital analytics groups that I personally am aware of across the industry.

Continue reading this article ... ... more from Eric T. Peterson

Ten Things You Should ALWAYS Do (or Not Do) in Excel
Tim Wilson, Partner

Last week I was surprised by the Twitter conversation a fairly innocuous vent-via-Twitter tweet started, with several people noting that they had no idea you could simple turn off the gridlines.

Continue reading this article ... ... more from Tim Wilson

Omni Man (and Team Demystified) Needs You!
Adam Greco, Senior Partner

As someone in the web analytics field, you probably hear how lucky you are due to the fact that there are always web analytics jobs available. When the rest of the country is looking for work and you get daily calls from recruiters, it isn’t a bad position to be in! At Web Analytics Demystified, we have more than doubled in the past year and still cannot keep up with the demand, so I am reaching out to you ...

Continue reading this article ... ... more from Adam Greco

A Useful Framework for Social Media "Engagements"
Tim Wilson, Partner

Whether you have a single toe dipped in the waters of social media analytics or are fully submerged and drowning, you’ve almost certainly grappled with "engagement." This post isn’t going to answer the question "Is engagement ROI?" ...

Continue reading this article ... ... more from Tim Wilson

It’s not about "Big Data", it’s about the "RIGHT data"
Michele Kiss, Partner

Unless you’ve been living under a rock, you have heard (and perhaps grown tired) of the buzzword "big data." But in attempts to chase the "next shiny thing", companies may focus too much on "big data" rather than the "right data."

Continue reading this article ... ... more from Michele Kiss

Eric T.
Peterson

John
Lovett

Adam
Greco

Brian
Hawkins

Kevin
Willeitner

Michele
Kiss

Josh
West

Tim
Wilson

Contact Us

You can contact Web Analytics Demystified day or night via email or by reaching out to one of our Partners directly.

» Contact Information

Web Analytics Demystified, Inc.
P.O. Box 13303
Portland, OR 97213
(503) 282-2601


Useful Links