With conversion rate optimization software like Asym, a key ingredient to profitability is measuring the true impact on business success. Which metrics actually deliver?
To get there we first need to put metrics into categories.
This is the second post in our series on metrics. It helps make sense of a wide variety of metrics by grouping similar metrics together into 4 broad categories.
The other posts in the series provide different perspectives on which metrics are most valuable. The first post looks at a Harvard Business Review perspective on how Tesla shows existing metrics are outdated. The third post presents the traditional view of metrics, with consumption metrics driving everything else. The fourth post considers the balanced view, with each metric contributing an equal measure to business success. The fifth and sixth posts look at the business view, and the ‘what pays the bills’ view, respectively.
Types of Metrics
Metrics come in all shapes and sizes, with more labels than a supermarket.
Like a supermarket, it’s easier to find what you are looking for when metrics are organized and grouped together. Lead generation doesn’t belong alongside page views, and putting time on a page alongside more sales is like putting engine oil with onions. They don’t belong together because they do different things.
So what metrics belong together, and where does the bread and butter lie?
Metrics organized by category
Metrics can roughly be organized into 4 main categories:
When people talk about Page Views, Downloads, Social Mentions, and Time on a Page, they are referring to Consumption metrics.
When people talk about Likes / Shares / Retweets, Forwards, and Inbound Links, they are referring to Engagement metrics.
When people talk about Form Completions, Email Subscriptions, Blog Comments, and Conversion Rates, they are referring to Lead Generation metrics.
And when people talk about Closed Sales or sales opportunities, they are referring to Sales metrics.
Each category has its own strengths and weaknesses when measuring performance, and each contributes its share to profitability.
So what optimizes what?
While it appears too direct to say, consumption metrics are used to optimize consumption. Sales metrics help optimize sales. Putting time and resources into one category is a great way to boost metrics for that category. But boosting consumption metrics on the assumption it will boost sales or using consumption metrics to predict sales has inherent weaknesses. As attention becomes a scarce commodity, second screen use becomes prevalent, and mobile becomes a socially acceptable way to kill time, assumptions about metrics need to be adjusted to suit reality.
It all depends on the size of the picture
There are a wide variety of consumption metrics that get a lot of attention, yet consumption metrics are just a part of a much bigger picture. Its the sense-making, the putting the metrics into the proper story, that contributes most to business success.
As a possible example, most companies note that mobile has about a half to a quarter of the conversion rate of desktop.
most companies note that mobile has about a half to a quarter of the conversion rate of desktop
When the focus is on consumption, the orthodox response has been putting more resources into improving the mobile experience. With a focus away from consumption metrics and more towards sales metrics, companies may begin to put more resources into desktop, because that is where sales happen. In our industry we say you can’t help people read when they aren’t there to read, and you can’t help people buy when they aren’t there to buy.
you can’t help people read when they aren’t there to read, and you can’t help people buy when they aren’t there to buy
Reality is people skim, so our software is designed to help messages stand out when people skim. When it comes to metrics, it may be time to question the effectiveness of trying to get mobile viewers to buy. It’s possible nudging mobile viewers to go to a larger screen may end up lifting the sales metrics more than anything else.
It’s possible nudging mobile viewers to go to a larger screen may end up lifting the sales metrics more than anything else
Tesla has demonstrated that old-fashioned metrics can miss the bigger picture. The challenge is finding that bigger picture specific to the industry and niche your company is in.
To look closer at how metrics affect business success and which strategies best suit your business model, in the following posts we will review the strengths and weaknesses each category brings to the table. What is bread and butter to one business may not work for another.
Thanks for reading!
Chris, Ken, and Edward