|Measuring Metrics for Success|
|Written by Gabriella Sannino|
|Tuesday, 10 July 2012 05:03|
Welcome to the information buffet. Today, we're serving up a bite-sized info-morsel on business funnels, metrics and Key Performance Indicators for your consumption. It's a hefty meal, but the summary is this: quite simply, one can glean a ton of information from the data provided on web analytics programs. That data can lead to exciting – and productive – change for your online business.
Although data is abundant through various tracking programs, the problem for the uninitiated is the struggle to answer these questions:
Most importantly, what can I do with the data?
The Standard Business Funnel
Successful entrepreneurs don't always start with college-level training. In fact, many don't. Because of this, many entrepreneurs may be unaware of the simplest of business processes when they first start out. One example is the fact that every business goal has a business funnel.
Although various places add in or take away part of the funnel, the standard is:
Awareness (or Reach) is pretty self-explanatory. Simply put, you can't move people through the business funnel if they've never heard of your business. Therefore, examples of awareness might be:
Acquisition, according to InvestorWords, is "acquiring control of a corporation, called a target, by stock purchase or exchange, either hostile or friendly. Also called a takeover."
It's also when your company gathers a social network connection or any other act that brings your company into contact with the consumer.
Engagement is "a response that does not actively and directly affect the company's business goals." This is a rather broad definition, and one that can be somewhat tricky.
However, a YouTube comment could draw attention to your product, which causes a visit to your site, which causes sales conversion, which in turn causes a regular customer. In this case, did the YouTube comment directly contribute to your company's business goals?
The short answer is: no. There were a lot of steps between point A and point Z. Although the YouTube comments may have started a process that ended in sales, there are too many points in our imaginary sales funnel where things might negatively or positively affect the conversion process.
Conversion is similar to engagement. However, the definition differs slightly: "a response that actively and directly affects the company's business goals." If one of the business goals of your site is to gain more leads, then a visitor contacting your company for a proposal is a conversion.
If you want visitors to share their personal information to receive downloadable resources and they do so, this is a conversion.
Not too long ago, conversion meant sales. With the multiple touch points, processes and various offerings a single site might have today, a conversion is simply when the visitor does what you want them to do, whatever that might be.
Retention is the recurring activities of repeat customers or visitors. If one of your visitors converts and becomes a client, they fall under the "retention" section. If a customer becomes a repeat customer, this is retention. If the open rate on your email newsletters maintains a steady rate, you've retained that size of readership. In other words, if they shop again, they've completed the short form of the business funnel.
The Advanced Business Funnel
The average business funnel leaves out a few things, such as satisfaction. At each point of the standard funnel, there is a brief moment in time when the individual subconsciously answers the question: am I satisfied with this step?
Think about it. Although you may not consciously say, "I'm going to buy this product," when you see a comment on YouTube, you're subconsciously asking the question, "Is this product worth buying?" We’re a very savvy consumer society; unlike cows to the slaughter, we know when we've stepped into a funnel and entered the sales process.
Awareness & Satisfaction
You, the potential consumer, read the YouTube comment about our XYZ product. As you enter into our business funnel through word of mouth, you become the target acquisition. The comment will have to produce something that satisfies your instinctual aversion to marketing.
If the comment appears legitimate (i.e. not spam) and the information is inviting enough, the WoM has succeeded and you'll proceed to the next step in the business funnel. Notice, however, that satisfaction is mandatory.
Acquisition & Satisfaction
Your curiosity from the YouTube comment has caused you to search for our XYZ product. Our site appears in the search results for your query. Here, let's pause for a moment of potential satisfaction. Our search snippet will again have to satisfy the instinctual aversion to marketing.
At this moment in time, you're still in the "informational" stage, and our business funnel should account for that. Assuming all is well, our search snippet satisfies and you click through to our site, becoming an acquisition.
Engagement & Satisfaction
As you look over the well-written landing page, you're looking for elements specific to your needs and expectations. You need a question answered, and haven't immediately found the answer. A small, timed-response pop-up in the right-hand corner asks you if you'd like to speak to a sales representative. You ask your question, the sales representative answers and you are satisfied with the answer. Or not, and you fall out of the funnel. Satisfaction is crucial to the road you take.
Conversion & Satisfaction
If you've stayed in the business funnel, you now buy our XYZ product. You have officially converted. We're happy. - BUT – Our goal, as is the goal of most businesses, is to create return customers. For you to become a return customer, our reaction to the conversion has to satisfy you. You have to enjoy our product, like how we dealt with you and so on.
Retention & Satisfaction
We are pros at providing top-notch customer service. Our product is excellent and exactly what you wanted. You couldn't be happier. We couldn't be happier, either. You've reached the finish line of the business funnel and retention is achieved. We have a new repeat customer. Win. Win. Win.
However, you now have expectations about our company and about our product. Each time you interact with us, we will need to satisfy those expectations. As you can see, satisfaction is still an integral part of the funnel.
Defining & Using the Important Data
At each point of the business funnel is a node of important data. Your mission, should you choose to accept it, is to define what that important data is for your site and business goals. This data, in turn, is used to define trackable metrics. You need to answer the question: "What data is being returned that is important to the success of this step, and which metrics reflect that data?"
Let's look at Facebook as an example:
Your Facebook Insights says your Friends of Fans is 430,281. Your total likes are 710. Your site receives approximately 50 visits per month. At this point, it's just data. The numbers are just sitting there, soaking up white space. You have to ask yourself:
What part of the funnel does this data fall under? Those 400,000+ Friends of Fans are part of your reach, or Awareness. In other words, this is the first step of your business funnel! That's a lot of pressure on your Facebook page, but any campaign that targets this section has the potential of exponential goodness for your ultimate business goal of success.
What metrics will the campaign/changes affect? (i.e. Which metrics should I track to provide the best information on success?) In this example, metrics might be "Friends of Fans" and Likes, since both increase reach. You might start watching how many people see each post – not as a metric, but due to the potential of finding out more about your audience and which posts received more shares.
However, you have to keep in mind why you're trying to increase reach: to move more people into the business funnel and on to the Acquisition step. With this in mind, a Key Performance Indicator, or KPI, to track would be the metric that tracks whether people move into that step. In this case, the KPI would be visits to your website from Facebook.
Satisfaction. It isn't guaranteed. However, as pointed out above, it's crucial to the success of your business goals. As you move on with the provided example and expound it to meet your goals, remember that each step has a level of satisfaction that must be met for the consumer to move further through your funnel.
You have a huge amount of information coming at you, but it can all be filtered into the business funnel. At each stop, whether it's Awareness, Acquisition, Engagement, Conversion or Retention, take the time to define the important data and metrics. Set up secondary goals within the funnels, and actionable plans to achieve those goals. Ask, "What can I do to improve the results of this step?" Choose real KPIs – the ones that really help you track whether a step is successful.
The only way to success is to change for the better. When you begin to understand how analytics, KPIs, tracking and business funnels work together, you'll be able to pinpoint changes that move your business in the right direction.
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