During a recent Web clinic – “Five Steps to better Metrics” – one audience member tweeted two questions: “How can I know if my analytics data is doing well or underperforming?” and “Is there any industry-based benchmark [to measure the performance of my analytics against]?”
I thought these were great questions, so in today’s MarketingExperiments blog post, we will discuss the purpose of analytics, what you should be tracking, and the ultimate benchmark for your industry. (Also, you can always join the conversations on Twitter during our free live Web clinics at #webclinic to ask questions of your own … and share some answers from what you’ve learned.)
The purpose of analytics?
In the Web clinic mentioned above, Dr. Flint McGlaughlin, CEO and Managing Director, MECLABS, cautioned that, “We can get lost in mounds of data.” He offered these three insights into the purpose of analytics:
- The goal of all customer research is to enable the marketer to predict customer behavior.
- Therefore, the primary usefulness of metrics is not in answering, “How many?” but rather in answering, “Why so?”
- Ultimately, metrics enable the marketer to see the cognitive trail left by the visitor’s mind.
How can you know if your analytics data is doing “well” or “underperforming”?
Interpreting your key performance indicators will not help you until you first establish the type of research question you want to answer with your data.
This may appear overly simple, yet as Flint explains, far too often the numbers being generated by a metrics platform are the focus of an organization’s attention instead of the deeper meaning behind the numbers themselves.
Flint also teaches that to translate your performance into a predictor of customer behavior, you must first ensure that your metrics platforms are able to track four primary types of analytics:
- Amount – How many instances of a particular action are occurring?
- Source – Where do the prospects come from?
- Nature – What do prospects experience on your site?
- Results – What do prospects do on your site?
The ultimate conversion benchmark
In our MarketingSherpa 2011 Landing Page Optimization Benchmark Report (a free excerpt is available at that link), a similar question, “What is the right conversion rate for my industry?” was presented, and the answer to this question is (perhaps counter-intuitively) simple as well.
No matter the industry, there is no such thing as a “right” conversion rate.
While metrics give insights into your customers, they also set the stage for your testing and optimization efforts. And, the results of those efforts lead to future testing to improve on your results.
So use your metrics to find leaks in your funnel, prioritize those leaks, and then improve the numbers by optimizing to fix those leaks, and worry far less about what others are doing.
Because there really is only one ultimate benchmark. What is that all-encompassing number? The tongue-in-cheek answer provided by the books is – a conversion rate of 100%.
Related Resources:
Web Analytics: Tips from your peers about metrics
Marketing Metrics: Why all numbers aren’t created equal
Test Plan: Build better marketing tests with the Metric Pyramid