A word on email marketing, web analytics, metrics and key performance indicators

A while ago, I wrote about a survey by Alterian that found that 42% of respondents said they don’t incorporate clickstream and web analytics data into their customer and email database.

Now, I’m often using words such as KPIs, ROI metrics and metrics in general on this blog. I realize this could cause some confusion. That’s why in this post, I’ll tackle the difference between metrics and KPIs (Key Performance Indicators) and metrics.

A typical example of a metric in email marketing is the click-through rate or CTR. In web site analytics a typical example is the number of unique visitors.

To analyze and improve the results of your online marketing efforts, you need web analytics and workable parameters regarding the impact of your strategies on your online business and your business in general.

One of the main tasks in web analytics is to define KPIs or Key Performance Indicators. As I just said, these are not the same as web analytics metrics.

– Metrics are simple measurement parameters regarding one aspect of your website, email marketing or other online communication channels such as the number of unique visitors, the number of page views per visitor, the average time a visitor is staying on your web site, the open rate of your email etc.

– Key Performance Indicators or KPIs are also metrics but with some extras and they are not about tactics but about business. They are defined by management and serve a business purpose. They have a meaning in terms of the company and its activities and provide insights and decision criteria for management. KPIs are always focused on taking action.

A KPI is always a metric but not all metrics are KPIs. Although it is interesting to know the time a visitor is staying on your site and the number of unique visitors, especially if you’re an online publisher living from advertising and thus visitors and page views, this metric might mean nothing for others, like an online retailer. But for the publisher it might be, in a more sophisticated form perhaps, a KPI.

KPIs are often complex parameters that combine different metrics

What KPIs are interesting and important for you entirely depends on your business and your goals. In other words: you cannot  define KPIs that are relevant for each company.

Defining the right Key Performance Indicators is crucial. Ultimately, this exercise is even more important than choosing a Web Analytics solution!

What are potentially relevant KPIs for you?

It might be a conversion ratio KPI. This is a KPI that shows the percentage of visitors of your website that completed a predetermined (by you) business-oriented ‘task’. When combining with email marketing it might be the percentage of recipients from a specific target group (demographic or other) that opened the mail, clicked, visited the landing page and filled in a web form to get a white paper, for instance.

You immediately see that you can define various conversion-related KPIs for your website and email marketing. You also immediately see why it’s so important to analyze what your email recipients do AFTER they have clicked a link.

You can refine these KPIs as far as you want, until they offer real business-related insights.

You could, for instance, have a KPI that shows how many people coming from a search engine and residing in a specific country (where you are active) have filled in a form.

And we’re only talking conversion now. Ultimately, the conversion ratio is a quite simple KPI.

KPIs can be simple but defining the right ones in function of business goals can be a really hard task and lead to very sophisticated calculations, ask any web analist.

Bookmark and Share

Join me on Twitter

Subscribe to my email newsletter

Join me in the Social Marketing Forum