The Effectiveness of Your Metrics

There is a misconception that often occurs within data analytics, especially considering the rising value and importance of information. Often companies will consider any data to be an asset. That is, any data is good data. However, this is fundamentally untrue. It is a fallacy that sees businesses spend large amounts of time and money to obtain results that are, ultimately, useless. The tools that are being put in place to obtain and interpret data are called metrics. These are fundamental to our information assets, as well as our ability to reach our business’ potential. Our metric design is crucial. The effectiveness of your metrics underpins your success.

Consider Your Outcome

An effective metric is one that supports an outcome. Although it may seem counterintuitive to predetermine the outcome, it actually benefits your business. For example, consider approaching the data of a company’s registered users and online traffic. There are many metrics that can be drawn upon to describe the information. It may even be flattering. A large number of user signups may incline you to believe that your business is a success. However, as attractive as this data may seem, it is not constructive and may be misleading.

Your business or website may collect many user signups. We remain unaware, however, as to how much time a user will spend with your company, or how often they will return. Not only is the information unhelpful but it has also cost the business time and money to collect it. By first considering an outcome, we see this scenario change. If the business intends to optimise the cost of advertisements then there is already direction that may be taken. The business may design its metrics to support change within its advertising.

• Which adverts generate the most clicks?
• How many of the customers are returning and how many are new to the business?
• How much time was spent between clicking the advertisement before spending money?

Clever and Clear Design

When considering what it is that you want to achieve, as opposed to can achieve, you are implementing direction into your design. This not only works to the benefit of your operational cost but it also orientates your team and reduces misunderstandings. Knowing the desired outcome leads your team to avoid unhelpful and fruitless analysis, working toward only what has been clearly mapped.

Your project may lead to the realisation that an area of data may be directly unquantifiable. However, knowing the outcome you would like to achieve means that you could interpret this area another way. Through clever organisation, your metrics may offer the ability to imply the data. For instance, while user satisfaction may be difficult to collect or interpret, the satisfaction for your service could be implied in other ways. Metrics such as returning custom, number of refunds, or amount of new user signs ups through existing user recommendations can be used to imply the satisfaction your customers have with the service.

Gain More Insight

Data continues to be incredibly valuable. Without the right tools or approach, however, it may end up being the opposite. For advice on how your business is using data or for assistance to support its potential, seek out expert analytics advice from a data group, such as Outlier Technologies.