It has been six years since the original version of this article was published on the Sweetspot blog. During this time, reporting dashboards and the entire martech industry have evolved in a significant and irreversible way. We wanted to celebrate these years by revamping this post. Let’s get back to the basics and slice and dice KPIs together!
Emerging tech changes everything, and it’s clear that dashboards and KPIs are not excluded from the impact. Back in 2013 acronyms such as Machine Learning (ML), Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR), Internet of Things (IoT), Blockchain, 5G, Robotics were not the daily bread of marketers and analysts. However, these are now fundamentally rewriting the way actions and interactions take place. Not a day goes by without plenty of new articles out of the oven talking about the implications and the footprint of these phenomena on customer experience and marketing technology.
Let’s have a sneak peek at the new attributes that KPIs are expected to offer nowadays.
1. Automated Insights
Machine Learning has taken the digital world by storm. Surely, we cannot deny this. We’re not the only ones concluding that KPIs will only be relevant and compelling if businesses revamp old metrics to match digital competencies of today — and tomorrow, as published on Medium. The article includes a summary of a global survey and a research report, and in its reading we find a statement that we couldn’t agree more with:
‘Clearly, yesterday’s metrics need to make way for predictive analytics and machine-learning capabilities that will offer better insights to move the business forward.’
Apart from many promises, there has been much hype around it as well, making it tough to decide whether particular “AI-powered” labels actually represent true breakthroughs that will have a tangible impact on our day-to-day life. Not too long ago we were talking about why and how ML-powered Automated Insights are here to stay. Can we assume Automated Insights have moved past the “Shiny Object” stage? We believe so!
2. We consider easily tracked goals as the device to help you stay on track. We encourage you to be an ambitious goal setter, tracking and managing your goals systematically.
3. Although it might seem we are stating the obvious, flexibility can be treated as a new attribute. Things have changed and now this is a must-have; but it shouldn’t be taken for granted. By flexibility we mean the ability to segment or filter on the fly through in-built selectors in a dashboard, in addition to a powerful date selector allowing you to change from a time range to another in a matter of seconds and defining to which time period you’d like to see the comparison values in your KPIs.
We plan to continue exploring different ways to increase KPIs’ ability to satisfy the increasing expectations of the users who digest them. KPIs’ main mission is to empower marketers and analysts to make the most out of their data, leading to smarter decisions.
Are you facing a reporting-related challenge? Share your thoughts with us or any suggestions, and we’ll be glad to research new topics!
Here’s the original article, it was written by Meg Wilcock and published on March 27, 2013.
Key Performance Indicators (KPIs) have become widely accepted as a standard of measurement for performance management. Their success is based on their ability to give insight on actions taken in attempts to improve current and future performance, and also their ability to tie responsibility for actions to specific teams or team members.
As opposed to metrics which simply demonstrate the current state of events, KPIs are created to reflect the difference between current performance and clearly defined business objectives, and are able to clearly indicate where actions for change should be taken. They should answer crucial organizational questions such as “where are we now?”, “what do we want to be (and when do we want to be it)?” and “how are we going to get there in the most efficient and cost-effective manner?” Successful organizations will develop a strategy in which effective indicators are connected to corporate objectives and tracked, viewed and analyzed according to specific assets within a Digital Insight Management system.
KPIs are non-financial indicators that can be either quantitative or qualitative and measure results compared to set goals. By linking them to target values, we are able to evaluate current performance in relation to expectations. Once this variance between actual performance and targets is shown, actions can be taken and viewed in terms of success in achieving these set goals. Theory dictates that KPIs should be SMART or specific, measurable, achievable, relevant, time-based and monitored frequently. They must also be based on actions, events and assets which you can control, and influence. Whilst it may be interesting to monitor external factors which you cannot control, they cannot be used to improve performance and are therefore not KPIs.
KPIs can be used to assist with:
There are two types of KPIs:
Both types are relevant and crucial for continual and effective performance management.
Many management frameworks exist that can be used as models for selecting KPIs. Similarly, some digital analytics companies and professionals have created their own models of classifying and grouping KPIs which can be employed for Digital Insight Management.
One such model is the traditional AIDA marketing funnel model (attention, interest, desire, action). Other marketing funnel models follow similar ideas using different terminology such as awareness, consideration, purchase, preference loyalty. Another model is that employed by Eric T. Peterson, which is focused more on digital assets and comprises of acquisition, desire, loyalty. The Core Management Group created their model based on the ideas of Kaplan and Norton and their balanced scorecard, proposing: acquisition, satisfaction, retention, market share and profitability as the pertinent broad categories for classifying objectives. Avinash Kaushik and Jim Sterne take a quite different line of thinking and propose the three-part model of: make money, save money and make customers happy. Most recently, Facebook and Forrester have proposed a circular model as opposed to the traditional funnel or process models. This continuous cycle of: learn, investigate, purchase, interact, is based on the fact that social media highly influences each stage of consumer behavior- from pre-purchase to purchase but also post-purchase.
When electing KPIs it may be useful to select indicators which fall into the categories of the aforementioned models to ensure that you are monitoring all the important aspects of your online performance. However, companies may wish to select their own model where they find that their objectives do not fit within these categories or that these categories are not broad enough to include all of their objectives. The most important aspect when selecting KPIs is to ensure that they are tied to your own individual corporate objectives.
Do you use a well-known marketing model to categorize and select your KPIs?
Not Another Dashboard.