Avinash Kaushik: Every Critical Metric Should Have A BFF!

InsightaaS: Avinash Kaushik is the author of two best-selling books (Web Analytics 2.0 and Web Analytics: An Hour A Day), an advisor to/lecturer at many different educational institutions - including University of Toronto and UBC - and digital marketing evangelist for Google. He is also the author of the Occam's Razor blog, which provides "excellent analytics tips" to an avid community of readers. Tip #26, "Every Critical Metric Should Have A BFF!" provides an excellent example of Kaushik's approach. He describes a premise - in this case, that metrics should be paired with adjacent measurements to provide context for findings - and then illustrates his point with a rich variety of practical examples. Here, he demonstrates that a combination of metrics - click through/bounce rate, visits/visitors, conversion rate/task completion rate, etc. - provide much richer management-level analytics than do single measures of success.

There is unlimited amount of data thrown off our digital existences. (Or to use sexy term du jour , we have big data!)

Our leaders (companies, agencies, teams) have to deal with an incredibly complex landscape, and they don't have enough time.

The very natural outcomes is this ask of us: "Can you make it simple? What's the one thing I should care about?"

And we oblige: "Conversion Rate, that's it." Or "don't worry about anything except Facebook Likes." Or, "I read this blog, Bounce Rate is the only one!" Or, "Profitability, it is so sexy, just focus on Customer Lifetime Value, no, sorry, I mean Profitability."

To be fair, it is not just our leaders. Because the combination of complexity, limited time and available time, everywhere in the organization people want the one thing to watch for.

Honestly, who can blame them.

But the problem is that single golden metrics hide valuable insights and, more often than not, drive bad behavior. Especially in medium and large size organization because responsibility gets fragmented pretty quickly. (In small organizations there is a lot more end-to-end ownership amongst the few employees, and if something is going awry things hit the fan pretty fast. This is a great behavior correcting mechanism.)

So, how do we fix this problem in a responsible manner?

Here's my proposal: If you are pushed to have a single golden metric, give it a partner. For each metric deemed to be critically important, identify an immediately adjacent contextual / OMG we are on the right track metric that will give more context while incentivizing the right behavior.

The key is the immediately adjacent part. The BFF metric you find should not be one that is very far away. It should be immediately adjacent.

The reason is that it is easy for every discussion to come down to: "Well, all we care about is Profit. Why not just measure Profit?" That is right, we will measure it. But as we strive to improve the many things that result in a massive digital success, we need to look at multiple facets of our existence and we need to look at a cluster of critical few metrics...

Read the entire post: http://www.kaushik.net/avinash/excellent-analytics-tip-critical-digital-metrics/