There are 2 types of metrics:
Key Metrics Dictate Overall Health
These metrics are like a thermometer for your business. For a metric to be key, you need to be able to look at it and know immediately whether your business is doing well or not.
Drill-down Metrics Answer Big Questions
These metrics are more granular and help you understand what’s going on in specific areas of your business.
Typically, you use both types of metrics together, not one or the other. If key metrics tell you things are going well, you use drill-down metrics to help you understand why, so you can replicate your success. For example:
Improving On-site Banner Clickthrough
The Average Banner Click % is a key metric. It tells you, across your entire site, how likely it is for a visitor to click on a banner ad in one of your articles. To help us understand why the click rate is 3.25% and how we can improve that number, we need a drill-down metric: How likely is a visitor to click on a banner ad in one specific article?
Improving Search Traffic
In this example, the key metric is New Visitors
How many first-time visitors are landing on your website? To learn more, the drill-down metric would be Share of Search: What percentage of search traffic is owned by what person or brand?
Here, you’d compare how much search traffic you’re getting for a keyword to how much your competitors are getting from that same keyword. This would allow you to find areas where you can compete with much larger businesses because you own the keyword. Alternatively, it will tell you which keywords you need to put some work into.
And in this example, the key metric is Average Order Value
To drill down, you’d need to look at actual orders. You want to know where the bulk of the revenue from your Average Order Value is coming from. This could reveal that you need to move things around in your sales funnel. Or reveal that you need to push one promotion over another because its average order value is much higher.
As you can see, there are 2 ways you can give your metrics a job.
You can assign them to a specific stage of the funnel: TOFU, MOFU, OR BOFU.
You can use them to measure the health of different areas in your business and then answer deeper questions about how and why. Once you understand the overall health of your business and where things are working, begin to use metrics for problem solving.
Digital Marketer. (n.d.). The Ultimate Guide to Digital Marketing. Course Hero. Retrieved January 25, 2022, from https://www.coursehero.com/file/94978188/Ultimate-Guide-to-Digital-Marketingpdf/