According to Gall’s law, if your business is to succeed, it must rely on your various individual departments, like production, marketing, sales, and support, operating well on their own. Because businesses are complex organizations, proper management of resources and data is really important. And management is nothing more than the art and science of making sure those individual departments all function smoothly.
As we noted in “Moving The Needle On Email Marketing KPIs”, if you are not careful, the metrics you use to manage your department’s success can deceive you.
This happens for a number of reasons, and it’s why we have stressed that a positive ROI is the most important indicator of success. Yes, you must measure open and clicks as indications of email marketing performance. Those KPIs are important, but only if the changes you make to improve those processes actually cause increases in revenue.
This video from Adobe, “Click, Baby, Click!“, illustrates our point very well. It tells the story of two ecommerce managers at the fictional Encyclopedia Atlantica who start getting really excited as they check their real time analytics.
Then, they irresponsibly present some out of context data to their boss, who goes on a spending spree. He’s pressing his entire chain of supply to ramp up production because he’s been told that their display network has just scored some kind of ecommerce bonanza.
At the end of the video, you realize the customers are not really there. The mistake was not that the ecommerce managers measured the wrong KPIs. They measured the right KPIs, but they drew the wrong conclusions.
The video also highlights the importance of useful attribution models. It appears that the encyclopedia company has a severe attribution problem with their analytics setup. Endless clicks on the same button during the same session ought to indicate a confused visitor instead of myriad enthusiastic customers.