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Tim Peter

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October 22, 2012

You Don't Have 50 Key Performance Indicators

October 22, 2012 | By | No Comments

Measures that matterI’d like to take a moment to consider the notion of what exactly a key performance indicator is. Companies often talk about using key performance indicators to measure and manage their business. And, in theory at least, that’s a good idea. But many companies fall short in their implementation because they don’t properly identify their true, key performance indicators. Oh, sure, they track loads of numbers, review lots of data and produce numerous reports. But do those numbers, data and reports mean anything about the current state and future health of the business?

Sadly, the answer for many companies is “no.”

So let’s start over by looking at key performance indicators in more detail.

A key performance indicator is, simply, a number that tells you whether you’re on the right track to achieve your goals.

That’s it.

For instance, a financial services company I worked with tracked “DART’s” as their key performance indicator: Daily Average Revenue Trades. The company made most of its money on transaction fees from trades executed. However, not all trades produced revenue for the company due to internal account management, error corrections and the like. So simply counting the number of trades, while interesting — and potentially valuable from an operational standpoint — didn’t offer a clear picture of how the business was doing each day. But, subtract the non-revenue trades from the picture, and suddenly you’ve got a formula for accurately representing how the business was doing.

You can measure the same with any of your marketing activities, regardless of your product or service. What does a sale look like in your business? Is it an actual sale? Is it a lead generated? If you’re a non-profit, is it a donor pledge or an additional email address added to your mailing list?

The only problem with sales numbers, of course, is that they represent a trailing indicator. That is, the number doesn’t reflect the financial health of the business going forward. It only reflects a snapshot in time of where the business is right now. A better option when it exists is to look for leading indicators, metrics that inform you how the business will look in the future. Some examples include phone calls received, email addresses captured, leads generated, brand searches, etc.

Is social media activity — friends, fans and followers — a leading indicator? Well, the jury’s still out. But I’m going to make the case for yes. Here’s why:

Any consumer who takes the time to share something about herself with you — whether through Facebook, Twitter, Foursquare, LinkedIn, Google+ or whatever the social media flavor of the month is — has indicated interest beyond the average consumer. That is, all the ones who didn’t choose to connect with you. And years of research into market effectiveness shows that consumers exposed to repeated messages transact at higher rates and, often, higher dollar values.

Of course, the point here is to determine the metrics in your business that actually show how business is doing and manage to those (you can check out our guide to Web Analytics Fundamentals for help in how to measure them). To unlock a door you need a key. And you can’t unlock your business’s true potential if you’re not looking at key performance indicators.


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Tim Peter & Associates helps companies from startups to the Fortune 500 use the web to reach more customers, more effectively every day. Take a look and see how we can help you.

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Tim Peter

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August 28, 2012

Analytics Tuesday: 8 Excellent Analytics Lessons

August 28, 2012 | By | 2 Comments

Measures that matterToday’s lesson looks at how to make your web analytics work better. Here’s what we’ve got:

  1. Leading off, let’s look at improving analytics to improve your business.
  2. Next, take a look at ways to track your conversion rate and the rest of the Website Analytics Fundamentals series.
  3. Speaking of conversion, it’s useful to look at exactly what an industry average conversion rate is.
  4. Of course, A/B testing is a great way to improve conversion. So check out the ultimate A/B testing case study roundup.
  5. Unique visitors are an important component of tracking traffic and conversions. This post asks whether unique visitors are a meaningful measure of your website’s traffic.
  6. Pulling all your reporting together requires thinking through what your online marketing dashboard should look like.
  7. No matter how you report, make sure to pay attention to the 7 keys to successful web metrics.
  8. And, finally, don’t ignore these 8 vital tips to get the most out of Google Analytics.

See something missing? Leave a comment or drop me a line and let’s talk about your needs.


Are you getting enough value out of your small business website? Want to make sure your business makes the most of the local, mobile, social web? thinks helps you understand how to grow your business via the web, every day. Get more than just news. Get understanding. Add thinks to your feed reader today.

Or subscribe via email.

And while you’re at it, don’t forget to follow Tim on Twitter.

Tim Peter & Associates helps companies from startups to the Fortune 500 use the web to reach more customers, more effectively every day. Take a look and see how we can help you.

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Tim Peter

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August 2, 2012

Should "The Fancy" Tickle Your Brand's Fancy?

August 2, 2012 | By | One Comment

I’m often asked my opinion of various marketing channels, both online and offline. With the ever-increasing array of social, local and mobile channels available, it’s no wonder that many businesses aren’t sure whether to chase the “hot new thing” or if these up-and-comers won’t last.

Here’s a case in point. Recently, I’ve been talking a lot about Pinterest and its uses, so much so that TechTarget recently included me in their look at Pinterest as part of a social CRM strategy. And yet, in the time since I gave the interview, Pinterest’s star seems to have dimmed in favor of upstart social bookmarking/e-commerce site The Fancy.

Unlike Pinterest, which started out purely as a way for people to share and save images they enjoyed, The Fancy is built around e-commerce. For instance, “fancy” a stay at a resort in the Maldives?

Well you can reserve a stay, right there on the embedded image.

Gotta have these hipster-approved chukkas?

Again, click the little price tag button and they’ll be on their way to your Brooklyn crib (or whichever hipster-approved community you live in) in no time.

Slick.

The Fancy offers businesses and brand many of the benefits of Pinterest, but also has baked-in its monetization strategy from the outset.

So, here’s the question: Is The Fancy right for your brand? Is it time to ditch Pinterest in favor of The Fancy?

Maybe. But maybe not.

Now before you accuse me of playing coy, keep in mind that there’s a bigger question at play here. This isn’t a matter of whether Pinterest or The Fancy is better. It’s a question of whether Pinterest or The Fancy (or LinkedIn, or Facebook, or Twitter, or…) is better:

  1. For you
  2. For your customer

Too many brands and businesses I encounter spend so much time worrying about what everyone else is doing that they don’t look at what makes sense for their brand or their business. But as I recently mentioned, different customers use different channels at different times in their purchase decision. The Fancy might be a great place to locate customers when they’re ready to purchase, but it might fail miserably at attracting attention in the first place. Pinterest might generate lots of traffic, but that traffic may never convert for your brand. Or vice versa.

The reason I put so much emphasis on web analytics and conversion tracking and the like is that they’ll tell you whether something’s working for your brand — or not. Your strategy needs to allow for testing new channels and new ideas and your execution needs to include appropriate measures and metrics from the get-go.

The Fancy might be a great way for your brand to reach new customers, generate huge sales and grow your business. Or it might be a monumental waste of time. Put your focus on a clear testing strategy for your marketing and you won’t have to ask anyone whether or not you should fancy The Fancy. You’ll know.


Are you getting enough value out of your small business website? Want to make sure your business makes the most of the local, mobile, social web? thinks helps you understand how to grow your business via the web, every day. Get more than just news. Get understanding. Add thinks to your feed reader today.

Or subscribe via email.

And while you’re at it, don’t forget to follow Tim on Twitter.

Tim Peter & Associates helps companies from startups to the Fortune 500 use the web to reach more customers, more effectively every day. Take a look and see how we can help you.

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July 31, 2012

What is "conversion rate," anyway? (Math for Marketers)

July 31, 2012 | By | One Comment

Defining conversion rateA couple weeks ago, I got into a friendly debate about the whether it’s better to optimize conversion rate or the total number of conversion. I argued that conversion rate optimization is better. Twice.

But I got a couple emails from people asking a fundamental question: What is “conversion rate,” anyway?

Now, don’t worry if you’re among those people asking the question. There’s a relatively simple answer. However, “conversion rate” can mean different things to different people in different contexts.

The simplest possible answer is this:

Actions Taken ÷ Potential Customers = Conversion Rate

The challenge, of course, is in defining “Actions Taken” and “Potential Customers.” So let’s take a minute and do just that.

Calculating Conversion Rate

To have a conversion rate, first you need an action. That action is usually called a conversion. So, what’s an example of a conversion? Most typically when people talk about “conversions,” they’re talking about sales or orders. As we’ll see in a bit, if that’s all they’re looking at, they’re being a bit short-sighted, but we’ll come back to that in a minute or two. For the moment, let’s stick with convention and just look at sales.

Imagine you sell widgets. Every time a customer orders a widget, you’ve got yourself a conversion. Your conversion rate in this case is the number of orders (conversions) divided by your “Potential Customers.”

So, how do you know who your “Potential Customers” are?

Potential Customers

The easiest way to think of “Potential Customers” is to think about how many people you exposed to your message. And you’d think counting the number of people exposed to your message would be relatively easy. After all, online marketing lends itself to analytics, right? Well, yes.

But…

There are at least 6 common ways of counting “people” that I know about:

  1. Unique visitors to your site.
  2. Visits to your site (sometimes called “sessions”).
  3. Unique visitors or visits that enter your shopping cart.
  4. Logged-in visitors to your site.
  5. Unique visitors or visits to a specific landing page.
  6. Unique visitors or visits from a specific marketing message (e.g., an ad or an email).

I’ve used all of these at one time or another. Hell, I’ve often used all of these at the same time depending on what I wanted to know about my customers’ behavior. I’m not going to debate the pros and cons of each today (I’ve looked at how to measure traffic as part of my “Web Analytics Fundamentals” series and I’ve reviewed the pros and cons between unique visitors and visits before as well — drop me a line if you want to talk about what’s right for your business). But the basic idea is that each tells you about which customers you’re reaching.

For instance, I often work with hotel companies on their e-commerce and marketing. And they’re mostly interested in selling hotel reservations. In one company’s case, the vast majority of their customers only reserved a few times per year and booked their stay on the first or second visit to the site. So we calculated conversion rate by dividing unique visitors with a 30-day cookie into reservations sold (you can check out a glossary of web analytics terms if any of this is unfamiliar to you).

By contrast, another company I worked with sells inexpensive replacement parts for machinery. Because their customers can visit multiple times per month and may make multiple purchases per month, we calculated conversion by dividing visits into orders.

Which leads to a key point: There’s no one perfect way to measure conversion rate. What matters is how well your measures model your customers’ behavior. In the first case, unique visitors were a better indicator of how well the site performed at converting an individual prospect (each visitor typically only ever made one purchase), while in the second we measured how effectively the site converted prospects each time they visited.

What About Other Conversions

So, as I’d mentioned above, there are other types of conversion besides just sales. If you remember, I started my definition by saying it’s “Actions Taken.” Not sales. Not orders. Not leads generated. Actions.

In fact, it’s a best practice to measure any activity you want your customers to take. For instance, newsletter subscriptions, account registrations, loyalty program enrollment, whitepaper downloads, form submissions and so on all represent conversions. They just represent ones with highly divergent economic values.

Anything that helps you connect more deeply with your customers provides a conversion opportunity. Spend some time looking at all the calls-to-action on your site or in your marketing and include those in your overall conversion reporting.

Speaking of which…

Reporting Conversion Rate

One key point to note here: If you track conversions other than sales (and you should), make sure you’re clear on what actions you’re reporting when you talk about “conversion rate.”

For instance, let’s imagine a business that sells athletic shoes. It offers on its site a shopping cart for customers interested in purchasing its shoes, an email opt-in form offering weekly specials and a white paper on how to improve your running technique.

Now assume the company sells 30 pairs of its running shoes online, enrolls 50 people in its email list and gets 75 downloads of its white paper for every 1,000 visits to its site. What’s their conversion rate? Well, their site manager could report conversion rate as 15.5% [(30+50+75)/1,000 = 15.5%].

But is that the fairest representation of what’s happening?

I’d say “no.”

In fact, I’d report each conversion separately, noting it something like this:

Sales Conversion3%
Email Opt-in5%
White Paper Downloads7.5%

A solid online marketing dashboard makes it clear to your audience what your goals are and how well you’ve met them. Senior managers live for clear answers. Don’t try to baffle ’em with bullsh… um, stuff. Just show them what’s really going on.

A Final Conversion Rate Definition

Now we’re back to where we started. Conversion rate is:

Actions Taken ÷ Potential Customers = Conversion Rate

To calculate it for your business

  1. Define “Actions Taken” appropriately for your marketing and e-commerce activities.
  2. Determine the metric that best represents “Potential Customers” for your specific activities.
  3. Divide your “Actions Taken” by your “Potential Customers” for each action.
  4. Report Conversion Rate by Action.

Follow those four steps regularly and you’ll never have to wonder about what your conversion rate is again.


Are you getting enough value out of your small business website? Want to make sure your business makes the most of the local, mobile, social web? thinks helps you understand how to grow your business via the web, every day. Get more than just news. Get understanding. Add thinks to your feed reader today.

Or subscribe via email.

And while you’re at it, don’t forget to follow Tim on Twitter.

Tim Peter & Associates helps companies from startups to the Fortune 500 use the web to reach more customers, more effectively every day. Take a look and see how we can help you.

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Tim Peter

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July 19, 2012

Why Does Google Hate Data?

July 19, 2012 | By | No Comments

I know, I know. You’re shocked. After all, what could I possibly mean when I ask, “Why does Google hate data?” Don’t they live and die by data? Don’t they do crazy things like test 41 different shades of blue?

Yep.

So why do I ask whether they hate data?

Here’s why. Earlier today I was looking at my web stats for the week and I noticed a funny jump:

Dod visits google plus

That’s right. Comparing yesterday to today, my visits had gone up a remarkable 59% (this, by about 11:00 AM, by the way; it’s now up about 200%).

Wow, right?

Well, like any good analyst, I wanted to see where the traffic came from, so I headed over to my handy-dandy referral report, which told me this:

Google plus top referral

Cool! Someone popular on Google+ must have posted a link to my site. But who? And where?

Well, that’s easy. You see, in the Referrals report in Google Analytics, you just click on the referral domain shown and you can see the Referral Path that brought the visitor to your site. For instance, these are the pages on Invesp.com that link to me:

Invesp blog rank referral

So, imagine my surprise when I clicked on “plus.url.google.com.” Instead of seeing where on Google+ someone linked to me, I saw this:

Google plus referral

Yep. Google hides the referral URL from Google+. You have no easy way to find out who’s linking to you, or why, or when. WTH?!?

Now, Google claims to do this to protect user privacy. Which, in of itself, is an admirable thing to do.

But here’s the problem. I searched on Google+ for the URL to my page getting all the traffic (as it happens, the post about Google testing 41 shades of blue I just mentioned) and found that it was in a comment on a Danny Sullivan post. Danny, as you might know, is the editor of (2012 Marketing and E-commerce All-Star) Search Engine Land. He’s a fairly public figure. And, in fact, his post on Google+ was also listed as public. How, exactly, is his privacy at risk here?

Ironically, Danny wrote a somewhat scathing piece taking Google to task for this “mixed privacy” message when they stopped sending keyword data to sites. It’s not clear what their motivation is here, but privacy protection isn’t it.

Nope, we all thought that Google loves data. But that’s not true. Just as they showed with restricting keyword referral — and now Google+ referrals — they really love the data that only they can see. When other people have access to data, though? Google hates that.


Are you getting enough value out of your small business website? Want to make sure your business makes the most of the local, mobile, social web? thinks helps you understand how to grow your business via the web, every day. Get more than just news. Get understanding. Add thinks to your feed reader today.

Or subscribe via email.

And while you’re at it, don’t forget to follow Tim on Twitter.

Tim Peter & Associates helps companies from startups to the Fortune 500 use the web to reach more customers, more effectively every day. Take a look and see how we can help you.

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