Various teams or departments within your company may even track specific data points. Often this information is not centralized or easily shareable with stakeholders. Furthermore, you may not even know whether the metrics you collect align with your business goals. The best way to combat these issues is by measuring the impact of your efforts on your business.
Table of contents
What is a measurement strategy?
To measure your impact, your business will want to create a measurement strategy. This is an overarching plan that determines how your business goals will be measured. This strategy starts at the top. From there, it follows a path from high-level objectives to smaller measurable goals such as metrics, KPIs, and finally, segments within each metric.
Why is it important?
Collecting data on all aspects of your business, especially your marketing campaigns, shows you what’s working and what’s not. Once you are armed with this knowledge, you will be able to make the much-needed adjustments.
Profitability (ROI)
One of the most important metrics your business will want to track is its return on investment (ROI), as this will show you how profitable your business really is. You want the money spent acquiring customers through marketing and sales funnels to be less than what customers spend on your product or service. Overall you want to earn more in sales than you spend on marketing. A good measurement strategy will take this into account and define how you will measure profitability.
Performance
It will also help you set expectations for growth. If your website or app only has 1000 views or users per month, you most likely cannot expect to grow to 10,000 or 20,000 views in the following months. You may feel your website is underperforming, or you may need to adjust your expectations for growth.
Decision making
Tracking metrics can help you evaluate business decisions and know if the changes you made brought positive results. For example, once you know your website or app is underperforming, you can make decisions to address the issue. You may need to adjust your marketing campaign or adjust a feature on your product. By tracking the analytics, you will see if the changes you made accomplished what you intended.
Forecasting
While you cannot know the future, you can observe and measure market patterns. Tracking your business’s KPIs and metrics will help you see patterns and build a forecasting model. This approach will help you predict or estimate the future result. It will reveal the ‘market potential’ of your product or service.
