Ever wonder about the pivotal role of digital analytics in a product? When asked about its significance, we often emphasize that it's the indicators revealing how users interact with a product, offering valuable insights into the overall success of a business.
In essence, when delving into metrics, we seek information to iterate the website or tweak acquisition and conversion strategies through hypotheses. This spans diverse areas, from experimenting with pricing models in business to enhancing user experience by tweaking the interface.
For instance, conducting A/B tests with different prices and payment models, measuring activation rates in each variation, all while considering variables affecting conversion and retention. We can also gather data on scroll percentage at a specific point on the website, allowing us to rearrange the narrative and modules or identify barriers hindering users from filling out our contact forms.
Ultimately, the goal of digital analytics is to gather insights into the usage of our digital product. This is crucial because without metrics, teams in development, business, marketing, design, and product would have limited ways to understand how each page and block of their digital product is performing.
To achieve this, we must carefully select metrics. There's no set minimum or maximum when working on a measurement plan; instead, different product metrics prove useful in different contexts.
Some provide insights into traffic acquisition, leaning towards marketing, others into product usage, favoring design, and some into performance, aligning with development. Each of these informs a part of the business.
Defining Metrics and Objectives
Before discussing how to define a metric, it's important to clarify that a product isn't based solely on one metric but rather the combination of many that provides a holistic perspective.
That said, the first question we always ask when defining a metric is, "What action is the most important?" For example, for Facebook, it's active users, for WhatsApp, it's the number of messages sent. Once we have this primary metric, we can then trace the actions associated with it.
For a business in need of leads, the most critical metric would be form submissions. Around these form submissions, we'd analyze traffic, most-read content, acquisition channels, percentage of stay, and page scroll.
Analyzing these additional indicators provides information to iterate on web design, modify marketing acquisition strategies, and even conduct tests on form length.
Choosing the Right Metrics
Practically speaking, the ultimate success of most businesses can be quantified in revenue. You could be increasing a metric, but if it doesn't translate into revenue, then that metric may not be well-chosen.
Contrary to common belief, it's the combination of several metrics that unifies and allows us to set priorities. When referring to multiple metrics, we're not suggesting analyzing everything but rather selecting a set that empowers us with information throughout the entire funnel, at all touchpoints.
For instance, having a lead acquisition metric is great, but if those leads aren't of quality and don't convert into revenue, we need to optimize forms, acquisition channels, design, messages, etc. The key at this stage is to have diverse metrics driving our ultimate goal and enabling us to formulate performance hypotheses.
Returning to the previous example, we might increase form submissions, but if the leads don't qualify due to insufficient page content or inappropriate form fields, it's about metrics providing information, leading to questions and continuous improvement.
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