Want to know the #1 reason most companies can't attribute where revenue is coming from accurately?
Spoiler alert: It's all about UTM's.Are you using UTM's for all your marketing efforts? Have no idea what a UTM is?No matter where you are in your tracking journey, this video can help you learn how to improve your tracking skills. We have also included a transcript of some of the best insights from our conversation below:
How can I make sure that I am being data driven in my business?
You need to take emotion out of your decision making process if you really want to become a data-driven company. Often the climate of the business has a huge impact on our lives, so it's often difficult to separate your emotions from the decisions that you make, especially during the hard times. When the times are the toughest are generally when you need to be the most data-driven, and those are the hardest times to take emotion out of the equation; but if you do, it will help you to trust your decision-making process much more.Your data will always tell you a story; it just sometimes tells a story that you don't want to hear. Often we find that people stop listening to their data when it gets hard, or right when the details are becoming the most important; but those are the times when you need to listen to the story that it's telling you even more.
What are lead indicators vs lag indicators?
What does lead indicator or lag indicator mean? A lead indicator drives a lag indicator. In sales, a lag indicator would be their revenue, or number of sales made. Sales people really don't have direct control over how many sales that they make in a day, but they do have control over their lead indicator: how many calls they make that day. Content marketers don't have direct control over how many website visits they get in a day, but they do have control over how many blog posts or emails they write.Control what you can control. You almost always have direct control over your lead indicators. Focusing your efforts on improving the things that you have control over will always yield better results than focusing on the things that you have no control over. Everyone wants more leads and more revenue, but you need to drill down and find the things that drive that success.In order to understand what drives your success, you need to have tracking in place. Once you know that your data is trustworthy, you can drill into it and find exactly what yields results in your business, and those become your lead indicators. By replicating your successes and holding yourself accountable to your lead indicators, you will drive success on your lag indicators. It's all about accountability. If you hold yourself accountable to your lead indicators, you will drive that success on the lag indicators.
How do I make sure that I am tracking my lead indicators properly?
Your output is only as good as your input. Every business wants to know how they can be more effective. We have found that most of them don't even have the right tracking in place in order to even find their lead indicators though. Most businesses have several systems in place that aggregate data, but then those systems don't talk to one another, and the company isn't sure where to go to get answers to their questions. Facebook will tell you that they are getting X number of conversions per day, Adwords will claim that they produced Y result, and Google Analytics will tell you something totally different from each of those.The best place to start with tracking is at the very beginning. Before you ever create a piece of content, you need to know the intent of that content. Once you know the job of that content, you can hold it accountable to how well it performed the task. If the goal of your ad was to promote awareness, then you don't need to look at how many conversions it produced. If the goal of the ad was to drive form submissions, then the number of likes on the post isn't really important.
How does Metrics Mapping help my tracking efforts?
We here at Praxis like to go through a thought experiment known as Metrics Mapping. Metrics Mapping is a process designed to answer fundamental business questions with very specific, actionable data.
- We start by asking ourselves a business question, such as, "How do we increase conversions on our site?" or "How do we get more qualified traffic to our site?".
- Once we know the questions that we want to answer, we decide on 3 key performance indicators that help answer that business question.
- Then we ask: "Where does that data live?". For every KPI, we need a source of truth, or a place where we can pull that data from.
- From there, we validate the data. As much as we would love to just trust what Facebook or Google tells us, there are a million and one ways that your data can be skewed, lost, or misreported along the journey.
- After that, we apply formulas, set up reporting, and visualize the data.
This process may seem tedious and difficult, but it makes all of the difference in making sure that you don't waste your time on vanity metrics or tracking things that don't really matter.
What are UTM's and what do they have to do with everything that we have talked about?
As we talked about earlier, you don't have direct control over lag indicators; you can only influence lag indicators through your lead indicators. On the other hand, you have complete control over your lead indicators; but most people don't know which lead indicators have the most influence on the outcomes of the lag indicators. That's where UTM's come in. UTM's allow you to trace your lag indicators all the way back to the initial lead indicators that generated the result.UTM's pass through specific information to help you attribute exactly where traffic came from. Not only do UTM's help you create accurate source data, they can also contain information such as if it was a paid ad or an organic post that drove the user to your page. They can also contain campaign information, so you can know the effectiveness of your campaigns; they can even help you track your A/B testing efforts within the campaign.This granularity on the data unleashes the true power of your lead indicators. By knowing exactly what influences your customers to come to you, you can focus on the things that will actually drive the lag indicators, rather than blindly guessing at the most effective use of your time and money.It all comes down to what works, and tracking is the only way to know what truly works best.If you want to learn more about UTM's, their best practices, and how to build them; be sure to check out our course on UTM's here: https://datarich.thinkific.com/courses/utm-tracking-course