Author: Nicole Parmar
A measurement strategy is a plan that a business uses to organize all of their goals and the ways they will measure their progress towards those goals. Typically, the measurement strategy begins with a very broad goal and then that goal is broken up into multiple different metrics that the business can measure through time.
Usually, the various ideas of a measurement strategy are combined into a single grid that’s called a measurement matrix.
Why does a business need a measurement strategy?
According to HubSpot, 80% of CEOs “don’t trust the efforts of their marketing teams.” In this case, metrics can be beneficial to both sides, helping the higher-ups clearly understand how the business is trending and helping the marketing department prove their worth.
And, regardless of internal trust, metrics are needed in order for a business to remain competitive. There is no way to continuously improve profit margins without knowing where one stands. As such, every business needs a measurement strategy.
Knowing the goals a business is striving towards and finding effective ways to track progress towards those goals is essential to any organization’s success. Your business can use either KPIs or OKRs to track progress toward your goals.
KPIs (Key Performance Indicators):
KPIs are individual metrics used to track your business’ performance overtime. Using historical data charts, you can compare today’s KPIs to the KPIs a week, month, or year ago to check for improvement and progress.
Some KPIs to track include sales revenue, cost per lead, customer value, traffic-to-lead ratio, landing page conversion rates, and organic traffic. These are listed among the most important metrics to track.
OKRs (Objectives and Key Results):
Instead of KPIs, your business may use the objective and key results methodology.
For example, an OKR might be to simplify messaging (the objective) by achieving these key results: test 10 infographics to see which one gets the best response, send out a survey to 1,000 subscribers regarding communication, and present an action plan to improve next quarter’s messaging.
Creating a Measurement Strategy
Here are the five steps to follow to create a measurement strategy for your business:
- Establish some goals and objectives for your business to work towards. Aim for both short-term (<12 months) and long-term (<5 years) plans.
- Decide on the “Critical Success Factors” (CSF) for every goal.
- Figure out the key metrics you need to track to measure your progress towards each goal (KPIs or OKRs).
- Collect the measures through a variety of means, and be sure to store all data securely for future reference.
- Calculate the metrics from the measures, revisiting overtime to look for potential improvements.