We often talk today about “data-driven business/project/marketing management”, how “we are data-driven” or that “we make decisions based on data”. But to do all this, you need the very data that is necessary to get. As many experts and studies have shown, the most valuable data is generated directly by your customers (called first-party data).
This data can of course be collected and used to develop your company, subject to all legal requirements.
But what is at the origin of first-party data collection? It is the measurement strategy – i.e. the design of what data I want to collect and how. After the measurement design (understanding the creation of the measurement strategy) comes the implementation project and, last but not least, the long-term maintenance of the measurement. What should a measurement strategy (sometimes measurement strategy, measurement plan) contain and how do we work with it further within our team?
What is a measurement strategy?
A measurement strategy is not just a document to satisfy your boss. It’s an overall approach to gathering data about how your business is performing. In this article, we primarily address measurement strategy for digital projects, ecommerce sites or services offered online. However, you can easily incorporate interactions outside the digital world into your measurement strategy.
- A measurement strategy translates the ideas of owners and senior management into a clear set of metrics and dimensions to be extracted from analytical tools.
- It provides a framework for communication within the team with respect to analytics and is a prerequisite for successful analytics implementation.
- It is often part of the marketing strategy and enables data-driven marketing and business activities.
Who is responsible for the measurement strategy?
Who is responsible for the strategy depends primarily on the maturity of the project and the desired resulting complexity of the measurement strategy and framework (and often the size of the organisation). A measurement strategy is something that should be put together by an experienced team – one that should consist of:
- Individuals with a clear sense of the organisation’s overall purpose and defined business objectives,
- a marketing expert,
- an analytics expert,
- and an implementer who is able to translate the requirements into technical specifications.
Scope and perspective
In developing a measurement strategy, the scope and point of view that the author or the entire team chooses to adopt is very important.
Endorsement from senior management is desirable but not a prerequisite. However, from our own experience, we can confirm that all stakeholders welcome this endorsement.
In reality, we most often see the marketing team (or a section of the marketing team) initiating the development of a measurement strategy, using increasingly advanced marketing technologies.
What is the process of developing a measurement strategy?
The process of developing a measurement strategy should always fit the culture and practices of the organisation. It is also based on the size of the organisation and the team to be involved in the development. In general, however, it often follows these steps:
- Definition of business objectives, strategies and tactics,
- Definition of the objectives of each strategy,
- Definition of metrics and identification of KPIs,
- Definition of the required segmentation, the plan for a specific period and the responsible persons,
- Design of the implementation plan,
- Implementation execution,
- Testing and documentation of implementation,
- Long-term development of the measurement strategy and associated metrics.
What does a meaningful measurement strategy include?
To be meaningful, a measurement strategy needs a solid foundation. In this case, these are clear business objectives for a specific period (usually one year). These are usually set by the owner of the company or a group of directors leading the company.
The following points are arranged as they should be discussed and completed in the context of a measurement strategy.
1. Business objectives
You should start by identifying business objectives, referred to in English as Business Objectives. According to digital analytics guru Avinash Kaushik, business objectives should be DUMB – simply put “like for dumb”.
2. Strategy
In this case, it depends on the maturity of the company’s strategic management. It may be that strategies already exist within the annual plans.
Most often we encounter measurement strategies drawn up by the marketing or sales department of a company. This corresponds to the focus of the individual strategies – often it is about increasing sales, reaching more customers, etc.
3. Tactics
In case you pride yourself on quality planning, we recommend adding tactics for individual strategies in the hierarchical development of the measurement strategy. The tactics should aim to meet the objectives and determine the shorter-term tasks to be performed within the strategies.
4. Objectives
Objectives define (not only in a marketing strategy) the desired state to be realised within a given strategy or tactic. It is the target situation in which the organisation is to be when the strategies and tactics are successfully accomplished.
Here it is useful to reflect on the questions:
- What is the website supposed to do within my strategy?
- What am I trying to achieve?
5. Metrics
Metrics identify a specific numerical value that you want to measure. This is where we get to the heart of the measurement strategy. Namely, we determine what data, out of the amount of information we are able to gather, is key to us in the current situation.
6. KPI
KPI stands for Key Performance Indicators. We usually consider KPIs to be Macro Conversion (Macro Goals) – key metrics that management will require you to measure and is important to you as well.
If there are metrics that you don’t need to look at right away on Monday, and you are only interested in the data occasionally, the metric may not be marked as key – so it stays as a supporting metric or drops out of the measurement strategy altogether. So at this point, we decide the importance and priority of each metric and whether it can be considered a KPI.
7. Segmentation
At this stage of planning the measurement strategy comes a key point that is often forgotten and causes problems, especially in reporting.
Segmentation is about determining which views of the data (slices) you will consider in your evaluation and measurement. These segmentations then determine the cardinality of the data and the amount of meta-data that needs to be collected.
The most commonly used segmentations are by:
- Marketing channels,
- geographic location,
- demographic attributes,
- product categories,
- equipment types,
- specific campaigns.
The segmentations chosen can often have a major impact on the overall technology implementation. Therefore, you should consider segments as early as possible. Segmentation also determines the level of customization that will be required in the implementation project.
8. Data sources
Already when developing the measurement strategy, it is advisable to clarify where the metrics according to the respective segmentation will be obtained. Ideally, it is advisable to think about the difficulty of obtaining such data and the frequency at which you would like to obtain the data.
Here you can name the key technical requirements that need to be considered in the implementation of the measurement strategy.
9. Responsible person
In our experience, we recommend assigning responsible persons to each metric, especially for larger goals. This avoids “collective responsibility” for the results and you will always find the right person to make decisions about everything (strategies, tactics, metrics, goals, metrics development).
10. A specific plan for the period
In the case of a plan, we identify specific numbers for a specific period that are important to us. The most common choice is a year, but it is also possible to work with longer or shorter time periods.
11. Notes and other points
As part of the development of the measurement strategy, it is possible that other points will arise that should be noted. Often a supporting narrative, presentation or video is added to the measurement strategy (in the form of a table, pyramid or otherwise graphical representation of a set of objectives and metrics). Anyone new to the team can then easily understand what you’re digging for.
I have a measurement strategy. What next?
If you have a measurement strategy that your team (most often sales and marketing) can identify with, then comes the implementation phase.
Implementation is where the selection of an analytics solution occurs. The analyst translates all of the above into a technical specification for the chosen analytics system (Google Analytics, Smartlook, etc.) and then coordinates with the developers to implement the measurement strategy according to the implementation plan.
1. Events
Nowadays, the most common implementation is the so-called events, which represent individual user interactions within the digital world, from which most metrics are then calculated. Proper naming and structure of events will facilitate the work of the entire team in the implementation, even in the future.
2. Parameters
Each event, regardless of the analytics system chosen, carries a wealth of meta-data. Some meta-data is collected automatically by each system (e.g. browser version, device type, etc.) and some meta-data can be added at will.
This meta-data is often called parameters and may include, for example, transaction amount, products purchased, packages purchased, lesson completed, etc.
3. Triggers
Here, at first glance, the logical description of each metric (e.g., the number of purchases made by the user) is translated into concrete technical specifications. Namely, you need to specify whether to send purchase information before payment, after payment, or both; or whether to send registration information after email verification, before, or both.
Thus, we translate the verbal expression into a technical form that will then be implemented as program code directly within the web or application solution, where the developer needs to know the exact moment to pass the key data to the analytics system.
It may be that a metric needs multiple events from which it is subsequently calculated.
Eleven points from the measurement strategy plus three more implementation points? Isn’t that too much? If you need help with your measurement strategy or its implementation, contact our team of professionals.
Implementation Coordination
After the initial preparations of the measurement strategy, implementation comes next. Data is added to each metric to indicate whether the item has been implemented, or ticketing and collaboration systems are used to manage the implementation as a project.
Testing, documentation, maintenance and accuracy
Implementation is followed by testing. Never forget the documentation of the implemented measurement! This is at the heart of every implementation project in our team of analysts.
Without proper documentation, you will forget what has been set up in a few weeks. In addition, the implementation may differ from the original measurement strategy.
Every implementation of a measurement according to a measurement strategy must be maintained and monitored. Therefore, in the long run, set up monitoring of individual metrics (alerts, guarantees, automatic reports, data layer monitoring), check if the measurements are being measured correctly and do regular measurement reviews.
It’s also a good idea to monitor the accuracy of individual metrics over the long term and communicate this within the team. For example, transactions pulled from an accounting system or e-commerce will be perfectly accurate, conversions in advertising systems will never be complete by design (technical limitations, blocking of measurement, need for consent, etc.).
The whole team and the management of the organisation should be informed about the phenomenon of the accuracy of individual metrics. The accuracy of the data is then related to further processing, cleaning and filtering of the data, which needs to be taken into account.
Reporting and visualisation
For reporting and visualisations of measurements according to the measurement strategy, it is crucial to clarify the following points.
- Data timeliness – do you need real-time data or is last month’s data sufficient?
- Data format – what format do you need the data in – do you want to have ready-made charts or a data output to work with next?
- Who should have access to the data – which team members should have access to the data (or what data)?
- Speed – what are the requirements for the speed and interactivity of the reports
It is always a good idea to seek a professional team to create visualisations. After all, there is nothing worse than a bad visualisation of the right data. It may then become apparent within the visualisation that some areas need special analysis to be carried out e.g. customer analysis etc.
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