“Active measurement is about quickly acting on the insights you uncover as you go, but more importantly, it’s about good measurement planning. This proactive piece is often overlooked, even by the savviest marketers and analysts. To effectively measure, you must define expectations about how your customer will interact with your brand before you look at the numbers.” – http://analytics.blogspot.com/2013/01/insights-for-2013-understanding-your.html
Every piece of data will at some point be useful to someone. Do you want to operate on the chance that this data was correctly collected or do you want to guide the data towards the business initiatives? As Dr. William Edwards Deming’s Red Bead Experiment shows us, people will concoct a variety of reasons on why the numbers are what they are. In order to avoid this and the inevitable tampering of the tasks that produced these results; a well structured business objective measurement plan is needed. All empirical conclusions you make from the collected data will stand on a foundation of measurement.
So return to your defined business objectives and ask:
- Doable? (Can the people on the front lines actually do this?)
- Understandable? (Can you explain the objective in a short amount of time?)
- Manageable? (Are the systems in place to report on progress?)
- Beneficial? (Do you have an action plan in place for 100% success?)
Keep it D.U.M.B.!!
Once your business objectives are DUMB, then make sure data can help you answer them. The formula I use is: “We are looking for X to achieve Y as MEASURED BY Z.” Start diagramming what the ideal dataset would not only include but it will look like. What columns should it contain? What qualitative or quantitative data would be put into a cell? Is MM-YYYY ok for a cell or do you need DD-MM-YYYY? This will help you make sure that data can actually help you answer your business questions.
Now with this design in hand you are ready to plan the key performance indicators and targets. KPI metrics only help you understand how you are doing against and objective and targets are numerical values you’ve pre-determined as indicators of success or failure. An effective measurement plan lays the groundwork for building valuable and actionable KPI/target metrics. You’ll also understand how the data was collected, for what purpose, how the data was manipulated, and what formulas or models were applied during the business guided analysis.