Understanding Performance Reporting in your Business
Every organisation should be in touch with the numbers, whether you are on the path to being a data-driven organisation or just starting out setting up your core reporting suite; it is important to keep in mind that no matter what metrics you select to feature in your reporting, data should never be taken at face value.
Reports feature outcome based metrics, they tell you what has happened, but do not tell you how you have arrived there. Acting upon metrics without context can be risky and potentially lead to the wrong actions being taken.
Data at face value
KPI’s are just that, Key Performance Indicators – they let you know how well your business is ticking along against the metrics that you have defined as a measure of positive or negative success. When a metric appears in red or green this is an indicator of a successful or unsuccessful outcome. Or is it?
Data requires context
All data requires context in order to understand the true measure of an outcome; for example, a page ‘bounce rate’ of 60% may seem high at first glance but the page type and content needs to be put into context:
- If the page is a campaign page with little to no calls to action to encourage the user to stay on the site then the page is working as you would expect
- If the page features all the steps of a process in one page e.g. payment and sign up, then the page is working exactly as you would expect
In this instance it would be beneficial to treat each step as a page in its own right, to deliver more accurate measures of performance.
If traffic to a site has declined, this may also seem like a warning at first, but in context you should consider:
- what marketing activity has changed to cause a reduction in traffic to site? If there has been a shift in the marketing mix then traffic is actually acting as expected;
- seasonality – most websites follow a seasonal pattern, is the decline in traffic inline with seasonality or does it go against the trend?
In order to gain an idea on this compare the figures year on year, not just week on week or month on month.
Investigation is key
Before making any bold statements or any finite decisions, investigation is key. The reports have told you the “what” but not the “why”. Looking into the “why” not only allows for full understanding of the numbers, but it also creates lessons learned for future activity.
The results of the “why” can feed into strategy or operational plans, as well as dispel any myths or assumptions around what has happened and why the numbers are what they are.
These sorts of investigations allow the business to get closer to the numbers, as well as make decisions driven by numbers when availed of all the important influencing factors.
Data is for everyone
Data reporting should be an integral part of daily operations within an organisation, the level of data sharing should vary based on function and role, but overall all business units should be in touch with the numbers and reporting should be happening on a regular basis.
Daily, weekly, fortnightly, monthly, quarterly, half yearly and annual reporting frequencies should be in place depending on what is being reported, the purpose that they serve and the audience that is receiving them.
Data-driven insights leads to effective data-driven decisioning when the right data is presented with the complete story to the appropriate audience.
- Don’t simply accept data at face value – always investigate further and put the numbers into context
- KPI’s are just that – they’re the metrics your own business has set to define how well you’re doing
- Frequency depends on what you are reporting – look at what you’re trying to achieve in line with your KPIs, and then assess how often you need to be reporting
- Metrics should be treated differently and examined in their own right – go beyond the “what” and delve into the “why”, in order to give you a clear picture of the data
- Data is for everyone, at all roles and levels within a business – from marketing to finance, to data analysts and commercial teams, it’s important that all facets of a business understand the numbers in order to act on them