In marketing, we have a tendency to throw around data-oriented words. We hear words like metrics, analytics, and KPIs on a daily basis. In some cases, they are used almost interchangeably, but is that correct?
Well, the answer is, unsurprisingly, no.
While it may be easy to just stick one of these words in and hope it’s correct, you will gain more credibility if you use these words properly.
We’ll start by defining each term to make it perfectly clear which is which, then go on to discuss the intricate differences between these terms that are so similar.
Analytics are when data is used to answer specific, business-related questions. They are a method of logical analysis. Analytics are like scientific studies. Data is collected and used for learning about one specific thing, how it works, its parts, etc.
Most importantly, analytics are future-focused. They are used to determine things that could or should happen in the future.
Analytics can answer these business questions which I found here:
- Which new markets should we pursue?
- How can we acquire new customers?
- Which existing markets should we grow?
- Which products should we develop?
- Which channels create the greatest response rate?
- Which customers are most likely to buy?
Metrics are a standard of measure that involves using numbers to come to conclusions and focus on counting and tracking the data you have to get a better view on what’s occurring in an organization. Metrics are based on historic data points; they do not look forward or make any sort of goals. They simply tell you what is currently occurring and what has occurred in the past.
They are tangible numbers that are collected internally and can be used to track accountability.
Here are a few of the types of metrics that you may run across in your B2B marketing efforts:
- Activity measures – the hard and soft costs related to production
- Output measures – the results of the things you produce, like website traffic, conversions, etc.
- Operational metrics – refer to things like cost per lead and similar internal metrics
Key performance indicators (or KPIs) are intended to measure success. They grow naturally from an organization’s objectives. Once you have the objectives set, you need to measure your progress as you set out to achieve those goals. That’s what KPIs are. They are progress markers that tell you whether or not you are on track to meet your goals.
KPIs are important to track your progress on goals, while analytics are forward focused, used to make predications and logical conclusions about future actions. Metrics are mired in the past. They aren’t looking forward; they are explaining what happened. They are about getting a better view of what has occurred and why.
You can use metrics to aid you in answering the questions you asked to create your analytics. KPIs can then act as performance indicators that measure your progress on goals you created as a result of analytics.
So that answers that. Metrics, analytics, and KPIs are not interchangeable, not even a little. Using them as such is not just lazy, it’s wrong. So make sure to keep this guide handy when you are writing or reading about your favorite sets of statistics.
Tell us in the comments section:
- Do you see people mixing up these words?
- Are there other related terms you think we should clarify?