Saturday, October 8, 2011

Measurement of Effectiveness

I was speaking with a friend of mine (the editor of a company website) and he was sharing with me his current challenge of maintaining his team as his company is looking to cut head-count as the number of visitors to the company website has stagnated. Fortunately, or unfortunately, my friend's challenge is not unique. Companies are profit driven and cost-center adverse, and a business unit's Measure of Effectiveness (MOE) is determined by its assistance to the top-line or contribution to the bottom-line.

My response to my friend was as follows:

A company's website is like a magazine. Thus, depending on the size of the magazine's targeted demographics, the maximum possible number of visitors is “finite.” Similar to the print edition of Singapore bridal magazine, the maximum possible circulation in a given year is capped at the annual number of marriages. While I agree that there maybe some overlap with those getting married the following year, by and large the numbers will not vary much as someone who is already married or not about to get married is unlikely to purchase a bridal magazine.

I then asked my friend to consider if the visitor count had reached what I term “maximum saturation.” If it did and, he wanted to grow the number of visitors, he then had no alternative but to enlarge the targeted demographics. If this enlargement was not possible, my suggestion to him then was to be up-front with Management on their expectations for the company website. In the unfortunate event that Management was still unreasonable and determined that they wanted an increase in visitor numbers, my suggestion to him was to then add the root cause of MOE. In this instance, he then needed to move the company's focus away from visitor numbers as a MOE to others such as conversion rates or even “engagement” numbers.

My point is this, Perhaps in the past, when the Internet was nascent, visitor numbers was the appropriate MOE. Unfortunately, in the era of Social Media, where effective online marketing is now about “engaging” the customer, visitor numbers (aside from being capped by demographics) are no longer useful in determining effectiveness. In the era of Social Media, companies need to select and monitor more useful MOE such as conversion rates, engagement percentages and even referral rates.

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