The Double-Edged Sword Of Measurement

“You get what you measure.” This is great news for anyone wanting to lose weight or learn a new skill—just start measuring. Measurement provides the information needed to improve, as well as subconsciously invoking positive results.

The problem with measurement is that it leads us to focus our lives on those things that are easiest to measure. And just because something is easier to measure doesn’t means it’s more important.

One of the reasons people become workaholics is because measuring success in a career is so straightforward—salary, job title and promotions all make for easy measurements. Compare that with developing relationships, building a family or raising good kids. Relationships with family and friends are going to be the most important sources of happiness in our lives, yet investing time and energy into relationships doesn’t come with metrics to easily gauge your success. There are no spouse promotions or ladders to climb with your kids.

The Double-Edged Sword Of Measurement

It seems to me that there is actually a correlation between how hard something is to measure and how important that thing is to be happy. The depressing part of the above chart is when you align it with where most of our time goes. We spend much more time on the things that can be measured, and ultimately less important for personal happiness . It makes sense: We are hardwired to form habits around rewarding activity. When we accomplish a goal or taste the sweet fruit of success, it’s tempting to keep pushing the same levers over and over again, investing every extra hour of time or ounce of energy in whatever activity yields the clearest and most immediate evidence that we’ve achieved something.

But that doesn’t mean you can’t create ways to measure your commitment to raise a family or have a happy marriage. Just because the metrics for focusing on relationships are a little more abstract doesn’t mean they don’t exist. You just need to choose actions that are measurable and keep track of your progress

Want To Change? Measure Yourself.

Is it the data that’s collected that helps us improve or is it the mere effort of measuring that makes the difference?

A 2006 study in a German hospital found that simply telling staff that their “hygienic performance” was being monitored improved hand washing by 55%.

In another study, two groups of teenagers were told they would be using a new kind of toothpaste. One group were told they would be monitored, the second group were told they wouldn’t be. After three months the first group had reduced their plaque levels from 70 to 54 percent. The second group had gotten a little lazier, with plaque scores of 78 percent. The only difference was that half of the kids knew they were being monitored and the other half did not.

One more example: The national weight control registry contains a database of more than 5000 individuals who have lost a significant amount of weight and manage it keep it off. Since 1994 the registry had conducted surveys of the successful losers in hopes of identify strategies that work. The most powerful factor is simply stepping on a scale. 80% of registry applicants weigh themselves at least once a week, and more than a third weigh themselves daily. And when daily scale steppers dropped off their monitoring, they began to eat more, and sure enough they started to gain the weight back.

When you pay attention to your behavior you subconsciously invoke positive results simply by continuing to observe your behavior. It’s called The Hawthorne Effect: a phenomenon where individuals improve an aspect of their behavior in response to their awareness of being observed. This idea can be applied to our own lives by tracking our behavior. Want to spend more time with family, loose weight, read more books, watch less TV? Measure it.

 

Measuring Relationships With Quantity Time

Some things appear to not be measurable. Things like love for a significant other. Presenting a number for how much you love someone would not be an easy task. But what if there was a metric that gave you an indication of how much you loved someone? Its purpose wouldn’t be to see how much you love someone compared to how much your friend loves someone else, but for the purpose of focusing on keeping whats most important top of mind (measurements tend to do that, after all). The metric for measuring love that I have in mind is one that we all have at are disposal time.

But isn’t it quality time that is most important, not quantity?

In Frank Bruni’s article for The New York Times, the answer is an emphatic no.
He says,

We delude ourselves when we say otherwise, when we invoke and venerate “quality time,” a shopworn phrase with a debatable promise: that we can plan instances of extraordinary candor, plot episodes of exquisite tenderness, engineer intimacy in an appointed hour…people tend not to operate on cue. At least our moods and emotions don’t. We reach out for help at odd points; we bloom at unpredictable ones. The surest way to see the brightest colors, or the darkest ones, is to be watching and waiting and ready for them. There’s simply no real substitute for physical presence.

If we say that the relationships we have with others are the most important things in our lives, what would our calendars say? What would happen if we set a goal for quantity-timethe number of nights out with spouses or number of outings with kids or  visits to extended family members and then tracked our progress? If this looks like a sterile way to nurture a relationship consider the more likely danger of letting time pass by while we intend to spend time with others but do nothing. This is why, Bruni says, “As soon as our beach week this summer was done, we huddled over our calendars and traded scores of emails to figure out which week next summer we could all set aside. It wasn’t easy. But it was essential. ” If you don’t consciously plan for it, it doesn’t happen.

Whatever threat to sincerity measuring time spent with others creates, I believe it’s easily made up for in the increased chance of catching a moment that is priceless. As Bruni says, after spending sufficient quantity-time connecting with his niece, “it’s not because of some orchestrated, contrived effort to plumb her emotions. It’s because I was present. It’s because I was there.”

Zach’s Best Of 2015

This year I watched 102 movies, almost the same as last year (103) and 174 episodes of TV – a 40% increase over last year (still 20% less than the high in 2013 of 216).
The best ones were:
Whiplash (the best movie I’ve seen in many years)
Cheap Thrills
Coherence
Blue Ruin
Fury
Star Wars: The Force Awakens
TV:
Black Mirror (the episode “The Entire History Of You”)
Silicon Valley S2
Rick & Morty S1 & 2

I read 35 books, 12% less than last year, equal to 2013
Best ones:
Touch by Claire North
The Road To Character by David Brooks
Defending Jacob by William Landay
Here by Richard McGuire

Best music I listened to in 2015:
On The Attack, Langhorne Slim
Never Be The Same, Built To Spill
They Call Me Steve, Teenage Bottlerocket
Let Go, The Very Best
Far Away, Junip
Bigger Than Love, Benjamin Gibbard
Get Well, Nothing
Feel The Lightning, Dan Deacon
Hot Dad Calendar, Cayetana
Clearest Blue, Chvrches
Saturday, Sports
System Fucked, Leftover Crack
Molly, Palehound

Best moment: New baby boy!

Most annoying: Getting tons of mosquito bites on my legs while on vacation in Tulum Mexico
Runner up: 1 hour+ commute to work for a few months before moving into new house

What I thought I would never do: Selling off rental properties

Most fun: Staying up all night with best friends to see new Star Wars movie

Worst moment: Flooded basement in new house

Most disappointing: Car broke down on way to Mt. Hood to go snowboarding for first time

Most nervous: Barely passing written test to keep my motorcycle license in Portland

Best purchase: a bunch of magic tricks off of Amazon to do a magic show for my kids
Runner up: Water bottle rocket

Most painful: Falling on bike in rain on way to work

I’ve lost my mind moment: Remodeling entire house

Funniest: Watching fan costume contest at Star Wars Celebration in Anaheim CA

Most surreal: Walking in Portland’s beautiful Forest Park 10 mins from house thinking, I live here now!

Site Wide Conversion Rate Is A Pretty Crappy Metric

When you look at your site wide conversion rate, what does it tell you? What action does it inspire? What would you do differently if your site had a 1% conversion rate versus your site having a 3% conversion rate?

The answer to all of those questions is that there is no action to take. There are too many things that can happen in between a visit and an order for conversion rate to be a good gauge for what to do next. There are so many factors that can swing site conversion rate—amount of marketing investment, price of products, seasonality—that the metric has become as un-useful as looking at impressions to gauge online marketing success. (Looking at conversion rate to optimize marketing channel can be beneficial because it is tied to two actions that can be manipulated off site – marketing investment and marketing message.)

Instead of conversion rate, how about using these metrics: Basket Rate (carts/visits), Checkout Rate ( checkouts/carts) or Checkout Conversion Rate (orders/checkouts). As opposed to conversion rate (visits/orders), each of these metrics is tied closely to specific actions that are both necessary to purchase and improvable.

Two Sides To Using Web Analtyics

Marketing Optimization relates to measuring success by marketing channel – paid search, display, retargeting, affiliate, email, social and then using that information to alter the marketing investment and the marketing tactics. When you see a low conversion rate for certain marketing channels you might decide to decrease your spending in those areas or change the marketing message, placement or frequency. Or you might discover that the landing page you’re using is driving visitors to your site’s internal search and you can use that data to choose a better landing page. All of these changes happen off of the site.screenshot-docs google com 2015-11-13 14-42-19

The other side of using web analytics tools is to analyze data with the intent to alter the user experience. This is where you treat each site section with a purpose and rate each site section against how well it is performing against the site’s goal of getting visitors to product detail pages > to add to cart > to checkout > to click the order submit button.

Recognizing these two sides of web analytics tools is beneficial because they answer two very different questions to two very different departments: how do I improve return on investment for the marketing team and how do I improve site conversion rate for the site stakeholders. It’s easy to get them mixed up and to misalign the data you’re providing to the one’s who will benefit the most from it.

 

Every Site Section Has A Purpose

There are certain actions that need to happen before a visitor can purchase—visit a product detail page, add to cart, checkout, make it through checkout and then purchase. To decide on how to optimize an ecommerce website, it’s helpful to narrow down the options of what to work on first by focusing on these required steps. Every section of the site then has a purpose: getting the user closer to taking one of those necessary steps.

When analysing a homepage or category grid page, focus on making changes that will get more visits to the product detail page.
When analysing a product detail page, focus on making changes that will increase the amount of visits that will click the add to cart button.
On the cart – what’s going to get more clicks on checkout?
In check out – what’s going to get more clicks on the order submit button?

There is plenty to do to decrease friction and increase motivation on each site section to get visitors from one step to the next. The best way to prioritize is to work backwards. When a visitor first gets to the site, their purpose is very unclear, there are a million different reasons why that visitor showed up—how do you optimize for that? By comparison, when a user is in the checkout process, their motivation is high and their purpose is clear – they want to checkout with the items they’ve selected. So the ideas of what to do to increase checkout conversion are easier to get to: improve the form fields, decrease distraction, increase confidence.

Every Site Section Has A Purpose

Data Is Only Part Of The Solution

Expectations for web analytics is often misplaced. With so much data available, the answer to the question, “what is causing the site to make/lose money” must be in there somewhere. The truth is that the answer is not in the data to begin with. That’s not the point of the tool. It doesn’t give you answers, it gives you questions to ask.

The data will allow you to form a hypothesis that you can use to test changes on the site, and then measure what happened. “I wonder if we can attract even more traffic if we create more content like the kind that has the highest visits.” “I wonder if making the add to cart button a more prominent color will increase products added to cart to reverse this negative trend in conversion rate.” “I wonder if making the guest checkout button appear first will decrease the amount of shoppers that abandon the first step of the checkout process.”

Data isn’t the solution. It’s the ideas that come from the data, applied to see what happens next, that is the solution. Small data can instigate just as much of a good idea for what to do next as big data.

The Website Research Quadrant

Learning from your customers to improve your website can be gathered in multiple ways. Each of the four quadrants in the diagram below provides different kinds of information, each important in it’s own way.

Website Research Quadrant(3)

In the Attitudinal half, you receive information about what people say they would do or what they say they want. A lot of surveys and interviews can be unreliable. User’s memories are fallible and can miss details that are important to design. People also say things that they think you want to hear so as to not be impolite or against the grain. That said, some simple survey questions can be revelatory when related to user’s motivation, as in “why are you visiting the site today?” This combined with another simple question, “were you able to accomplish your task?” can give great insight.

The behavioral half gives you the advantage of seeing what users actually do not just what they say they’ll do. Web analytics can give huge amounts of quantitative data that you can’t find anywhere else, but the caveat with all that data is that it doesn’t tell you why like surveys will and it doesn’t tell you how. Deciphering how users interact with a product detail page or how they navigate from page to page isn’t easy with web analytics. There are pathing reports but they don’t help much. This is where usability testing comes in. It allows you to watch users and learn how they attempt to perform tasks. This gives you insights that aren’t accessible from any other source.

Website Research Quadrant(4)

Relying solely on one source would be a mistake. Combining any two is worth more than the sum of their parts.

How Much More Could You Make If You Got Rid Of Your PPC Agency?

Paid Search agencies typically charge a percent of spend for their services. So if you’re spending $50K to $100K a month, your fee could be anywhere from 6% – 8%. What if instead of paying the fee, you managed your paid search account yourself, took the money you were paying to the agency and rolled it into your media spend?

Let’s say you’re spending $100K on media and your agency has the task of getting a return on ad spend 4:1. At an 8% fee, the agency makes $400K in revenue with your account and you pay them $8,000.

But If you took the $8K and added it into your cost, you’re real ROAS would be 3.7 ($108K / $400K). So if you took over the account and spent $108K and were able to do no better than a 3:7 ROAS, it’s a wash – you’d still make $400K in revenue.

But what if you could do just a little bit better than 3.7 ROAS with your $108K budget? A 3.75 ROAS would make you $5K more. Over the course of a year that’s $60K in incremental revenue. Not bad. The return grows the higher the ROAS. If you do just as good as the agency at a 4:1 ROAS, you’d make $384K more in a year.

You could take what you’re paying the agency, put it into media spend ( the same net expense as you already have), have the account perform 4% worse than what they’re doing (3.8:1 ROAS) and make  $124K more in a year.

ditch the ppc agecny and make more money

Caveat 1: there is a diminishing return on incremental ad spend which may make that extra $8K a month not return at an equal ROAS as the rest of the account.

Caveat 2: Could you really keep an ROAS higher than 3.7:1 on your own when the agency was doing a 4:1? Maybe (probably).

A good way to find out the level of skill and effort managing your own paid search account would take is to look at the percent of revenue that these three categories make up: brand terms, product listing ads, and non-band terms.

Chances are, the majority of your account’s revenue is coming from brand terms. Second to that is product listing ads. In fact, there’s a good chance 75% of your paid search revenue is made up of those two sources. And the thing about brand terms and product listing ads is that they take little effort to maintain. There is very little skill involved to keep 75% of your paid search revenue flowing in at the ROAS it is now. The typical paid search account looks something like this:

percent of revenue ppc

And the ROAS of the non-brand terms is probably 2:1. The reason your account has a 4:1 ROAS is because brand terms and PLAs return so high that it rounds out the account after taking in all the bad non-brand return.

So the real question is, can you nix the agency, take the fees you’d pay to them and wrap them into your spend, and then get your non-brand terms to perform at a measly 2:1? Worth considering.