Tuesday, July 30, 2013

A KPI's Analysis Taken From A Real Life Situation.

A KPI's Analysis: A Real Life Situation.
Based on the conversation generated around last week’s post, entitled "How To Build A Social Media Strategy That Makes Sense For Your Business", I thought it’d be appropriate and useful to complement it with an example on how a KPI analysis ("Key Performance Indicators") should be put in place, trying to maintain an equally easy-to-understand language so that you could use this approach when measuring results of your social media strategy.

Let me start by telling you that "Key Performance Indicators" are not exclusive to social media or marketing. They’re definitely not.

“Performance indicators” are used in any situation in which you have to:

  • Identify relevant information for decision making.
  • Discard irrelevant information for decision-making.

And they are called "Key" performance indicators because it’s that indicator and no other which gives us the information required to make a specific decision. It’s that simple and I will show you how it’s done (or, at least, should be done).

A performance analysis taken from real life: My bike rides.

As you know (and if you didn’t, you do now) I’ve been riding my bike for a little over a year now. Since I started, I use a mobile application, Endomondo, to monitor my stats and progress as I go. I've tried others apps, but I really like this one and works very well for me.

Like many other applications, Endomondo gives me a wealth of very important information about my biking sessions. Notice all the data available to me:

Step 1. Analyze information available.

  • Activity Type (I have over 20 options to choose from).
  • Date and time.
  • Distance.
  • Duration.
  • Average speed for the session.
  • Maximum speed achieved.
  • Calories burned.
  • Hydration.
  • Minimum altitude.
  • Maximum altitude.
  • Total ascent.
  • Total descent.

As you can see, a lot of data that you may find interesting and which could easily distract you a bit as well. However, what is the first thing I do to not lose focus?

Clearly define what my goal is and, based on this, choose the information I should monitor, discarding all other stuff that doesn’t help me and keep my eyes only on relevant data.

Since my goal is to improve my riding performance on the bike, doing the same distance in a shorter period of time (therefore at a faster pace), I do proceed to discard the information I don’t need:

  • Type of activity: It is important to measure apples to apples, and not to pears. It’s not the same walking, than running or biking, therefore, the activity has to be always the same "Cycling" however it’s not relevant to my performance as such, only serves as a reference.
  • Date and Time: Not relevant to my performance, but serves as a reference only.
  • Distance: Although it could seem important, in my case (as my goal is to improve my performance) it isn’t. Distance only relates to the time I have available to ride: If I have only a couple of hours, I go for a short distance, if I have more time (and will power)then I’ll ride for a longer distance, therefore, it’s not relevant information. It allows me to compare apples to apples but, again, it’s not relevant to performance analysis.
  • Maximum speed: Not relevant at all. Along the route I follow, there are some important descents which allow me to reach top speeds. Although they rub my ego, it's not what I am focused on. Not relevant.
  • Calories burned, hydration, minimum and maximum altitude, total ascent and descent are not relevant, therefore they are all ruled out.

Focusing on what is really important: Choosing my key performance indicators.

Step 2. Choose your KPI's.
Moving on then I proceed to choose the parameters I use to measure my cycling performance. I guide myself by these two parameters: Duration of the session and the average speed maintained throughout.

All other pieces of information are used as a reference but are not really relevant to monitor.

Now the moment for the real analysis: Compare data obtained.

Next step after monitoring data is to comparing data obtained for two (or as many as you wish) different events. In my case, it’s good enough to compare two consecutive sessions.

How do I do it? Compare two sessions in which I pedaled more or less the same distance, in two different dates, and compare data obtained:

Step 3. Analyze the data.
My data analysis goes as follows:

  • Make sure both sessions were performed on two different days.
  • Make sure they were all categorized under the same activity. In my case, “Sport Bike”, which is between casual riding and mountain bike. Why is it important? Because I need to compare “apples to apples, and not to pears”, remember? Statistics you get from Facebook, are not equal to those from Twitter, therefore it doesn’t make sense to mix them together and compare.
  • Make sure distance traveled is about the same in both sessions. Again making sure to compare apples to apples, however ...
  • In the second session, it took me 30 minutes longer than the first one to do the same distance, therefore I kind of know my performance was well below this time.
  • And even though in the last session I was able to reach a higher top speed, almost 50 km/hour ...
  • The average speed of the session was (unsurprisingly) much lower than that of the previous one (20.3 km / h <22.2 km / h).

I make the last note simply to show you how maximum speed attained during the session has little relevance when it comes to evaluating my overall performance.

In this case, the two performance indicators chosen as my “Key” to analyze my bike rides show me that, this time, my results were significant lower than last time.

The most important step: The decision-making based on data analysis.

It’s useless to simply collect data, statistics, indexes, projections, scales or other figures, if all that information is not used within the decision-making process and the implementation of all corresponding actions.

In my case, the evident decline in my performance this week pushes me to evaluate which could have been the reasons behind it  (little rest, having trained the day before, etc ...), make changes so it doesn’t happen again for the next session (more sleep and not training at all the day before), go out again for another session, go for the same distance and monitor key data again, compare it with that of the previous session, and see how did it go.

As I hope you can see it now, the conversation about KPI's is not unique to social media by far. It’s a simple activity we could (indeed, should) implement in many of our daily activities to ensure we are walking in a positive direction towards achieving our goals.

Remember one last tip: Discard what distracts you and focus on the information that really matters to you.

Related article in this blog:
How to Create A Social Media Strategy That Makes Sense For Your Business.

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