By Sanna Anjum, Senior Business Intelligence Analyst, CSL
At our BI Leaders Forum, towards the end of 2022, we debated the merits of Key Performance Indicators (KPIs) vs vanity metrics. The definition of a KPI is a quantifiable measure used to evaluate the success of an organisation in meeting objectives for performance. In general, KPIs are measured via taking data from sources which are continually updating with new information and monitoring them to track progress toward a business objective. On the other hand, a vanity metric is a statistic which looks great on the surface but does not translate to any meaningful business outcome.
Many organisations follow the motto of “more is better” in regard to analytics, however, “more” can in fact be confusing, as well as misleading. KPIs are highly linked to actionable metrics, which are metrics that relate specific business actions to observable results, thereby highlighting what’s working and what isn’t. Below are some top-line differences between actionable KPIs and vanity metrics:
Since Covid-19, companies have identified a barrage of metrics to be measured, however a question remains around whether these metrics are indeed KPIs, or simply vanity metrics. Let’s take a look at some examples…
Salesforce Activity: understanding rep productivity is key within any pharma company – Which territories are being covered, are reps covering territories efficiently?
HCP Engagement: Reps must have the ability to interpret HCPs’ issues and truly understand the needs of both the customer and their patients – are the HCPs seen receptive to reps? What is the HCPs preferred method of engagement?
Promotional Activity: understanding whether promotional activities are correlating with increased sales allows companies to assign spend accordingly.
Market Share: an increase in market share allows operation at a larger scale, enabling the identification of key trends, and also market potential thereby leading to increased profitability.
Prescribing: HCP prescribing decisions directly correlate with market share – more prescriptions mean increased market share and revenue.
Sales vs Target: measuring current revenue allows companies to review sales against past performance, as well as future targets – ensuring targets are realistic and achievable is of the utmost importance.
Clinical Trials: clinical trials enable comparison of approaches to treating illness and health problems, paving the way for future growth.
FTE per Brand: ensuring that there is enough resource allocated will not only enable more accurate performance analysis but also allow the company to manage internal projects adequately.
Call Rate: many pharma companies believe the more contacts, the better – however coordinating activity via relevant approaches has far greater value – ensuring the right people are being seen and the material is being absorbed.
Number of Attendees: although group calls are an integral part of rep activity, the number of attendees does not necessarily correspond to a positive business outcome. Measuring the quality of attendee engagement would allow reps to better plan future activity by ensuring those who attend have a genuine interest.
Omnichannel Engagement: once Covid-19 hit, omnichannel engagement was pushed to the forefront of rep activity due to the need for more digital methods of activity. Although it looks great to be seeing HCPs via numerous channels, this can in fact be counterintuitive. Driving HCP-preferred engagement is now crucial to devising an engagement model which is better suited to the current climate – understanding which channels HCPs prefer and leveraging this.
Number of Consents: this of course provides companies with a view of how many HCPs they are able to engage with, however measuring the quality of engagement is far more beneficial; for example, are HCPs actively engaging with material shared?
Email Open Rate: email open rates are a reasonable metric to track the success of an email’s subject line, however there are numerous technical limitations which massively skew the numbers. Instead, the length of time spent reading an email and email responses would be more beneficial.
Website Traffic: driving traffic is undoubtedly essential to raise awareness of companies, but understanding this traffic in detail would yield valuable insights – are users engaging with the company via inquiries?
Page Views: on the surface, page views look terrific; the more views a page has, the more popular it is. Instead, companies should focus on the behaviour surrounding those views; for example, time spent per page and click-through rate.
Number of New Users: whether it be new users of an external system such as a website, or an internal system such as a consent management platform, this metric does not help companies understand users’ behaviour. Instead, measuring how active these users are, as well as those who are inactive, provides a more relevant overview of engagement.
As illustrated by the examples above, there are numerous metrics which can either be categorised as a KPI or a vanity metric, however these are of course open to interpretation. As the new year begins, now is a great time for companies to assess whether their current KPIs do indeed evaluate the organisation’s success in meeting objectives for performance.
When identifying KPIs, companies should consider 3 key questions: 1. What business decisions can we make with the metric?, 2. What can we do to intentionally reproduce the result? And finally, 3. Is the data a real reflection of the truth?.
In order to fully leverage data, it’s important to understand the relationship between metrics and KPIs, but first and foremost, ensuring data is accurate, high-quality data leads to better decision-making across the organisation.
For more information, or if you would like to discuss KPI tracking for your business, please do not hesitate to get in touch at email@example.com, or call us on 01483 528302. Click here to visit CSL’s Data Quality Management Service.