Descriptive Analytics

5 Steps in Descriptive Analytics

Identify Business Identify and state KPIs and/or business metrics: These should reflect key business goals of each
Metrics / KPIs department or of the company overall.

Locate Data Identify data required: Locate the data you need to produce the desired metrics.

Extract and Prepare Extract and prepare data: Data from multiple sources need to be cleaned and prepared for data
Data analysis.

Analyze data: Data analysis can be done using spreadsheets (MS Excel), or BA tools (such as Tableau).
Analyze This step also involves applying basic mathematical operations for calculating metrics and KPIs.

Present Present data: Graphical representations/ Dashboards

Business Metrics

 Quantitative measurements used to track the performance of specific

business processes at operational and tactical levels.

 Relevant to inform businesses about the progress of their different activities.

 Not the most important indicators to monitoring strategic actions.

 Examples: Lead-to-Conversion-Ratio, Return Rate, and Acquisition Costs by

Marketing Channel.
Key Performance Indicators (KPIs)
 KPIs provide a way to measure how well companies, business units,
projects or individuals are performing in relation to their strategic goals
and objectives.

 KPIs provide the most important performance information that enables

organizations (or their stakeholders) to understand whether or not the
organization is on track toward its stated objectives.

 Well-designed KPIs are vital navigational instruments, giving a clear

picture of current levels of performance and whether the business is
where it needs to be.

 Every organization’s KPIs are unique, since every organization’s

operations and strategy are unique.
KPIs Vs. Business Metrics
 While KPIs measure progress toward specific goals, business metrics are
measurements of overall business health.

 KPIs may be made up of a variety of different business metrics that give a full
picture of organization’s progress toward a goal/objective.

 Every KPI is a metric, but not every metric is a KPI

Example

 You might track the number of website visitors as a metric, but unless it’s tied to
a specific key business objective, it’s a metric, not a KPI. If the business goal is to
create 20% more sales leads over the next year, website visits alone may not
indicate whether the objective is achieved or not. Understanding how that
metric translates into other site interactions, such as form completions and
downloads, can give important information. The correlation between
downloads and leads, can serve as a KPI.
Sales Metrics
 Total Revenue
 Average Revenue Per Product or Customer or User (ARPP or ARPU)
=Total Revenue/(No. of Products or No. of Customers or Users
 Total Addressable Market (TAM)
= ARPC * total potential customers in market
 Market Penetration
= Total Revenue / TAM
 Percentage of Revenue from New vs. Existing Customers
=New or Existing Customer Revenue / Total revenue
 Year-Over-Year (YoY) Growth
=(Current Year’s Metric – Previous Year’s Metric) / Previous Year’s Metric *100
 Lifetime Value (LTV) of a Customer
= Average Contract Value * Retention Period
 Sales Expense Ratio
= (Operating Expenses / Net Sales) *100

Read More: https://people.ai/blog/sales-productivity-metrics/

HR Metrics
 Cost per hire (total cost of hiring/the number of new hires)

 Early turnover (percentage of recruits leaving in the first year)

 Time since last promotion (avg time in months since last promotion in the organization)

 Revenue per employee (revenue/total number of employees)

 Turnover/ Attrition (number of leavers/total employees in the organization)

 Absenteeism (absence percentage)

 Employee Satisfaction

 Employee Performance

 Training Expenses per Employee

 Training Effectiveness

Read More: https://www.aihr.com/blog/14-hr-metrics-examples/

 Financial Metrics
 Gross Profit Margin

 signifies the percent of total sales revenue that you keep after accounting for all direct
costs associated with producing your goods (Revenue – Cost of goods sold)

 indicator of production efficiency

 Net profit margin

 measures your profit after subtracting all operating expenses, depreciation, interest
and taxes (Gross Profit-Expenses)

 measures how well your company does at turning revenue into profits.

 Operating expense ratio (OER)

 shows the operational efficiency of your company by comparing operating expenses

(the cost associated with running your core operations) to your total revenue.

Read More: https://www.datapine.com/kpi-examples-and-templates/finance

Social Media Metrics

Awareness Metrics

 Reach (the number of people who see your content)

 What percentage of your reach is made up of followers vs. non-followers.

 Impressions indicates the number of times people saw your content

 An especially high level of impressions compared to reach means people are

looking at a post multiple times.

 Audience growth rate

 = Net New Followers (over a reporting period) / Total Audience *100

Social Media Metrics
Engagement Metrics (how much people interact with your content, as opposed to
just seeing it)

 Average Engagement Rate (number of engagements i.e. reactions, comments

and shares, your content gets as a percentage of your audience)

= Total Likes, Comments, Shares / Total Followers *100

 Amplification Rate (ratio of shares per post to the number of overall followers)

 = Total Post Shares / total Followers *100

 Virality Rate (measures how your content is spreading exponentially)

 = No. of Shares / No. of Impressions *100

Social Media Metrics
ROI Metrics
 Click-through rate, or CTR, (how often people click a link in your post to access
additional content; good indicator of how well your social content promotes
your offering)
= Total Clicks / Total impressions *100
 Conversion rate (measures how often your social content starts the process to a
conversion event like a subscription, download, or sale)
= Conversions / Total Clicks *100
 Cost-per-click, or CPC (amount you pay per individual click on a social
advertisement)
= Total Cost of Advertisement / Total Clicks *100
 Cost per thousand impressions, or CPM (cost you pay for every thousand
impressions of your social media ad)
= Total Cost of Advertisement / Total Ad impressions *1000

Read More: https://blog.hootsuite.com/social-media-metrics/

dashboards
Dashboard?

A dashboard is a consolidated, visual display of most

important indicators, updated as frequently as possible

and working in concert to improve the quality of

decisions relating to specific objectives.

Dashboard?

 Consolidated — Dashboards should be designed to fit a single page. The

fewer metrics on the dashboard, the better.
 Most important indicators — If an indicator does not directly support
decisions that impact the strategic goals of the organization, it should not
be on the dashboard.
 Updated as frequently as possible — Dashboards require the right
information at the right time. The sooner information can populate a
dashboard, the better. The best default is real time.
 Working in concert — Metrics do not live in isolation on a dashboard; they
work together to allow viewers to quickly identify how activity in one
segment of the business impacts outcomes in another segment.
 Specified objectives — Dashboards are about focusing the viewer’s
attention to make a decision. Every dashboard should be designed with
specific decisions in mind.
Dashboard Example
Types of Dashboards

 Strategic Dashboards
 Tactical Dashboards
 Operational Dashboards
 Analytical Dashboards
Strategic Dashboards

 Display the most high-level summary data and are focused on monitoring
an organization’s progress to achieving strategic goals and identifying
potential threats.

 These dashboards need updating less frequently than other types of

dashboards.
 Tactical Dashboards
 Tend to be used by middle management and are focused on
managing people and projects.

 Meant to manage the tactics an organization has chosen to achieve

its strategy and help identify potential opportunities to better do so.

 Usually contain comparative metrics that allow viewers to understand

what/who is driving success or failure.

 For example, while a strategic dashboard might contain a metric of

revenue to date, a tactical dashboard might contain revenue by
geography or by sales unit to date.
Operational Dashboards
 Allow front-line workers to monitor and manage the day-to-day
activities of an organization

 Tend to be transactional in nature—

 For example, the number of cars painted, the number of service requests
received, etc.

 Refreshed more frequently than strategic or tactical dashboards

 Designed to monitor several processes at once to keep operations

moving as efficiently as possible
Analytical Dashboards

 Used for exploration of data

 Less structured than the other types of dashboards

 Enable analysts to discover the underlying cause of an issue

 Since analytical dashboards are for exploration and discovery, real-time

updates are not a requirement.

 However, as issues are identified on other dashboards these dashboards must

be updated with at least the same frequency