Measurements matter – especially right now. But they aren’t all equally important, and knowing the relationships between types of metrics can help entities more successfully weather this storm.
Metrics are quantifiable measures that monitor performance or progress toward a goal or objective. But not all metrics are equally important. Today, we’d like to remind readers of the relationship between key performance indicators (KPIs) and diagnostic metrics.
We get the appeal of hot jargon, but not every metric is a key performance indicator, folks.
Times are tough for cultural organizations right now, to say the least. We’re in the midst of a global pandemic, an uprising against racial injustice (a good thing, but also one that’s contributing to making people warier of big cities where many cultural institutions reside), and an economic recession. One industry study warns that one-third of museums in the US may not survive the year. So how can entities increase their odds of being one that does?
Focus on what matters most for the organization’s survival.
Data and understanding audiences play a critical role in this. Data-literate entities may be better able to create and maintain effective communications, programs, and opportunities. After all, if people aren’t engaging with our content, then there’s nobody from whom to garner support.
Let’s get our data literacy on track. The survival of many of our most beloved cultural institutions may depend upon it.
What are key performance indicators (KPIs) for cultural organizations?
KPIs are measurements that show progress toward business- or mission-based goals. They provide critical checkpoints on the route to reaching desired objectives.
“Isn’t that all metrics?” No. It sure isn’t.
Key performance indicators are a special subgroup of metrics that correlate directly to the “health” of an organization and its ability to achieve its bottom-line objectives. Examples of perhaps the most obvious KPIs for cultural organizations include attendance counts, annual giving totals, and how an organization is performing compared to market potential. (Here’s the current average market potential for both exhibit and performance-based institutions in the US through 2022.)
Other examples of KPIs include reputation, educational value, satisfaction, value-for-price perceptions, admiration quotient, and “best in class” perceptions. You can see these quantified for individual organizations here, here, and here, for example. These metrics have the highest direct correlation with success in achieving desired behaviors such as a visit, membership renewal, or mission-based action.
Attitude affinity – how welcome people feel attending an organization – is also a key performance indicator. The United States is increasingly diverse, attendance isn’t keeping pace with population growth, and entities are not engaging racially diverse audiences at representative rates. Being aware of how much people believe than an entity is “for people like me” matters in changing up the profile of our historic visitors over time.
Key performance indicators can be frustrating for some organizations, because many indicators tend to rely on market research in addition to audience research. Cultural organizations have gotten pretty good at audience research, but asking people who already follow you on social media or who have already visited will not provide an accurate reading on how welcome people feel. After all, these are the people who like you enough to engage with you! A goal is to understand the people who don’t, and that’s where market research comes in.
Organizations have reputations beyond the people who visit them. Surveying only those whom we know have already engaged with us artificially inflates values. This is a popular tactic for making the case for grant funding to foundations (hey, let’s show them what makes us look best!), but it doesn’t help entities reach their longer-term goals of also engaging new audiences or fully understanding opportunities.
What are diagnostic metrics for cultural organizations?
Most metrics are diagnostic metrics, not KPIs. Diagnostic metrics are data points that contribute to reaching KPIs and aid organizations in pinpointing opportunities. However, these metrics cannot stand in for KPIs because they are not as closely related to desired outcomes.
Instead, diagnostic metrics can help make sure that things are on track. They often support KPIs, but they are not the KPIs themselves. These include metrics like safety perceptions of the surrounding area, length of stay, social media likes and shares, and the number of people who interact with an exhibit, for instance.
Diagnostic metrics are like your organization’s blood pressure. Just because your blood pressure is normal doesn’t necessarily mean you’re healthy in other ways. And just because your blood pressure is slightly high doesn’t mean that you’ll have a heart attack tomorrow. Instead, it’s a metric to watch to indicate overall health and provide clues for treatment.
Diagnostic metrics also aid in listening to current audiences and can inform organizations of opportunities for improvement. For instance, we published national intentions to visit cultural organizations during the first 20 weeks of the pandemic to understand when people plan to return to normal visitation behaviors. Intent to visit is a diagnostic metric informing a critical KPI: market potential.
To succeed, organizations benefit by having both key performance indicators and diagnostic metrics. However, it’s critical that entities understand the differences between them, as they are not equally important for the same reasons. KPIs directly relate to your goals, while diagnostic metrics often directly relate to KPIs.
What about vanity metrics?
Oh, vanity metrics… How you contribute to leadership perception trickery!
While arguably all knowledge is good knowledge, some metrics aren’t necessarily directly related to fulfilling any goals at all. Worse yet, they can contribute to data fatigue that makes it harder for entities to succeed!
Some metrics are vanity metrics. Vanity metrics may make your organization appear successful to others (often, to board members), but do not actually shine a light on performance to inform future strategies. Frustratingly for cultural entities aiming to be more technologically savvy, many vanity metrics are digital. These can include social media follower counts, page views to your website, and the number of email subscribers, for instance. This doesn’t mean that having big numbers in these areas is bad! But having big numbers on these also doesn’t mean an organization is necessarily reaching its goals.
A social media page could have a dramatic increase in follower numbers after posting a video of Taylor Swift on a rocket ship dancing with Cookie Monster to Queen’s “We Will Rock You,” for instance. However, this follower number increase likely doesn’t have much to do with connecting people to a cultural organization’s mission or increasing visitation (unless perhaps it’s to the Taylor Swift Rocket Ship Museum). These new followers are not necessarily a “captive” audience, as some leaders who are less familiar with social media might think. If your organization cannot keep its new followers engaged, they’re unlikely to see future posts. Instead, a goal of social media is to cultivate a group of people who will actively engage with your organization and its mission, and carry out desired behaviors.
Not all vanity metrics are digital, either. The number of staff members speaking at conferences is a vanity metric and doesn’t necessarily correlate with an organization’s performance in the areas in which professionals are speaking. This number just looks good to some unsuspecting board members.
These numbers aren’t always worthless, though. For instance, many institutions are boasting increased digital engagement with audiences during the pandemic, and these numbers may be communicated to leaders in order to make the case for additional investments in digital engagement in a changing world. That’s a good thing! But an increase in these numbers right now doesn’t mean that an organization is necessarily good at social media! It’s a pandemic. People are spending more time online than ever before. For smart organizations, these numbers should have increased. That’s not necessarily a high-five entirely to the organization! It would be alarming if numbers stayed the same while even more people are online – especially for entities that were actively increasing their volume of content.
The biggest danger with vanity metrics is that they can unknowingly bamboozle leadership and desensitize them to other metrics that are actually meaningful – or more reliably and directly relate to achieving important goals. They can be feel-good pats on the back that direct attention away from key performance indicators… and organizational success.
Why does understanding the difference between these metrics matter so much in a pandemic-impacted world?
There are several items of high consequence on leaders’ and board members’ plates right now. Many organizations are trying their best to stay afloat, not lay off any more staff than necessary, and evolve their operations and programs in meaningful ways. But leaders cannot do everything that crosses their minds. Stakes are high and revenue is much scarcer than usual. Leaders benefit by making their decisions count.
Not only is being a data-informed organization critical for success today, but it will also be critical long into the future. To that end, we have some pointers for being a data-informed cultural entity and have outlined the basics of data collection, data interpretation, data acceptance, and data integration. We hope that these articles may be helpful to you in this time as entities shift their cultures and mindsets in an effort to get through current conditions.
Cultural organizations don’t have resources to waste. Not right now.
Metrics can help organizations understand their superpowers and their audiences. They can inform strategic frameworks that are most likely to succeed. But not every measurement matters – at least not equally.
By understanding the role and classification of metrics, entities may be better able to drown out the noisy numbers and focus on those that are most important for success.
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