In the alphabet soup of marketing and business, in general, the abundance of acronyms can be overwhelming at times. Never fear. If you’re still unsure of what KPI stands for, odds are you are already covering some of those bases. A Key Performance Indicator (KPI) is merely a measurable value that demonstrates how effectively you are achieving key objectives.
Establishing a way of measuring success is imperative to growing your business whether you have a brick and mortar store or are website based. Monitoring KPIs helps increase efficiency throughout your business and helps keep personal opinions in check if there are multiple stakeholders involved. KPIs provide an organization with clear goals and keeps everyone moving in the same direction.
Usually, an organization will define a set of KPIs that are quantifiable measures intended to evaluate progress over time. Deciding which metrics to use is not a simple task as there are numerous metrics that can be tracked, some soft, some hard. You can look at social shares, engagement, and email sign up numbers. You can set KPIs for sales, average order value, decreasing costs, and more.
The key (pun intended) is to monitor the metrics that inform your overall company strategy and help keep you growing and thriving. Let’s use the example of a website. If one of your objectives is to increase revenue, a related website goal might be to generate more leads. In this case, possible KPIs would be the number of visits to your contact page and the number of online forms submitted. To indicate success, you would want to see an increase in both metrics.
It is important to keep in mind, however, that metrics are sometimes imperfect. Someone may actually call you on the phone versus filling out a contact form. KPIs are, as the name implies, indicators of success, not absolutes. Do your best to have a variety of metrics that provide a sort of checks and balances. Establish a mixture of KPIs focused on conversion, engagement, and usability.
Conversion rates are usually the first thing that comes to mind when metrics conversations take place. Using our website example again, we, obviously, want users to take some type of action that creates a material benefit for our brand. We can establish KPIs for sales, e-book downloads, contact forms, and more. Whatever action we are persuading a user to take can and should be monitored, measured, analyzed and, when needed, responded to.
To track engagement, consider, first, your organizational goals dealing with marketing-oriented metrics like increasing brand awareness or expanding your market share. KPIs can monitor various interactions such as how often a user comments, likes or shares content. They can track users’ first impressions of your website or how long a user is paying attention to particular types of content.
Keeping with the website example, usability is pertinent to all aspects of an organization. If the user experience on your site is poor, all areas will feel the impact. Fortunately, there are a number of metrics you can use to track usability.
KPIs can be established for task success rates and error rates. Monitor how often are users completing tasks and how often are they making mistakes when trying to complete those tasks. Measure the time, on average, it takes a user to complete important activities on your website. Tracking these metrics and others over time will help you understand the overall usability of your website and exactly where improvements are needed.
I’ll say again that one of the things to keep in mind is that KPIs are indicators, not absolutes. Avoid setting targets for your KPIs, they are simply meant to tell you what is happening. Save the targets for your goals and objectives and utilize your KPIs as part of the larger body of information that informs the decision making within your organization.
When you first begin tracking KPIs, you’ll most likely find the big, obvious issues first and, just as quickly, fix those problems. Over time, the challenges become a bit more difficult to identify and the tweaks become more delicate. That, in and of itself, should be a positive thing for your team. The more difficult it gets to make improvements, the more fabulous your website or another part of your organization.
KPIs are a valuable part of every project and aspect of your business. Use them as a guide, an indicator of success. Let them inform your decision making and help you prioritize your actions as you work to grow your brand and your levels of success. To discuss which KPIs might help move the needle on your company’s success meter, contact the experts at Strategy Driven Marketing. We live to help clients grow their businesses and love to talk metrics, website, marketing, and more. Let’s connect!