There are few challenges for any business, large or small, as difficult as setting their key performance indicators (KPIs). I get it, it’s not that business owners don’t understand what or how to set their KPI’s, but more about the choices they make.
More often than not, they choose KPIs that are either incompatible or are simply too extensive to properly manage. Ultimately, KPIs are supposed to help solve a problem you have noticed on your site or in the way you are doing business.
Choosing the correct KPIs is key to better understanding your business and what you can control and measure. When KPIs are used properly they are clear steps that eliminate the guesswork of any action and goal setting you have created.
Your KPIs, then, support your goals – no, they aren’t your goals, but they’re intricately entwined with them. They are ultimately a way to measure how successful your efforts and strategies worked in the last six months or quarter, etc. They will become a roadmap to your success.
Do Your Homework Before Choosing Your KPIs
Before you start defining KPIs, you need to figure out what it is you are measuring. That means asking the hard questions, like:
- What data is important to support your goals?
- Which metrics should you use?
- What are you going to do with all this data?
I’m sure most of you know the standard business funnel is Awareness, Acquisition, Engagement, Conversion and Retention. Those are the nuts and bolts that can drive what you measure and how you measure them.
Now comes the tough part – I say tough because a lot of companies use weak indicators as part of their goals. For example some companies want a lot of Likes… sure, that’s nice, but ultimately, unless you are converting, communicating or building a community, that’s all they are – just numbers.
Therefore, lets focus and ask the tougher questions. “What do I expect to happen from this activity?” Simply put, what’s the desired result. Are you looking for more traffic, more readers, to build authority, strengthen your brand? Depending on the goals defined, you could leverage your efforts by three potential conversions on your site:
- Download a free report after filling out a short form
- Fill out a short form to request more information
- Buy a product
Another great KPI is to include is the number of clicks, on average, that it takes a customer to make a purchase. A high number might indicate the site is confusing and you should consider simplifying it so customers can find what they need more easily.
Goals with KPIs Must Be Controllable
The thing about the best KPIs is that they’re controllable — you can, theoretically, affect and adjust how much time someone spends on your website, how many people visit, what are they downloading or not and so forth. The goals these KPIs support have to allow you the same amount of control.
For example, if you have a call center, you may want to control where the calls are coming from by assigning various 800 numbers on different networks. Then you won’t have to depend on your call center to include “Where did you see our ad?” It will be clear they called from 800-Facebook, etc. Or they called from 800-your company name on Google+.
Using KPIs for Engagement
Another use is with your social engagement. What does that mean, exactly? One example would be a click through to your website. Did they watch a Youtube video? Have they commented on your blog? Are they asking questions on Twitter? Are they clicking through the pages of your website? Those are great, trackable KPIs that can grow your interactions and engagements.
Therefore, in order to implement interactions and conversion, we would use the following set up:
KPI Segment 1: Interaction/Engagement
- Have they used a search function?
- Are they clicking on your downloadable e-Book?
- Are they clicking on your sitemap?
- Are they looking at your Social Networks and clicking on Google+, Linkedin, Facebook, Twitter?
KPI Segment 2: Conversion
- Have they clicked on the contact us links?
- Are they calling your number and talking to your customer service?
- Did they order a product?
Keep in mind the ultimate goal of any KPI is to show you the areas that need improvement. Your job is to set those funnels, test, rinse (making adjustments along the way) and repeat, until your goal is achieved.
Make sure you set benchmarks — this will give you a point of reference against your numbers when you first started measuring your specific target. Where are you today and where do you intend to be 30 days from now.
Setting your KPIs can be a significant challenge to your business, but when used to drive your online marketing campaigns, they’ll be more than worth the growing pains.
If you want to learn and read more about KPIs, we wrote a great downloadable eBook – Measuring Metrics Walkthrough | KPIs, Benchmarks and Analytics. Help yourself, we don’t bite!