Home > KPIs, SEM > Choosing and defining your Key Performance Indicator’s (KPIs)

Choosing and defining your Key Performance Indicator’s (KPIs)

The end actions that you use to measure the success are called Key Performance Indicators (KPIs.) KPIs are subjective and vary from business to business; however, the best KPIs are used to help your business define and measure progress toward your goals. In order to define success you need to not only know what to measure and how to measure it, but also what the data means.

 KPIs change from industry to industry and business to business, so it’s not surprising that the various departments/divisions within a business can view different KPIs as being the most important to them. It is important to make sure that if different divisions or department use their own KPIs to measure success and that their KPIs tie to the main overarching strategic goal of your company. Here are some examples of categories of KPIs for an online marketing campaign:

  1. Financial KPIs measure a website’s profitability, including revenue & growth over time, operating profit, margins, ROI, ROAS, as well as other financial indicators.
  2. Marketing KPIs measure the effectiveness of marketing campaigns. I.E. SEO, SEM, PI, online banner campaigns, e-mails/newsletters, affiliate marketing campaigns as well as other traffic sources.  
  3. Conversion KPIs measure a website’s ability to convert visitors into customers/leads, as well as the various types of conversion on the website.
  4. Engagement KPIs measure a website’s ability for visitor retention, interest in content on site, and the ability to make visitors perform certain actions.
  5. Loyalty KPIs measure the website’s ability to make visitors come back often, time spent on site, ratio of new to repeat users, as well as other visitor related metrics.
  6. Usability KPIs measure the effectiveness and ease of use of your website.

 You should have noticed one key trend in the list above, all of the KPIs discuss measurement. In order for a KPI to be effective you have to be able to track it, bench mark it, and measure progress. I am a strong believer in data driven marketing decisions—and KPIs are all about the data.

 An effective KPI will:

  1. Reflect your businesses goals.
  2. Be quantitative and measurable.
  3. Be a key factor for the success of your company.

 If I can impress one key thing on you before you start any marketing campaign it would be this, “Know and understand what your goals (and your KPIs) are before you start your marketing campaign.” This seems simple and easy, but I can’t tell you the number of times I’ve had discussions with potential clients who knew that they wanted to advertise but couldn’t explain the end action they expected from the marketing campaign. If you as the business owner (or marketing lead) can’t explain your goals, no marketer or agency will be able to succeed in making your business profitable.

 In this series I hope to help provide you with some tools to assess your existing situation and come up with actionable KPIs for your marketing campaigns.  Future articles will discuss KPIs in more depth and will contain more specific examples of Marketing KPIs based off of different types of websites.

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Categories: KPIs, SEM
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