- What Is a KPI?
- What Are the Benefits of Setting KPIs?
- How to Set KPIs for Your Business’s Goals
- What Are the Most Common KPIs?
In order to assess the impact that your marketing efforts are having on your business, it helps to monitor KPIs. KPIs help you analyze whether you’re getting closer to your goals and can even help you measure the success of your entire company. Reviewing some of the most common KPIs that companies monitor can help you determine which you should be watching for your own organization.
What Is a KPI in Marketing?
A KPI, which stands for key performance indicator, is a measurement of performance for any activity that’s important for your business. You can use them to assess whether your business is successfully achieving its goals. KPIs can include metrics like the number of new customers you have each month or the number of new visitors to your company’s blog. They could also reflect your company’s customer service experience, operational efficiency, or product performance.
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What Are the Benefits of Setting KPIs?
Monitoring KPIs helps you improve the performance of your business by:
- Defining success – By setting KPIs, you can specify what success will be for different parts of your business and how you’ll measure it.
- Focusing the team – By sharing your company’s KPIs with the whole team, everyone will know what you’re working toward. This allows everyone to pursue the same goals and keep in mind what matters most.
- Tracking results – By setting clear KPIs, you can track your progress and assess how close you are to meeting your goals.
How to Set KPIs for Your Business’s Goals
To make the most of your available resources and have the greatest impact on your business, you need to focus on the right KPIs. Here are the steps you can take to set KPIs for your business:
- Establish your ultimate goal. Start by deciding what you ultimately want to accomplish.
- Identify the data you have. Next, determine whether any other departments are gathering relevant information.
- Collect additional information. Gather information on competitors, demographics, and industry trends, and use this information to guide your decision about which metrics you should be monitoring. Spend some time determining which metrics will have the most significant impact on your company.
- Determine how frequently you’ll measure the KPIs. Next, set intervals for how often you’ll check the metrics to measure your KPIs.
- Set long- and short-term goals. Set long-term and short-term goals for the KPI you’re measuring. For example, if you want to reach a certain amount in sales within six months, you can break that amount down to figure out how much you need to sell each month to hit the larger goal.
- Share KPIs with key stakeholders. Be transparent with key stakeholders when discussing your organization’s performance. Communicate about the strategies you’re using, the progress you’re making, and the outcomes so far.
What Are the Most Common KPIs?
Here are some of the most common KPIs that companies monitor:
Conversion rates tell you what percentage of people on your website took a specific action, such as buying a product or subscribing to a newsletter. You could evaluate the conversion rate for a landing page, specific campaigns, your social media channel, or based on particular keywords.
Traffic is another KPI that’s important to monitor since more traffic generally means more leads and sales for your business. You can break down traffic and monitor it in a variety of different ways. For example, you could monitor your organic traffic, your paid traffic, your referral traffic, or the number of page views.
Bounce rate refers to the percentage of website visitors who immediately leave your website after taking any action. This is often an indication that people are mistakenly landing on your website and that it doesn’t have what they’re looking for. A high bounce rate can indicate that you need to make changes with your targeting strategy.
New vs. Returning Website Visitors
Evaluating your new website visitors compared to returning visitors can help you understand whether a marketing campaign is successful or whether your products and services are enticing repeat buyers. This metric can tell you several different things depending on your goals, so it’s a good KPI to monitor.
Email Open Rate
If you send a regular newsletter, you should consider monitoring your open rate. If your open rate is low, it can tell you that you might want to modify the frequency with which you send your emails or perhaps try using more compelling subject lines.
Social Media Metrics
If social media is a big source of traffic for your business, then you may want to consider monitoring the number of followers you have on each of your social media channels. You could also use the analytics within each social network to monitor the number of people you reach with your content or the percentage of your followers who are engaging with it.
Number of Backlinks
If you’re trying to increase your search engine ranking, then you should monitor the number of backlinks to your site because they impact your website’s domain authority. Tracking the number of backlinks is a great way to know if your team’s SEO efforts are paying off.
Search Engine Ranking
If you get a lot of traffic organically or are trying to improve the amount of organic traffic that your website gets, then you should consider monitoring your position in the search engine results pages (SERPs) for specific keywords. By frequently evaluating your position in the SERPs, you can get a better picture of how your website performs from an SEO perspective.
Paid Advertising Metrics
If you’re doing paid advertising to drive traffic to your website, then there are several metrics that you should consider monitoring, including cost per click, cost per thousand impressions (CPM), and click-through rate.
These are just a few of the possible KPIs you could monitor for your business. Ultimately, you want to select KPIs that help you determine whether you’re getting closer to your long-term goals. If you need help with your marketing and want to hire someone with a proven track record, browse the portfolios of the pros at Consultdex.