Defining your KPIs
– We talked earlier on key performance indicators, or KPIs, but I think it’s important to take a minute and go deeper, especially as you evaluate your strategy around online analytics.Your analytics will have all the information of what’s going on across your marketing channels, but your KPIs refine that information to give you a clear view of how you’re performing. The KPIs will help tell the story of how your online marketing is doing at a glance. If you don’t have them, you’ll be overwhelmed with the amount of data available to you. By monitoring your KPIs, you’ll see what’s working, what’s not, and what is impacting something else.
When you go about creating your KPIs, make sure they are aligned to your business goals.They need to be measurable and easy to understand. So, a good KPI might be increase traffic 5% month over month, whereas a bad KPI would be increase traffic each month. If you don’t have a quantifiable goal, it’s not easy to interpret the results. Sure, you might be satisfied with growing traffic, but if you’re only growing by a few visits per month, you’ve got a problem, and that problem wouldn’t be visible if your KPI got a checkmark because it was simply to increase traffic.
You want your KPIs to be tied to your marketing objectives because, then, they’re influenced by your effort. They’ll let you know when to celebrate and when to make something better. So, for example, if you’re running an advertisement as a test to see if you can get acquisition costs at an acceptable level, you might want a KPI that says achieve a $40 CPA. If you went with achieve 100 sales, you’ll be focusing on measuring somethingyou’re not actually trying to achieve. You could succeed at that $40 CPA and then scale your KPI to be generate 100 sales per month at a $40 cost per acquisition.
To help get you started, here are some items to consider creating a KPI around. For online sales, look at your conversion rate and the cost per acquisition. For broader marketing objectives, set a KPI for total revenue and even the ratio of new to returning visitors. If you’re using a landing page, set a bounce-rate KPI. This way, you can identify if your inbound traffic isn’t targeted enough. As you consider your KPIs, do yourself a favor and avoid worrying about things that aren’t impacting your bottom line.
Page views might be impressive, but only if they’re actually driving revenue. I track business and marketing KPIs with an Excel spreadsheet, but you can also look at software from geckoboard.com or cyfe.com to build out KPI dashboards that give you at a glance information. Take your time and pick the metrics that are relevant to you, and then organize them in way that makes sense for your business.