Trying to understand what Key Performance Indicators (KPIs) are?
Wondering how to determine the best ones for your business?
One of the most important things to do when implementing digital marketing strategies for your business is to identify your key performance indicators (KPIs).
Why Use KPI's?
Determining KPIs will allow digital marketers to measure the success of your campaigns and tweak your strategy accordingly. Unfortunately, it can be difficult to determine when and if a KPI is right for your business if you’re new to digital marketing.
Don’t worry, we’re here to help. So let’s jump right into discovering and determining the right KPIs for your business!
Key Performance Indicators (KPIs) Defined
Key performance indicators, or KPIs, are metrics that you can use to measure the success of your marketing efforts and to see how your campaigns are doing.
Monitoring these KPIs can allow you to get a clearer image of your marketing progress online. They can help you determine if you’re on the right track when implementing SEO tactics and using PPC marketing. If something is wrong, KPIs can serve as a system to show you early on if anything needs tweaking or if marketing expectations aren’t going to be met.
A great KPI won’t be a shallow metric but will correlate directly with business goals.
Instead of measuring the ranking for a certain keyword, for example, it’s better to use a KPI that takes things one steps further.
Usually, a great KPI will measure conversions of some kind. A KPI may track sales numbers, leads gained, return on investment (ROI), or something else.
Determining KPIs for SEO and Digital Marketing
When it comes to SEO and Google AdWords campaigns, a few KPIs are commonly used by businesses to determine the effectiveness of marketing efforts.
When determining your own KPIs, considering a few of these can be a good starting place for choosing your own. You don’t have to choose to use every one of these yourself, but you may want to consider using at least some of them when determining your KPIs.
Here are a few of the most common KPIs that are likely to be useful for measuring the effectiveness of your PPC and SEO strategies.
- Leads Acquired
- Clickthrough Rate (CTR)
- Conversion Rates
- Cost Per Acquisition
- Site Score
Most KPIs will fall under several categories: awareness, engagement, or conversion. Each of the KPIs above can be useful but the ones you choose as your “key” indicators will vary depending on what your business model is and what goals you’re trying to accomplish with your business.
Things to Think About When Choosing KPIs
When determining your KPIs, there are a few main things you’ll want to consider. Remember, some KPIs can give you valuable insights into the effectiveness of your online marketing efforts, while others may be misleading or unhelpful.
Here’s what you should consider when determining KPIs for your business.
1. Make Sure KPIs Align With Your Business Goals
The first thing you should look for in a great KPI is whether it aligns with the overall goals of your business. It should also be quantifiable. For many businesses, a KPI may be tracking sales or leads.
On the other hand, the number of social media followers you have or the amount of traffic to your website may not serve as good KPIs. More social media followers, for example, doesn’t necessarily lead to meeting business goals or increasing revenue.
2. Avoid Vanity Metrics
When choosing KPIs for your business it can be easy to fall into the trap of using vanity metrics. Instead, it’s better to focus on actionable KPIs that show a person is making a real commitment to your business.
Getting a lot of page views on your website may feel good, but if those visitors aren’t eventually turning into customers or leads then it’s not helping move your business forward. A KPI such as page views may not be a great indicator of the effectiveness of your PPC or SEO campaign.
3. Choose a KPI You Can Impact
It’s also important that you choose a metric that you actually have some control over. Ask yourself whether you can actually do anything that will impact the metric you’re considering using or not.
KPIs should not only be measurable but should be something that you can quantifiably influence by tweaking your PPC and SEO campaigns.
4. Use Selective Focus
It’s also important that you choose your KPIs carefully and don’t bite off more than you can chew. Instead of picking a whole range of data points that you try to track all at once, you should choose just several key metrics that you’ll pay attention to and try to influence with your marketing campaigns.
Remember that you’re looking for several “key” performance indicators to track, not every indicator that there is.
5. Keep Your Stage of Growth in Mind
When choosing Key Performance Indicators, you should also keep your business’ stage of growth in mind. A startup will likely want to measure different KPIs than a more established business will.
While many established businesses will probably want to keep their focus on sales or leads gained, a startup may have goals that relate more towards building awareness and engagement. Their KPIs should reflect that as well.
6. Remember That Every Business is Different
It’s important that you remember that every business is different. As a result, every business will have different KPIs. Your business model or industry will affect which Key Performance Indicators you choose.
A business with a subscription model, for example, will have different needs than a traditional e-commerce store. Be sure that you aren’t choosing your KPIs based on what a different type of business is doing, but that you’re choosing the KPIs that are perfect for your unique goals.
It's Time to Determine Your Business KPIs
If you’re trying to determine the KPIs to use for your business marketing plan, make sure that you take your time to get it right. Choosing the right KPIs can help you get the most out of your digital marketing efforts and can help you achieve the results that are most important for your business growth.
Looking for help with your digital marketing strategy? Contact us today to learn more about what we can do for you.