Key Performance Indicators (KPI”s) are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization. They are the key metrics that help you understand how you are doing against objectives. KPI’s serve as an actionable scorecard to keep your strategy on track.
Since a video is worth a 1000+ words, here’s Erica Olsen of MyStrategicPlan.com to explain KPI’s.
To cite examples, here are 6 Key Performance Indicators from 5 industries.
E-COMMERCE (from Avinash Kaushik, Google Analyst and Co-Founder, Market Motive)
- CONVERSION RATE: Focuses on outcomes and force the conversation about objectives
- AVERAGE ORDER VALUE: A lot of effort spent in the area of onsite merchandising (working on cross-sells and up-sells and what not). Awesomeness of all that work can be detected in by measuring AOV
- DAYS AND VISIT TO PURCHASE: Measure the true customer behavior on your website, how long it takes someone to complete an Outcome on your website; deeply insightful in terms of perfecting the marketing messaging on your website
- VISITOR LOYALTY AND VISITOR RECENCY: Allow you to measure if people visit your site repeatedly AND if they do it more frequently
- TASK COMPLETION RATE: Only 2% of your website visitors (for most websites) will ever convert on your website. How do you know why the other 98% visited your site and find ways in which your site is letting them down
- SHARE OR SEARCH: Gives you external validation of your success (or lack thereof); stops you from being blind sided
SOCIAL MEDIA (from Aaron Aders, Co-Founder DigitalRelevance)
- FOLLOWER GROWTH: Means growing your brand’s reach on social networks
- LINK CLICK-THROUGH: is a free and easy way to gauge the effectiveness of your brand messaging. If no one clicks your links, you probably aren’t presenting relevant and valuable information (or your follower base is not the right audience)
- SHARES: Content that gets shared by your audience is one of the fastest ways to grow relevant follower bases on social networks
- REFERRAL TRAFFIC: Use this data to optimize your website and social network messaging to make the most out of this traffic
- PUBLISHING VOLUME: Measuring your publishing volume and examining that data is crucial to tie together with all of the KPIs above and to normalize the trends and account for days missed
- FORECAST YOUR KPI’S AND EXECUTE: Use past performance as future indicators, but be sure to shoot for growth. Be conservative and start slow. Don’t assume you’ll be able to double your numbers each month. Growth takes time, but with diligence it can be done
B2B (from Bridget McCrea, Journalist who covers business and technology)
- TOTAL COST SAVINGS: Is the total amount of money saved by reducing the total cost of ownership year-over-year. It’s a key reason that procurement departments exist
- QUALITY OF PRODUCTS AND/OR SERVICES: Metrics like “defects per million,” for example, can be used to track supplier quality and, in turn, make improved sourcing decisions
- ON TIME DELIVERY: Quickly detect whether a supplier is living up to expectations in the area of delivery—or not
- INVENTORY AVAILABILITY: Allows buyers to keep close tabs on whether inventory is in the right place, at the right time, and in the proper form. Ignore this measure and you’ll constantly have to ‘rush’ freight in—an expensive proposition—to fill in the gaps
- CONTRACT COMPLIANCE: Allows buyers to capture baseline information regarding service level agreements (SLAs), negotiated prices, and other important measures
CONTENT MARKETING (from Neil Bhapkar, Director of Marketing, Uberflip)
- UNIQUE VISITS: Are the most standard measure of how many individuals have viewed your content within a given time frame (typically a 30-day cookie window)
- GEOGRAPHY: Is important in order to understand where to allocate more budget and resources based on where your audience is
- MOBILE READERSHIP: Understanding trends in how your content is being delivered to different devices is key to determining how to optimize your content and its design (i.e., responsive design) for future publications
- BOUNCE RATE: Is to not lose your reader because you didn’t deliver on their expectation of what they were clicking on
- CLICK PATTERNS: Is critical to understanding what is relevant to your audience
- PAGE VIEWS: Is a good measure of how far along in a publication they may have gotten. They help you understand how to develop future content for your audience
SEARCH ENGINE OPTIMIZATION (SEO) (from Klipfolio – KPI Dashboard – Evolved)
- RETURN ON INVESTMENT: Is the tangible results from your investment into SEO. high site traffic for a keyword may introduce your brand to potential customers, but they might not take a desired action on their first visit to your site
- KEYWORD RANKING: Is definitely one of the most important SEO KPIs for search marketers to monitor. It’s common knowledge that the difference in click-through rates for a rank 1 keyword versus even a rank 2 keyword is significant
- HIGHEST RANKING URL: Is to ensure that the right URL is also the highest ranked. Your objective is to increase leads, sales, or awareness – not just to get to #1
- CLICK-THROUGH RATE: demonstrates the effectiveness of your SEO campaign to turn keyword rankings into real results for your website
- GOAL CONVERSION RATE: This can be filling out a lead form, making a donation to your charity, signing up to your newsletter, or purchasing a product. Don’t kid yourself – search marketing isn’t just about ranking high, it’s about completing goals.
- BACKLINKS: are an important part of running a successful SEO campaign because they provide Google with an indicator of your domain’s authority
Whether your industry was or wasn’t addressed in these examples, the point is to prove you don’t need a lot of KPI’s to give a complete picture but you do need to monitor continuously and take action on them. A key task is to make sure there is consensus within on the organization on the business objective.
Do these examples explain KPI’s to you? Do you see your business in the KPI’s of the industries cited? Are you looking for help in getting started with a KPI scorecard for your brand?