What are Key Performance Indicators?

What are Key Performance Indicators? (KPIs)

Let’s turn our focus to identifying what factors will drive performance and thus deliver results for our strategy.

As mentioned in the introduction, this exercise is often overlooked in organizations. “Hurry up and get the website redesigned and launched” is what usually drives the digital marketing team. Being busy is not the same as being effective.

Let’s start with an understanding of what a Key Performance Indicator (KPI) is:

From an excellent blog post on Occam’s Razor by Google digital marketing evangelist Avinash Kaushik:

Definition: A key performance indicator (KPI) is a metric that helps you understand how you are doing against your objectives.

Pretty simple right?

We’ll dive into the specifics much more in depth when we get to the Measurement phase and go into web analytics. However, as it relates to strategy, KPI’s are what we plug in for the Measurable part of our SMART acronym, so it’s worth noting briefly here and giving a couple examples before we close out our strategy discussion.

For now, let’s take look at a high-level at our web consulting business. A couple KPIs might be:

• Conversion Rate – Looking at what percentage of visitors “convert” on our website. This might be something like filling out our contact form. Bonus points would be if they selected “custom app development” under the drop-down that says something like: what do you need help with? This would tell us we’re getting closer to attracting the right kind of sales lead in relation to the business objective. *Remember we said Custom App Development is the most profitable part of this business’s offerings.
• Visitor Loyalty – Here is where we would look at how often a visitor is coming back to our website over our specific time frame that we defined at the outset. The rate of which can vary based on industry or marketing pushes. For example, we might be driving traffic from our monthly email newsletter, social media, or organic search. Once we hook them in, the trick is to see if we can continue to get them to engage on an ongoing basis – monthly, quarterly, or even yearly. This is particularly helpful for measuring how we’re doing with the Spectators that we saw from the Social Technographics section. For a consulting business in the B2B realm, this is particularly important as most first-time visitors will not convert and it may take a longer time of repeat visitors to get them to either email or call. Knowing how often they check in is a huge clue on gauging interest and the quality of the experience we’re providing.
• Search – We would track our rankings in the Search Engine Results Pages (SERPs) for various keyword phrases over time, as well as that of our competitors. We could use a tool like Google Trends to see if “custom app development firms” is rising or falling. From ZMOT, we know this is the battleground for starting the conversation with customers. Having a broad scope of keywords around our business objective gives us the best shot of getting that 30% growth and aligns it with where the company is most profitable.

Again, we’ll be going into the specifics of how to plug all these tools into our marketing mix using a web analytics tool like Google Analytics. For now, focus on seeing how the KPIs relate back to our business objective.

Further reading: For great tips around KPIs, analytics, and all other web awesomeness – be sure to check out Occam’s Razor.