A goal without a plan is just a wish. When it comes to the growth of your business online, the routine is relatively straightforward. Measure. Gain insight. Take action. And repeat. But what should you measure?
Key Performance Indicators (KPIs) are about choosing the right metrics of your plan that help you understand how business objectives and goals are performing through the use of quantifiable, outcome-based measurements. Communicreations views KPIs as a core strategy deliverable for our fractional CMO solutions. By choosing the right KPIs, you are arming yourself with actionable insights into your business and your customers, enabling you to make informed and strategic decisions.
The absence of KPIs make it difficult to gauge progress over time. If you ever read or saw the movie Moneyball, the premise is about using metrics and analytics to win. It captures the essence of performance-based culture – create a winning strategy then select the appropriate KPIs to measure and drive performance.
Why do KPIs matter for your business?
Choosing the right KPIs are about achieving the strategic goals for your business. They reveal a variety of insights. For example:
- Performance. With so many critical factors to track across your business operations, financial, sales and marketing, KPI’s can be efficient game changers.
- Measure Progress. By their very definition, KPI’s allow you to measure progress towards business objectives.
- Patterns. Trends can be illuminated that can inform decision-making.
- Problem solving. Issues that might go otherwise undetected are identified and targeted while removing guesswork around the nature of the problem.
Choosing the right KPIs that are directly related to your business goals
If business objectives are not clearly defined, the value of your information will be poor. To get to the point, ask yourself the question “I want visitors to come to my website and _________.”
Understanding this will help to establish aspirational goals in order to proceed. Goals fall under three categories: Outcome Goals, Process Goals and Performance Goals. These can be further broken down to macro goals (ie. book service appointment, sales enquiry, subscribe) and those little micro goals that get you there (ie. button click, form completion).
The SMART model can help you establish goals that matter to your business.
- Specific. What would you like to accomplish? Quantifiable business objectives for your website. Such as increasing the number of qualified leads, improving the sales conversion rate, or tracking customer satisfaction.
- Measurable. Tracking qualified leads through your CRM, conversion rates found in Google Analytics, customer surveys.
- Attainable. Are the goals realistic? Aiming too high or too low are virtually meaningless results.
- Relevant. Does the goal reflect your business needs? Is it aligned with objectives?
- Timely. Establishing a timeframe for goals is an important factor as it gives you a clear target.
Every KPI is a metric, but not every metric can be used as a KPI. A metric in this case can be a number (ie. visits, pageviews, conversions) or a ratio (ie. bounce rate, conversion rate, customer lifetime value).
Google Analytics KPIs
KPIs generally fall into five business categories:
- Customer Service
- Project Management
There is an exhaustive list of potential KPIs to measure your success, so choosing the right KPIs comes down to your unique requirements of your business. There is not what you’d call a standard set. That said, here is a list of some of the more important website measurements for consideration:
- Sessions and Users.
- New and Returning Visitors.
- Bounce Rate.
- Goal Conversion Rate (Marketing).
- Number of Qualified Leads (Marketing). Typically tracked using “Thank You” page URL after visitors complete a form on your site.
- Time on Page.
- Average Page Load Time.
- Bounce Rate by Browser.
- Organic vs. Paid Sessions.
- Average Session Duration.
- Pages per Session.
- Customer satisfaction. This may include site performance metrics such as page speed…
15 KPI Categories
Courtesy of Hubspot, here are 15 KPIs you can track that would help you track and grow your marketing success:
- Customer Acquisition Cost (CAC). The amount of money it takes to convert a potential lead into a customer.
- Lifetime Value of a Customer (LTV). Having a number for the lifetime value of a customer can provide a benchmark for marketing spend.
- Return on Investment (ROI). The amount of income you gain versus marketing costs.
- Return on Ad Spend (ROAS). Tracking the success of ad campaigns.
- Marketing Qualified Leads (MQL). Leads that have engaged with your company and have shown an interest in doing business.
- Sales Qualified Leads (SQL). MQL’s nurtured correctly then become SQL’s.
- Follower Growth. Growth of social media followers.
- Conversion Rate. Percentage of visitors who complete a desired action, such as completing an online form. POWER TIP: Use of thank you pages is a best practice measurement in nurturing completions.
- Website Visitors. This is a favourite of many novice analytics users. Although it can be useful in some cases, it is not as useful in determining performance as later funnel measurements.
- Social Media Engagement. Social media either should or does play a significant role in your marketing efforts. Naturally, it is worthy of measurement.
- Referral Traffic. Understand where your visitors are coming from.
- Net Promoter Score (NPS). A measure of customer satisfaction. Listen to your customers and learn.
- Organic Traffic. The success of your SEO efforts laid bare.
- Event Attendance. A KPI that let’s you know how well you marketing did to attract event attendance.
- Customer Retention. We considered excluding this one, but changed our mind. It’s always good to have a grasp on the knowledge, but there are other KPI’s to choose from that would prove more useful. Again, depends on your business.
Conversion rate optimization is about increasing the percentage of conversions on your site through validated learning, using data to challenge growth hypothesis.
Choosing the right KPIs becomes a valuable tool for measuring the success of your website. From a continuous improvement perspective, these metrics can help you understand how to grow your business.