Editor's Note: Colin Cieloha works for Skilled, where a version of this article first appeared. Today he joins us to share a comprehensive strategy for choosing the best KPIs to grow your business, all in a simple infographic.
KPIs or Key Performance Indicators are an essential part of modern business planning and goal setting. These carefully chosen and specific metrics can be tracked to indicate the performance of a department, employee, marketing strategy, or any other object oriented venture.
This diverse utility makes KPIs a unique tool for achieving your business's vision and objectives. However, when it comes to implementing KPIs, managers often find it hard to isolate the most useful ones to track. That's no wonder: the average Internet Marketer has over 20,645 potential options.
In this infographic, we outline a comprehensive strategy for choosing KPIs that will optimize the success of your business. We cover common mistakes that lead to the adoption of poor KPIs, and aim to give you a feel for the metrics that are relevant to your goals. Before diving in, here's a summary -
Before choosing KPIs, you should have clearly defined goals that follow the rules of SMART: specific, measurable, achievable, relevant, and time-limited. Here's a cheat sheet for factors that correspond to common desired outcomes:
- A website visitor count can help to predict and understand customer needs.
- Income from leads helps to predict future sales based on projected traffic and conversion rates.
- A visitors to leads ratio helps you to gauge the value of your current traffic.
- Optimizing response time leads to faster engagement between your sales department and prospects
- A leads to clients ratio helps to diagnose areas of your sales funnel that need improvement.
- Customer lifetime value indicates the revenue that a customer is likely to generate during the span of their relationship with your company
Marketers should understand that the best factors for gauging success change depending on business type. For instance, a content website should focus on click through rates and time spent on page are important; these factors are less important for e-commerce sites, which should focus on cart abandonment and products per order.
After selecting the KPIs for your business, its important to monitor them on a regular basis. Analysis will help to determine
- What changes your company should make to attain desired outcomes.
- Which KPIs are more useful than others: the poorest should be weeded out.
- How often your KPIs should be tracked (weekly, monthly, quarterly?)
Common mistakes when choosing KPIs include:
- Measuring factors that are irrelevant to your success
- Tracking too many KPIs at one time
- Choosing factors that are difficult or even impossible to measure
E-commerce stores frequently overrate certain KPIs, and overlook better ones. Examples of overrated KPIs include,
- Number of visits
- Emails sent
- Twitter followers
- Bounce rate
Underrated KPIs include:
- Revenue conversion rate
- Average order value
- Cart abandonment rate
- Task completion rate
Continue your crash course in choosing KPIs with the infographic below. Feel free to save for future reference, or pass it along to your colleagues!
Learn more with these related OMI classes:
Web Analytics Fundamentals for a Data-Driven World
Planning SEM Campaigns: Establish Goals & KPIs
Visit the Online Marketing Institute to browse over 400 classes in the digital and social media market