Key performance indicators (KPIs) help you to cut through the noise and get the right information, important for your business. However, there are certain factors to consider before setting a metric into the almighty KPI slot. And, even after you’ve selected your KPIs that will help you with strategic decisions, there are helpful metrics that can help you ensure meet KPIs for your business.
Not all metrics are KPIs
Although both KPIs and metrics are used to check the performance and KPIs fall within the better definition of a metric. It is important to know that because KPIs are more significant to the overall success of your campaigns.
At SMX Virtual in December, TanuJaveri, global digital analytics enablement lead at IBM, explained metrics and KPIs as below:
Metric: A quantifiable measure that helps to track and get the status of a specific process. In simple terms, a measurement you add to track some aspect of your business activity.
KPI: This is also a measurement, but it is or some specific strategic business goal and reflects how successful your business is at achieving these goals.
Javeri said, “Metrics reflect how successful an activity is done to support the KPI”. In layman language, KPIs are strategic, while metrics are tactical.
Finding the right KPI for you
It will help you know which stage your business is at. Its current goals can help you find out KPIs for your business.
You have to consider the following:
- Are you working for creating greater awareness or capturing more conversions?
- Is your business gets affected by external factors such as market demand or seasonality?
- How can measurable activity get you closer to your goals?
- How can you measure the effectiveness of your activities?
- What numbers define recent or long-term business performance?
It’s important to outline your short and long-term goals — think about how frequently you need to calculate performance or make changes. It depends on the type of the business and sector it functions in.
Narrowing down the list of KPIs for your business
Shifting priorities in one particular direction, help you focus on the steps to be taken, besides the other areas. You have to consider how these new goals may affect your business operation. As you narrow down your list of potential KPIs for your business, don’t overlook that the ones you ultimately commit to should be significant, contribute to an overall objective. They are responsible for business benefits. From an organizational perspective, having an easily understood set of KPIs can help you achieve those goals.
Bolstering your KPIs
There is a metric for each part of the user journey. It will help you break down the user journey, phase by phase, aligning each step with a goal, and restructuring your touchpoints accordingly. These are essential steps for maximizing customer success. It will help you keep an eye on your various marketing channels and better appreciate how these channels KPIs for your business.
Funnel Analysis Metric
Funnel analysis can help you find barriers inhibiting conversions so that you can take the required action. For example, if your renewal rates are low, it poses a problem for the product or customer service. Besides, funnel analysis can also reveal what’s working well? It will be more realistic and strategic with your marketing decisions.
Leading & Lagging Indicators
Some indicators need to add and should be used to inform decisions that will boost your KPIs of your business. You can break it into two buckets: “lagging” and “leading” indicators.
Lagging indicators will tell you about what is already present on the website. It gives you some insight into the current state of your business. The data is easier to measure as it has past information and can be used as the benchmark for future campaigns or projects.
- Revenue from last quarter
- Number of paying event attendees
Leading indicators, like contact form, fills, number of clients committed to longer contracts, and site traffic can help you make predictions about your website’s future.
These types of indicators are important. They help you to measure how quickly you will achieve the target KPIs of your business.