Whether it's checking the validity of one's marketing strategies or building a financial plan, nowadays the Big Data are indispensable for identifying business goals and achieving them effectively.
Today to keep track of progress quickly there are a whole series of performance indicators that enable monitoring of achievements and planning of future activities.
The so-called KPIs, i.e., the key performance indicators find wide use in businesses of all kinds to make sure of the performance of internal processes, starting with marketing.
The monitoring of KPIs provides insight at different levels Whether the company's current strategy is working. By choosing the right metrics, managers will be able to make more thoughtful and focused decisions to have a successful brand.
Below we will explain what KPIs are, how to measure them, which ones are most used in marketing, and what tools you can use.
What KPI means
I KPI (Key Performance Indicators) are indicators whose function is to measure a company's results objectively by analyzing the effectiveness of various initiatives undertaken, including customer acquisition, customer satisfaction, quality of experience, return on investment, and so on.
In simpler words, KPIs are metrics that tell the following in a concise form The level of performance and the results achieved. Very often the values are expressed in percentages, so that different phenomena can be compared with each other.
For the marketing sector, measuring KPIs can involve various indicators such as campaign effectiveness, ability to general leads or conversation, ability to attract attention, engagement levels, retention rate, and quality of customer experience.
In fact, the habit of recording metrics did not originate in the digital age, but much earlier. For example, corporate balance sheet analysis makes use of the use of indicators to quickly identify the kind of performance of the company.
In any case, although such benchmarks have always existed, modern digital platforms have made any activity traceable as well as comparable and measurable. Not surprisingly, in digital marketing, the tools of Web Analytics.
The rapid evolution of marketing and technology means that the KPIs employed by companies are not necessarily the same. In fact, a survey conducted by Salesforce in 2021 surveyed marketing managers around the world and revealed that the values used changed from year to year.
The importance of KPIs
Nowadays, KPIs have assumed a key role for companies that wish to establish themselves in the market in a winning way and aim for a quality business. Let us then see why to take advantage of the help of performance indicators of this kind:
- Setting goals: Typically, medium- and long-term digital marketing goals are decided well in advance, but KPI monitoring goes further and will guide you more quickly to the intended purposes. For example, if acquired leads are to be increased, the marketing team will have to work to intuit what factors affect that value and define specific actions to achieve the goal;
- What is measured can be managed: although there are many elements that determine the success of a business, it can prove complex to figure out which ones are the most critical, unless you decide to monitor them. In short, if you do not observe something, it is difficult to know whether it is getting better or worse. Identify highlights of digital campaigns and checking progress will help to stay focused on the path laid out;
- Increased responsibility: It is well known that numbers do not tell lies. If KPIs are relevant and well understood, it is very easy and straightforward to answer questions about updating the business situation. This is because KPIs allow team members to take responsibility and Aligning efforts toward the common goal;
- Teamwork: marketing department KPIs do not have to be the usual performance indicators, but can also point toward The efficiency of the company's various departments, providing an accurate and useful result. Establishing KPIs by sectors is important to demonstrate how different departments work together toward common goals. Conveying everyone toward the same goals will provide a way to work as a team with motivation and unity of purpose.
How to choose the right KPIs
The really relevant question is only one, when approaching KPIs for the first time. What indicators should be monitored?
Answering this is not easy because there are theoretically an unlimited set of metrics that can be checked, and it is easy to fall into the mistake of relying on data that are secondary and have no real relevance.
To begin with, you can keep an eye on KPIs that affect and involve the entire enterprise, or quantifiable metrics in line with business purposes. These are usually leads, sales or conversions.
Then there are KPIs that relate to a single communication channel, which must be traceable to that precise area, without relating them to other areas. As in economics, there are also leading indicators, that is, anticipatory indicators that are helpful in attempting to understand trends of future realization.
At the same time, it is good to avoid measuring data and metrics that cannot be acted upon or affected. In other words, if an indicator cannot be changed or improved, there is no point in considering it a KPI.
So, to select a correct KPI it is necessary to ask the following questions:
- Why is such a goal important?
- What is the intended result?
- How will progress be measured?
- How can you influence the outcome?
- How will people know that they have achieved their goal?
- At what time frame will progress be reviewed?
For those who need to find the most suitable KPIs, it may be helpful to read the article by George Doran of 1981 entitled "There's a S.M.A.R.T. way to write management's goals and objectives." L'approach S.M.A.R.T. over the years has found wide use and is an excellent guide for deciding KPIs in the marketing field.
S.M.A.R.T. is nothing more than the English acronym for. "specific," "measurable," "attainable," "relevant," and "temporarily limited". Each adjective answers a question:
- Is the goal specific?
- Can progress toward the goal be measured?
- Is the goal actually achievable?
- How relevant is the goal to the company?
- What is the timeline for achieving this goal?
Providing an exact answer to these 5 questions is essential to provide clarity when choosing KPIs, even when sharing with employees as not everyone sees the indicators in the same way.
Examples of the most popular KPIs in marketing
KPIs for digital marketing
ROI: ROI (return on investment) is the indicator that reveals how much profit is generated when comparing the cost of customer acquisition with the revenue generated.
Conversion rate: Conversation Rate is nothing more than the percentage of users who turn into leads and thus into customers. This is a generic KPI for marketing, but if desired it can be applied to other categories if you want to monitor each communication channel individually.
Customer Lifetime Value: CLV is the customer lifetime value and indicates the amount of revenue a customer generates over time. Time can mean days, weeks, months or years, depending on the back-end offerings and services.
Customer Acquisition Cost: CAC monitors how much needs to be spent to win an individual customer. The figure may include advertising, phone calls, direct sales, and any other activity related to the conversion process.
Bounce Rate: Bounce Rate or bounce rate is the KPI that indicates the number of users who leave the website or page in a few seconds, without taking any action. It is a major performance metric and a high rate can mean that several mistakes have been made.
Churn Rate: Churn Rate is the metric that records the churn rate, i.e., the percentage of lost customers relative to the total number of active customers. In essence, it expresses the amount of customers who no longer purchase.
KPIs for social media
Shares, comments and likes: link shares, comments to posts and likes to social content are engagement KPIs that correspond to higher conversion rates and stronger customer relationships over time.
Number of followers: taking this indicator into account can be crucial in understanding whether or not the content shared is aimed at a suitable audience and whether or not it is interesting enough to keep their attention.
New impressions: is the social media KPI that is used to check the coverage of views and contacts, and you should work to increase it over time with paid ads, more followers and better engagement.
KPIs for SEO
SERP: The SERP (Search Engine Results Pages) is the results page of a search engine in response to a user query according to specific keywords. A performing website should be ranked high or at least that should be the intent. Doing so will result in greater visibility and more people will be enticed to click through.
Organic traffic: the higher the organic traffic, the more people find a service or product by entering related words. Organic traffic represents the number of visits received through searches on engines such as Google, Yahoo and Bing.
CTR: Click Through Rate is the KPI that measures how often users click on paid ads or web pages that appear on search engines and indicates the effectiveness of the work of copywriters and content writers.
The tools for tracking KPIs
To track different KPIs in the marketing industry, there is no single tool, but a wealth of software and tools very varied and very useful. Here are what are the most popular tools for those who want to make use of performance indicators:
- CRM software: Customer Relationship Management programs record all points of contact with business partners. So, it is always best to enlist the help of such software, which can include communication with customers and more. With CRMs, interactions can be classified according to opportunities, leads, and paying users to make future decisions and choose the right KPIs;
- Google Analytics: is the most popular and globally employed monitoring tool. Totally free of charge, it offers users An overview of key metrics via dedicated dashboard. There are a variety of reporting types and it is linked to Google Data Studio for further customization;
- Facebook Insights: Facebook Insights allows you to have precise directions on Facebook pages to know how corporate communication is going and get better results. From Facebook insights, every administrator will know how many people are viewing posts, where they are coming from geographically, and more;
- Email marketing tools: The main tools for doing e-mail marketing are. MailChimp, HubSpot, SendinBlue and MailerLite. Each will lend a big hand in shedding light on the performance of e-mail marketing campaigns.