What is a KPI?
Sometimes marketing jargon can make things sound complicated. When I first heard the term KPI I had to do an online search to see what it meant. Even then I thought it was something for corporations and big business.
But no, KPIs are for all of us and they’re actually quite simple to set and measure.
I’m going to attempt to demystify:
- What is a KPI?
- What sort of things qualify as KPIs?
- How should you go about setting them for your business?
What is a KPI?
When you search the web for ‘What is a KPI’ the top result comes from Klip Folio who describe it as:
“A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching targets.”
But what does that actually mean?
KPIs are statistics that relate to your business goals.
For example, if you are new to social media the statistics you choose to measure may well be related to the number of relevant followers you have or how much reach you get.
As your campaigns progress your metrics will become more sales orientated.
- How many leads are you getting?
- How many sales?
- How much money are you making from those sales?
By setting these KPIs you’ll know if your campaigns are working or not working.
Do small businesses need to measure KPIs?
For small business measurement is crucial. It’s not as much fun as creating content or conversation online but it’s helpful.
It helps you stay motivated
If you’ve ever found yourself wondering if you are wasting time with your online marketing you’ll know it can strip you of your motivation. If you measure on a regular basis you’ll know if you are succeeding.
When you see positive results you’ll keep going through your moment of doubt. When you don’t have positive results…
You’ll have more success
KPIs aren’t there just to show you what is working. They’ll tell you what isn’t. Once you’ve identified what isn’t working well you can adjust your strategy until you do succeed.
How do I decide what KPI’s I need to measure?
Measurement starts with your business goals.
Do you want to:
- Grow sales?
- Encourage more repeat customers?
- Get more new customers?
- Get existing customers to spend more?
- Encourage more referrals?
But not all KPIs are about money. You can’t sell to customers before they know about you. A good digital strategy needs to nurture customers through a journey. And you’ll need to set KPIs for each stage of this journey.
The above goals are easy to measure but you’ll need to get more granular with your KPIs.
Use Google Analytics, Facebook insights, Twitter analytics and other measurement tools to discover which channels drive the results you want.
Use tracking links to find out more about the traffic that comes to your site.
Finally set a time and day each week or each day where you’ll note your key statistics. Keep them on a spreadsheet so you can analyse what works over time.
Are you ready for your KPIs?
I hope I’ve helped you understand KPIs better and you’re ready to set some for yourself. If you have let me know what you’ve chosen to measure.