Digital metrics such as web campaigns can be measured in all aspects, and there are numerous indicators to do so; quantitative indicators such as PV, qualitative indicators such as Conversion Rate, and value indicators such as Cost Per Click. However, no matter how easy it is to measure, if it cannot be converted into financial indicators such as sales and profits, it cannot be called a KPI. With the approval of the authoriser, you should define KPIs according to your budget and objectives to boost your marketing intent.
Quantitative and value indicators converted into targets and budgets
When purchases take place offline, it is not practical to calculate these metrics based on direct data. Therefore, KPIs for web campaigns can still be defined intuitively based on past achievements. However, this makes it difficult to get approval from the authorizer and measure the effect after implementation because it is not possible to know what return can be obtained from the measurement.
Even if you have a limited amount of data, you can define appropriate KPIs according to your objectives and budget by combining survey data and modeling. The following data is needed to define the above quantitative and value indicators:
- Campaign budget
- ROMI target
- Average number of months
- Campaign period
- Average purchase price
- Gross margin
- Average monthly purchases
- Target population
- Awareness rate
- Purchase intention rate
- Purchase rate
- Repeat rate
- Recommended rate
What does a good KPI look like?
A company's ability to track progress towards a goal depends on the quality of its key performance indicator. Here are the characteristics of good KPIs:
- Specific: KPIs should be detailed, simple, and clear about what they want to achieve. For example, a KPI "improve customer satisfaction" is too broad, so a good idea is to go for "improve customer satisfaction by 10% by the third quarter".
- Measurable: KPIs must be quantifiable to accurately define success. When considering measurement methods, be sure to use monetary amounts, percentages, or unadjusted data.
- Achievable: Ideally, KPIs should be set on something that can be reasonably achieved while still being a high goal. Therefore, motivate and aspire your employees to achieve the KPIs, while keeping their minds and bodies from getting very tired. Stakeholders and business leaders can also see realistic expectations.
- Relevant: KPIs are defined to drive high-level, large-scale, and important business objectives. For example, if you are part of a marketing team working on a successful customer experience, the KPIs should be tailored to your marketing objectives. All KPIs should be aligned with broad and important business objectives.
- Select an ambitious and realistic period to measure your progress against time-bound KPIs. For instance, if you want to achieve a certain turnover at the time of contract renewal by the end of the quarter, the end of the month, or the end of the calendar year.
- Evaluate: Regularly reviewing KPIs is a good way to ensure that the objectives you are working on are appropriate. At the time of evaluation, "Is the KPI you have defined still needed? What are the main factors hindering success? Do you have the budget, the tools, and the resources? What kind of content will the next KPI be?"
- Reassessment and readjustment: reassessing the KPI at a specific period, for instance, doing it at the middle and end of the KPI period. Use this opportunity to determine if you need to change your KPIs so that they are up-to-date, achievable, relevant, and in line with your business objectives.
How to define a KPI?
Follow these steps to select and set up key performance indicators:
Defining your ultimate goal
Develop a clear vision of what you are trying to achieve and keep this goal straightforward. KPIs are linked to key business objectives that are strategic and impactful to the business. Without a clear vision, you run the risk of wasting time, energy, costs, and resources. It is therefore recommended that you ensure that the objectives you have set are appropriate by asking your manager, and then have a reassessment by your manager even after the KPI has been set.
Asking the Key Performance Questions (KPQs)
It is also a good idea to create a KPQ (a question to determine whether you have achieved your objective). When creating a KPQ, don't ask questions that simply answer "yes" or "no," such as "Did you meet your sales quota?" Instead, ask challenging questions in a free-response format, such as "How can I market my product line?" Indeed, answering KPQs is a good clue to creating useful KPIs.
Examples of KPQs:
- What kind of result do you want to achieve?
- What is the reason why the deliverable is important?
- How do you define progress?
- How can you have a positive effect on the results?
- How can make sure that you have achieved your final goal?
Verifying the information gathered earlier
Before assigning the corresponding metric for KPQs, make sure that the information has not already been collected by other departments or your manager. If this is the case, KPQs can be applied to the business strategy simply by adjusting various factors. You can also set realistic KPI targets by looking at the data collected.
Collecting evidence data
Collect more information over time to create KPIs. Depending on your goal, you should collect information on industry trends, target demographics, average traffic, email performance, customer conversion rates, and competitor analysis. Use the information collected to define KPIs.
Don't measure the same KPIs as your competitors. As every company is different, what is valid for one company may not be valid for another. Take the time to identify which indicators are beneficial to your business, based on your strengths, weaknesses, opportunities, and threats.
Determining how often each KPI should be measured
Then identify the right time to see progress against the KPI. It is advisable to decide in advance on the method and timing of measurement, such as the tool used to acquire the data.
Keep in mind that in most cases, KPIs will need to be reviewed or modified. As your business grows, it is important to review your KPIs and make adjustments to reflect changes in your business. Regularly monitor the progress of the KPI to ensure that the content of the KPI is still useful and follows the intended information.
Setting short and long term objectives for the KPI
Let's start with the following example, if your KPI receives 2400 members in one year, it is recommended that you divide it into medium-term and short-term objectives. In this case, the short-term goal is to acquire 200 new members per month. Then, depending on this number, it will be decided whether to change the expected value or the strategy.
Not reaching your goal does not mean that the choice of a particular KPI was necessarily a mistake. The data collected and the information learned can be used to improve the results of future tasks. However, it is important to clarify your shortcomings and make adjustments accordingly. Keep in mind that KPIs are for companies and individuals who make the right business decisions and make continuous and solid improvements.