To ensure that your business is progressing toward its goals, you must have a way to measure them. Key performance indicators (KPIs) are the tools you can use to track and monitor your goals with unique, specific measurements.
Keep reading to learn more about KPIs in marketing!
What are KPIs?
KPIs are quantifiable indicators of progress toward a specific result, goal, or outcome. They can be set at the individual, department, or company level. Companies use KPIs to evaluate performance and achieve larger initiatives.
KPIs vs. metrics
KPIs are often interchanged with metrics, but these two represent different figures. It’s important to understand the distinction to set KPIs correctly.
KPIs are targets that you set to measure your progress. They measure performance based on business goals. Metrics give data about everyday business activities. They measure performance based on one activity.
While metrics are low-level points that help with contextualizing your business activities, KPIs allow for strategic decision-making that targets a goal you’ve set.
Why use KPIs?
KPIs are essential for maintaining progress toward any goal, whether it’s sales-oriented or company-culture-specific. Having solid KPIs allows you to accomplish the following:
- Give team members actionable tasks: KPIs are great for breaking down specific tasks and making sure everyone on your team has something productive they can contribute. Instead of offering busywork, you can make sure they are helping with the overall goal.
- Look for areas of improvement: If you don’t have the right training or tools to accomplish a goal, your KPIs will indicate that. You can use KPIs to evaluate areas you lack that could impact your objectives.
- Monitor progress with objective data: KPIs keep you on track with your goal and prevent you from wasting time. Also, you might feel like you are making little progress, but your KPIs can prove otherwise!
Above all, KPIs can help you accomplish your goals, making your business more efficient and prosperous over time.
Types of KPIs
There are a few different types of KPIs you may use, including the following:
- Strategic: These are the most high-level KPIs that represent how the company is performing as a whole. Executives can use these to strategically plan the company’s future and next moves.
- Operational: These month-to-month or day-to-day figures represent how the company operates on a smaller timeframe. So, if there are dips in high-level KPIs, one might look to these figures to find the cause.
- Functional: These KPIs focus on a specific function or department in a business. They can be strategic or operational, but they provide the most value to one specific set of users.
You will likely use each type of KPI depending on your business size and overall goals.
So, what are some KPI examples that businesses actually use? It can be helpful to break it down by industry, since there are different goals for different companies.
KPIs in business include:
- Number of purchases
- Quality rate
- Error percentage
- Cycle timeline
So, what are KPIs in marketing? Here are a few examples:
- Number of blog posts published per month
- Website traffic
- Leads generated from search engine optimization (SEO)
- Click-through rates
- Calls generated
- Contact forms submitted
Finally, some KPIs in sales contexts could be:
- Customer acquisition cost
- Number of qualified leads
- Number of repeat customers
- Average conversion time
How to set KPIs
So, how can you set KPIs effectively to give your business the best chance at success? Here are four different tips to make sure you develop a solid list of KPIs:
- Set your goals
- Use a SMART approach
- Assign responsibilities
- Review KPIs periodically
Each of these steps will help you not only with KPIs but with goal setting in general!
1. Set your goals
In order to set KPIs, you have to establish your goals. This first step will give you an objective to strive for and something to frame your KPIs. Without a solid goal, you won’t have a direction.
You can set company- or department-wide goals to start. Each goal should have a clear purpose and path to help you create logical ways to track progress.
2. Use a SMART approach
Part of setting goals and outlining your approach is using the SMART model.
Your goals should be specific, measurable, achievable, relevant, and time-bound, or SMART.
Your goals should be specific, measurable, achievable, relevant, and time-bound, or SMART. This approach helps you set realistic goals instead of setting yourself up for failure.
Some examples of a SMART goal are:
- Improve website traffic by 50% in the next year from SEO.
- Launch 5 new blog posts a month for the next 12 months.
- Close 3 sales a week from online ads for 5 months.
With these goals, you can make a list of ways to track your progress. For example, if you want to boost the number of blog posts on your site, you might use your writer’s draft completion turnaround as a department KPI.
3. Assign responsibilities
As you create your goals and KPIs, be sure to assign specific responsibilities to teams and individuals so everyone knows what they have to do to contribute. If there is a clear chain of command, it makes it easier to accomplish and track progress.
Get buy-in for KPIs by explaining the ‘why’ behind them.
Also, be sure to explain your goals and KPIs to all of your teams — especially if your company has a multi-department goal. Keeping everyone on the same page will better help with productivity and overall strategy.
4. Review KPIs periodically
You may find that some KPIs don’t point to anything significant with your company. In that case, don’t be afraid to adjust your approach and find new ways to measure your progress.
Track your business success with SEO.com
KPIs can come in handy for any project, whether it’s earning more sales or optimizing your website for search engines. Setting goals and using KPIs as a tool can help you see more success and grow your business overall.
If you want to learn more about tracking and measuring SEO with KPIs, SEO.com has plenty of resources to help — browse our blog to get started!
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