You might have heard the term before, but what exactly are KPIs (key performance indicators)? They are a measurable value that demonstrates how effectively a company, department or employee is achieving their goals. High-level KPIs are great for focusing on overall business performance, while low-level KPIs focus on smaller aspects such as departments or particular initiatives.
KPIs of all levels are great for ensuring that your business goals stay track and that you’re not operating blinding. In short, they give you direction and show how well your business is performing. Which is why they’re needed and most definitely relevant for every business. In this series of posts, we’ll explain just how to develop appropriate KPIs in general and how to make them relevant to content marketing efforts.
How to Create KPIs for Your Business
When developing a strategy for determining your KPIs, it’s best to start at the basics and understand what your business goals are, how you will plan on achieving them and who from your team is involved with them. One great way to ensure you’ve covered all the bases is making sure that all departments are represented and key people are involved in the planning process. It will not only help you gain an understanding of the goal, but also, how to accurately plan for the goal.
So how do you determine what goals are going to be best and then how to set them up? One tried and true method is the SMART criteria:
- Specific – is the objective of the goal specific enough?
- Measurable – can you measure progress (or lack thereof) towards that goal?
- Attainable – are they realistic goals?
- Relevant – how do they fit in with the overall organization goals?
- Time-Frame – how long will it take and when is the deadline?
Following this method works for any business, of any size, in any industry. And it can even work when determining goals for clients and their campaigns you might be managing.
Some example goals could be:
- Boost sales 10% in the next quarter
- Grow website traffic 20% in next year
- Increasing social media engagement by 10% during next campaign
It’s usually at this point that most organizations stop. You’ve spent a full day brainstorming and you’ve finally figured out just what your new goals are. But beyond that, you forget to maybe take the extra steps (or don’t know how to) in defining what the corresponding KPIs are to help measure your performance in reaching those goals.
An important factor in figuring out KPIs is to remember that these are performance based measurements – not tied to financials (anything measured in currency). They are looking at the actions, tasks and performance of your employees, departments and overall company to determine if they are assisting or preventing you from reaching the established goals. For example, if you’re looking to increase your number of new clients, consider what actions are taken by your employees to attract and convert new clients – is it number of cold calls, number of communications sent to them, types of emails they’re opening, how they’re being brought into the sales funnel, etc.
From this point, select which items are most important and what you feel are most valuable in not only measuring the performance, but in also attaining your goal. It’s important to narrow it down to a select few (depending on how large or small the goal is) otherwise it can become confusing and cumbersome tracking too many KPIs.
Some great examples of basic goals and potential KPIs are:
- Boost sales 12% in the next quarter
- Daily/Weekly sales numbers
- Conversion rates
- Website traffic
- Number of cold calls made
- Number of leads captured
- Percentage of abandoned carts to completed sales
- Grow website traffic 20% in next year
- Daily website traffic
- Traffic sources
- Promotion click-through rates
- Bounce rates
- Use of Chat function or Contact Us
- Heat mapping
Once you’ve determined what actions you’re going to track, you’ll need to figure out how you’ll track the data and how often you’ll be reviewing the numbers. While there are many platforms and software services out there that can do this, a simple Excel file can also suffice when starting out.
We also suggest reviewing these numbers as a whole during weekly status meetings, or sent out as a weekly update to team members to keep everyone accountable and your company performance transparent. Below are 2 examples of what KPI dashboards can look like. And while we could go into lots of detail regarding types of graphs to use or using a coloring code for quickly identifying performance (red, yellow or green typically), create a dashboard that’s easy to understand and quickly showcases your data – nothing fancy required.
Once you get started in tracking your KPIs, it might surprise you how easy it is to see simple correlations between what’s working and what’s not working.
Key Takeaways
- Focus on 4 – 10 KPIs at one time. Too many creates confusion and become difficult to track.
- Create a balance of KPIs that are related to short-term and long-term goals.
- Make sure they’re understandable. Employees at all levels should be able to not only understand what the KPI is, but also why it’s important to the company.
- Remember to consider what stage of growth your company is in – certain KPIs will mean more to different stages of growth.
- Identify both leading and lagging indicators to understand what worked and didn’t work when moving forward. Many companies will look at one or the other and forget that there is a lot to be learned from something that didn’t or worked.
While establishing goals and KPIs might seem like it’s easy for tangible goals that can be tracked with hard numbers and data, what do you do when it comes to goals that are linked to campaigns, strategies or brands that have a harder to track outcomes and data, such as content marketing or social media? Stay tuned as the next post in this series will dive into tactics and sample KPIs that are great for measuring these types of initiatives.
Questions on how to setup or develop your goals and KPIs? Be sure to drop us a line or message anytime.
