kpi

Define your KPIs

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Do you know what a KPI is?

KPIs, Key Performance Indicators, are used to measure the performance of a company’s processes and, with this information, know if goals are being achieved.

It is a technique widely used by executives and managers in their management since it enables them to communicate the development of the company to other employees.

Through KPIs, all employees are aware and become involved in the mission of the corporation. Efforts align with strategies established by superiors.

With KPIs, it is possible to quantify the performance of a company and help workers understand how their activities contribute to the overall success of key company factors.

With KPIs, leaders can base analysis and decisions on quantitative data. For example, let’s use a digital marketing scenario…

The measurement of results is extremely important for those who invest in this digital marketing. The use of efficient tools for this is always welcome. When carrying out a digital marketing campaign, there is a need to visualize the goals for each action.

In this case, KPIs are used as indicators of performance for each of these goals. KPIs allow immediate follow up in the course of actions and provide information that facilitates understanding the progress of a campaign, even by those with little technical knowledge about digital marketing. It can also be useful to provide campaign data to a client who hires the services of an agency. When properly related to the objectives of the company, it may even point out where there is a failure or weakness to address.

To understand the importance of KPIs in digital marketing analysis, it is also important to note the difference between KPIs and metrics, since both are indicators. Metrics point to a gross number, for example, number of visitors, bounce rate, and traffic source.

With KPIs, we are informed of the results that emerge from the metrics. KPIs demonstrates if a certain goal of conversion was reached or not. To make it clearer, here are some examples of KPIs and how the metrics are used:

  • Conversion rate: total sales ÷ total site visits
  • Average sale: total revenue ÷ total sales
  • Index of engagement: total visitors that interacted with page ÷ total visitors
  • Social influence index: total liked or retweeted posts ÷ total posts posted

Performing a correct analysis and having a proper understanding of both metrics and KPIs is a critical step in making decisions about a campaign and other plans. If poorly performed, wrong conclusions can be drawn and they can compromise the development of a brand.  On the contrary, if properly performed, KPIs can contribute to the success of operations and strengthen a company’s network.

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Source: internetinnovation.com

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