Understanding what your company needs to measure is a major step in the right direction for online marketing. In fact, digital and online marketing is special in that data can be so accurate and precise. Too much data can actually be very challenging for marketing teams that are incapable of processing it all. Establishing key performance indicators (KPIs) early in the process can be a blessing for a marketing team--helping to sharpen the focus of the team and drive forward in a clear direction.
Key performance indicators (KPIs) are typically more than just the measure of general website traffic or visits. KPIs are typically aligned with business goals. Website conversions often serve as great KPIs because they tie to the top-of-the-funnel and connect marketing to sales.
Web analytics tools like Google Analytics help measure mostly anonymous website or web app traffic, but Google Analytics can also clearly measure conversions throughout a website. An example of a conversion could be the submission of an inquiry form or as specific as a product purchase through an eCommerce website.
It should be noted that a KPI is not the same as a conversion goal. A KPI is a general measure of your marketing progress or success. The measure of conversions over a month can act as a great KPI for some organizations depending on their business goals and needs.
Defining ideal KPIs
- Align with business goals - A clear measurement of marketing performance that is relevant to the goals of an organization or marketing campaign
- Measurable as a success or failure - The ability to set a goal line is critical to defining good KPIs. Ultimately a marketing team must be able t0 quickly determine success or failure using KPI reports.
- Quick snapshot perspective - A marketing team should immediately be able to understand immediately if a campaign is doing well.
- KPIs must be long-lived - Key performance indicators should be data that can be measured over time. A KPI should not change frequently.
Examples of KPIs
- Leads acquired (over time)
- Number of customers acquired
- Conversion rate for leads
- Conversion rate for sales
- Number of subscribers to an email list
- Number of whitepaper downloads
- Cost per sale (cost per acquisition)
- Customer engagement - Metrics that measure customer engagement
- ROI - return on investment (alignment of marketing to sales)