Marketing managers and their teams have access to an abundance of data which never ceases to increase. The initial reaction is to stop any further data collection: “We have enough data! Anyway we don’t have the time to exploit all of it.” However, what is important is not to have lots of data but rather to have the right data, the data that is important to us and that we are interested in, the data that will provide us with information on the strategy to be implemented. A lot of companies, despite having tagged their entire site, are incapable of obtaining values for such data. By thinking too much about what they should measure, companies find themselves in a situation where they are unable to evaluate their online strategy. This is where defining KPIs comes to the rescue.
A KPI is more than just the most important indicator.
The term KPI is often used very lightly. To say that such and such an indicator is a KPI will give a certain level of importance to the indicator in question and will make it the must-have indicator, allowing to people who use it to support any plans they may have.
KPI means Key Performance Indicator. If we had wanted to say that a KPI was important we would have called it IPI for Important Performance Indicator. However, the term key was used, why?
What puts the key in key indicator? Well, an indicator’s close link with a company’s strategy. KPIs are used to implement the strategy and as a result are defined from it.
The aim of a company strategy is to achieve a goal, which can be declined into several different strategic objectives which themselves are declined into operational objectives. KPIs are the result of transforming objectives into indicators. To successfully define KPIs for your own company, you need to start by defining your company’s objectives. This will then lead to the creation of specific needs which will not have been laid out in the initial tagging plan and as a result it will be necessary to obtain new data.
Are KPIs necessary?
No. Companies which do not require any particular strategy, or companies which have a strategy in place and which do not want to know about their online performance can do without defining KPIs.
Whenever you become involved in online marketing you need to define success. Events happen too quickly so it becomes necessary to have regular updates on the results and performance of your online activities. Is the strategy, which was implemented a couple of months ago, actually working? It is really important to know how to measure success so that you can react and adjust your strategy if need be.
Defining your own KPIs is the only way to find out if what you have decided to do is successful or not.
KPIs allow you to control how your objectives are achieved. It is very satisfying for companies and their marketing teams whenever the following objectives have been reached: increasing traffic coming from search engines, increasing your brand awareness, reducing the abandon rate in conversion funnels, being successful in making new customers carry out another purchase on your site. This shows that the right decisions were made and that the right risks were taken. Marketing helps companies make money. Not only will this increase your motivation to be more successful it will also contribute to raising your credibility and authority within the company.
On the other hand, it is disheartening to find out that a website is unsuccessful at generating revenue. It is also frustrating not knowing how to improve results and not knowing where to start to do so. This tends to be the case in companies which have an unclear strategy in place and the indicators used to evaluate the strategy in place are unknown.
Defining KPIs will give you the opportunity to review your strategy and focus on operational results whenever the results are poor.
What you need to do is to try and have an overall view of your company strategy! You will then be able to focus on specific areas to identify the factors behind poor performances. You can then ask your teams to develop plans of action which are necessary to improving results.
You should not be content with the data that you have. You need to try and be able to obtain the data that leads to, and evaluates success.
Would you like assistance in creating KPIs that will lead to an effective strategy, as well as assistance in developing custom, professional dashboards? If so, please feel free to get in touch with your questions!