In today’s increasingly digital landscape, businesses are literally drowning in data (according to an IBM estimate, by 2020 the world had 40 Zettabytes or 43 trillion Gigabytes of data) but thirsting for better insights to guide businesses toward better decision-making. In fact, recent estimates suggest businesses only analyze about 0.2% of available data. So, what’s happening to the other 99.8% of the data available for analysis? And, does it matter that such a small fraction of available data is ever analyzed? Both great questions, which we hope to answer by providing 19 KPIs to monitor. These KPIs (key performance indicators) correlate strongly with the revenue generated by a firm, thus monitoring performance across these KPIs offers the opportunity to explode your revenue.
KPIs to monitor
Paying attention to all the data available to a business is not only impossible, it’s impractical as much of the data produced doesn’t correlate with business success. That’s where KPIs come in — they guide analysis toward metrics with the greatest potential to impact performance.
To a certain extent, a specific business’s KPIs are a function of their business goals and objectives, as depicted in the graphic below.
For instance, one brand might monitor KPIs related to meeting promised delivery schedules while another firm, with no physical product to monitor, wouldn’t include this KPI. A brand involved in manufacturing products has an entire set of KPIs such as contribution margin, that are unique to their particular business model, while firms using sensors might use throughput or the mean time between needed maintenance as a KPI to assess performance.
Today, I’ll focus on marketing KPIs shared by a large percentage of businesses with a digital footprint, since it’s nearly impossible to mention even briefly all the potential KPIs to monitor performance across different businesses and industries.
Social media KPIs
Social media generates vast amounts of data in the form of posts, reactions, and engagement. Without some system to winnow down the vast data generated, it’s impossible to find insights. For instance, a client once related their experience with their previous provider who collected brand mentions across multiple social platforms. Unfortunately, their ability to analyze this data was limited; causing the firm to miss complaints until they resulted in an intervention from a government agency. Had they detected the problem earlier, they might have fixed the problem and reached out to those experiencing problems to make them whole before their complaints reached the government agency providing oversight.
By the same token, some social media metrics just have no value. We call these vanity metrics and they include all metrics related to the size of your network. There’s increasing support for network size lacking any relationship with market performance.
So, which social media metrics warrant monitoring? I curated a list on List.ly, which received nearly 3000 views and where folks could rank or add to my list. Here’s the result:
- Share of Voice — which assesses the percentage of industry mentions are for your brand. The more folks talk about you versus your competition is a surrogate for your brand image, although that assumes the mentions are positive.
- Social referrals — the number of visits (or percentage of visits) that come from social, except for those driven by social media advertising.
- CTR (click-through-rate) — although this metric is more easily manipulated using click-bait or similar tactics. CTR only matters when the clicks come from folks in your target market.
- People talking about this or similar metrics represent the virality of your messages. For instance, a trending hashtag represents great virality.
- Engagement — which is somewhat a function of the size of your network but has a stronger correlation with performance. Folks who engage with your brand through liking, retweeting, sharing, etc. act to both tacitly endorse your brand and amplify your message by transmitting the message to their own social networks.
- Sentiment — this metric attempts to categorize unstructured data about your brand (ie. posts) as positive, negative, and neutral. Obviously, the higher percentage of positive sentiment, the better your market performance.
- Influencers — Influencers have large, engaged networks of their own. When you capture an influencer, their potential to impact your performance is greater than simply gaining engagement from other users.
Image source Host Papa
Just as with social media KPIs, some website metrics have little value, although, in the case of website metrics, many of these contribute to SEO (search engine optimization) so few website metrics have no meaning. Hence, we’ve divided this list in terms of metrics related solely to SEO and those with a relationship to marketing performance beyond their impact on SEO.
- Visits — this metric represents the number of visitors coming to your site. Again, this metric is easily manipulated and has only a loose correlation with marketing performance. Its major impact is its effect on SEO.
- Bounce rate — similar to the above, this metric reflects the percentage of visits ending after viewing a single page.
- Page load time — represents the average amount of time it takes a page to load, although this potentially has some impact on market performance as visitors won’t wait long for a page to load before leaving. The impact of page load is less for serious buyers, hence the muted impact of this metric on performance.
- Pages indexed — reflects how well your site is crawled by the Google spider. A well-designed and frequently updated site has many indexed pages. Similarly, crawl errors represent a problem requiring attention.
- Duplicate content — duplicate content has a serious effect on SEO but almost no effect on market performance.
- Domain authority — this metric evaluates your website’s value as a trusted online authority in your space.
- Backlinks gained — backlinks are another metric that reflects your authority within your domain.
- Keyword performance — which keywords drive the most traffic to your website and where do you rank in a search for those keywords.
Metrics impacting performance
- Time on site/ page and pages per session — visitors with little interest in your products don’t spend much time on the site while those who fit your target market and are interested in your products spend much more time on the site.
- Repeat visits — similar to time on site, repeat visits represent your progression toward closing a customer.
- Conversion/ conversion rate — is the ultimate KPI for your business.
- AOV (average order value) — like conversion only more nuanced.
- Subscription rate — the percentage of visitors who become subscribers.
- Goal completions — set up properly, you have goals that represent how well you’re doing in lead nurturing. Set up conversions, subscriptions, and other metrics as goals.
Going beyond KPIs to monitor performance
Obviously, not all insights come from simply collecting metrics related to your KPIs. Modifying your KPIs by segmenting into demographic or geographic segments (or building more complex segments that look like your target market) provides insights as to your performance with different groups of consumers. Identifying the top channels driving performance also provides insights on where to spend your efforts and which networks might need a little more TLC.
A final thought about KPIs is that many have more meaning when evaluated over time versus a static evaluation. For instance, how has AOV changed over the last month … 6 months … compared to last year. It makes sense to graph metrics related to your KPIs over time to gain more nuanced insights.
Other KPIs to monitor
We only covered a few of the KPIs to monitor to provide a more in-depth guide. Obviously, you should create KPIs for other digital marketing efforts such as advertising, email marketing, and content marketing.
Determining KPIs to monitor is only the first step in a process that ends with generating insights. We briefly discuss these steps with the notion of improving your performance with better monitoring of KPIs.
The first step in using KPIs to monitor performance is to identify the appropriate KPIs then determine which metrics reflect a particular KPI. For instance, a firm might set a KPI as customer satisfaction and identify a metric as a specific item in a survey of customers and the percentage of repeat customers. The brand might also use mentions of the brand in social media, coded based on sentiment analysis, as an additional metric to assess the KPI of customer satisfaction. While every brand might consider customer satisfaction a KPI, the metrics available to assess that KPI might differ across brands and organizations, with some having a number of metrics to assess customer satisfaction, while others have only a single metric.
Once you have all your KPIs and you’ve identified the metrics necessary to assess each KPI, set up a process (preferably automated) to collect the necessary metrics into a single database, if possible. Here tools like Python and SQL help collect metrics from across different platforms together as analyzing a metric in isolation often doesn’t provide all the insights you find when comparing metrics against each other.
Similarly, some KPIs aren’t available from a single metric and involve a manipulation of the collected metrics. An example is conversion rate, which requires both a metric for conversions as well as a metric reflecting the number of visits. While Google Analytics provides this KPI, if you wish to represent conversion rate as a function of something other than the number of visits, you need to create this KPI from the metrics you collected.
Visualization is necessary to gain insights that drive decision-making. Tables of data just don’t have the power available through visualization. As you create visualizations, consider representing performance over time, as well as separating performance by key divisions such as by channel or by demographic/ geographic, as mentioned earlier.
Create a dashboard containing your visualizations and link the dashboard to the raw data to allow decision-makers to slice and dice the data as needed. For instance, a brand manager wants to understand KPIs related to his/ her brand, while a sales manager might want to see KPIs separated by sales territories.
Made decisions based on the metrics and KPIs produced.
I hope our discussion of KPIs helped you build an analytic process that helps explode your business performance. If you have questions or ideas for future posts, add them to the comments below.