How do you rate the effectiveness of your marketing and sales activities? On what basis do you improve your campaigns? What do you do to check whether the decisions you have made had a positive impact on your recognition, brand visibility, and above all – on your financial results? The world of marketing and sales has little to do with reading tea leaves. This is where hard data counts, and more specifically: KPIs. What is this? Find out more!
KPI is one of the “fashionable” words in the business world. But this fashion is not unfounded at all. On the contrary! If you want to grow and make sure the actions you are taking are going in the right direction, you need to have tools to assess the state of affairs. This is what – in the broadest sense – KPIs are.
KPI – what is it?
KPI stands for Key Performance Indicators. They can be defined as data that allows you to precisely determine whether the actions taken are getting closer to achieving a specific goal.
This definition is general for a reason. There is no single set of KPIs that can be used in all situations. After all, other factors are important in direct sales, and different in the implementation of a campaign on Facebook or using sponsored links.
However, there are several elements that all KPIs have in common.
A. KPIs
must be measurable. Therefore, quantitative indicators are used. Thanks to
this, it is possible to create their summaries and observe trends – so that it
is easier to make decisions.
B. They
must relate to the previously set specific goals of the activity. So that they
indicate whether the chosen course of action is correct.
C. They
must be clear, transparent and objective – so that a specific value can be
given at any time.
D. They
cannot conflict with each other – and this means that the key campaign
effectiveness indicators for you cannot be at the same time, for example, low
budget for all promotional activities and high ranges thanks to paid promotion.
KPIs can be used in various aspects of the company’s operations. They are used, for example, in the production process, especially in systems based on lean management or in the area of HRM. However, KPIs are most often referred to in the context of marketing and sales.
Why are KPIs needed?
Effectiveness indicators are needed not only to measure the effectiveness of the actions taken. KPIs set above all the “gold standard” that should be pursued. So there are:
– a clear indication for the team carrying out a given task, what results
are expected from it,
– an element of feedback that will allow you to
efficiently introduce modifications to activities, if necessary,
– a way to clearly define the costs of campaigns
and customer acquisition (and thus – profitability of marketing activities),
– a method of expressly detecting possible errors
or shortcomings that weaken the results of marketers’ work,
– a tool that allows you to forecast further
progress and results, and as a result prepare a promotion strategy for many
months ahead.
In addition, without KPIs, it would be difficult for you to assess the effectiveness of the work of specialists you entrusted with, for example, the implementation of SEO or SEM campaigns. Without hard data, you can’t pinpoint what worked and what didn’t.
How to choose the right KPIs?
The list of indicators that could be taken into account when assessing the effectiveness of marketing activities is very long.
Imagine that you have to evaluate the effectiveness of a marketing campaign, and not 5 or 10 in front of you, but 40 spreadsheets, tables or charts. Yes, it would give you the power of information, but it would be extremely time-consuming to analyze and the results would in many cases come down to the same conclusions.
Therefore, specific KPIs should be selected – those that are most relevant to the specifics of the campaign. But the question is: how? Here are a few rules to follow.
Do not choose more than a
dozen KPIs
20 is the absolute maximum that you can use if you
implement the campaign on a very large scale. In the case of these more intimate
4-10 indicators, it is enough to get in-depth data on the one hand, and on the
other – avoid overloading with them.
Before selecting KPIs, be
clear about the goals of your actions
This is a key determinant of which data you will need. For example, when implementing
a social media campaign aimed at acquiring leads, the key KPIs will be related
to how many people left the leads and what percentage of all visitors to the
profile were. However, this data will be less important if the main goal of the
activities was to “start” the fan page or persuade customers to buy a
specific product.
Choose multistage indicators
At the beginning of work with KPIs – especially
when there is no access to historical data – it may be difficult for you to
determine which indicators will be the most valuable for measuring the effects
of activities and planning subsequent ones. Therefore, you can start with a
slightly wider range of KPIs and narrow it down over time to those that
actually convey the necessary information. Test, check, observe and analyze –
so as to possibly modify the set of indicators that determine your
effectiveness.
Choose indicators that show
both efficiency and lack of it
Remember that the purpose of introducing them is to monitor the progress of
activities and whether the money invested in marketing pays off. Therefore, it
is worth choosing KPIs so that they show both positive and negative effects.
Don’t trust standardized
solutions
This is important especially if you cooperate with
an external digital agency that carries out a campaign for you. Make sure that
the set of KPIs will be personalized and adapted to the specificity of the
tasks that the experts will face.
Keeping in mind these few elements, you can be sure that the data obtained thanks to KPI will allow you to make the right decisions – with the current situation and the future in mind.
What KPIs are key in marketing?
Now that you know the general principles of selecting indicators and you do not have to ask what a KPI is, it is time to move on to details related to the area of marketing, and more specifically – internet marketing. This is the zone that interests us the most. This is because it is specific. On the Web:
– it is very easy to collect quantitative data on the course of any
promotional campaigns,
– a number of factors are important, including
with building interest, commitment or triggering interaction,
– data is provided on an ongoing basis, thanks to
which it is possible to efficiently correct the actions taken.
So it’s time to take a look at these KPIs that are crucial in e-marketing. Here, however, a small star should be put: different KPIs will be important for the website, different for social media campaigns, and still different for the implementation of the Google Ads campaign. That is why we have divided their description into several sections.
KPIs for websites
Do you want to check what response your website evokes and whether it is an effective marketing and sales tool? This is particularly important in the case of e-stores, but also company websites, which are one of the basic sources of information about each brand.
In the case of websites and
e-commerce, the key will be:
– KPIs related to website traffic.
It is about elements such
as:
– the number of unique users visiting the website – given on a daily,
weekly, monthly and annual basis,
– the number of page views – information on how
many times the recipients visited the website,
– average visit time – the longer, the greater the
involvement in the information contained on the website indicates
– the so-called Bounce Rate – the percentage of
visitors who stopped browsing the website in the first seconds after going to
the website. The higher the Bounce
Rate, the clearer the message that the website can be, for example,
positioned for wrong key phrases or that the website layout needs to be
changed,
– traffic sources – it is assessed whether they
are organic (and therefore come from regular searches) or paid for. Analytical
tools also record from which websites the user was redirected to the website,
which allows, for example, to decide on promotion channels,
– indicators related to user behavior and
engagement.
In this context, the
following works:
– duration of a single session on the website,
– number of visited subpages (and what subpages
they were),
– the number of interactions per visit – e.g.
clicks for more information, go to additional subpages, leaving a lead, etc.
In e-commerce websites and those focused on acquiring leads, the conversion rate is also important, indicating how many people took the action expected by the creators of the website, i.e. left an email or made a purchase.
The indicators listed above are easy to determine. But it doesn’t stop
there. Marketers also pay attention to the proportions between certain values.
Their attention in the context of the assessment of the effectiveness of the
project may be attracted by the relationship between:
– the number of visits and the number of
interactions / conversions,
– the number of leads and the number of customers,
– visits from organic sources compared to those
that are paid.
KPIs for online advertising campaigns
Other KPIs will be important when you decide to pay for promotion on the
Internet, e.g. using the Google Ads system. In this case, the most important
things will be:
– number of ad views – indicates how many times
the message (e.g. banner or sponsored link) has been successfully displayed to
the recipient, important when assessing the daily, but also weekly or monthly
results of the campaign,
– CTR (click-through rate) – the number of clicks
on the ad, and thus the interactions with it. The higher it is, the more
effective the CTA message is to convey promotional content,
– conversion rate – crucial especially if the ad
leads on a landing page designed to generate sales leads. The higher the
conversion rate, the more engaging your campaign is,
– conversion cost of one person – this is a
proportional calculation of how much it cost you to acquire one sales lead. The
lower the better
– “Quality Score”, i.e. an indicator of
content quality and trust in it – is related to the quality of content, e.g. on
your landing page or website. The more substantive content, the more you will
gain from organic promotion on the Web.
KPI for social media campaigns
Communication on Facebook
or other social media also requires specific KPIs. In this case, the following
are, for example:
– the ratio of the amount of published content to
conversion – marketers observe how the number of posted posts and other
materials translates into audience engagement in order to correct the current
campaign and plan the next campaign without errors,
– number of interactions – understood, for
example, as “liking” a post, sharing it or writing a comment. The
higher the interaction rate, the higher the effectiveness of the campaign,
– organic and paid ranges – the former result
mainly from a large number of interactions with the post and its frequent
sharing. The better the organic results, the more positive this message is for
a promoting company,
– the number of customers involved in contact with
the brand – i.e. those who, for example, liked the fan page or turned on
notifications regarding its content.
KPI for mailing
Still other KPIs will be important when running an email campaign. This is an underestimated, but very effective way of promoting online at a low cost. Although conversion rates are relatively low here, as long as the message reaches a well-targeted client and is skillfully prepared, it can bring specific results.
In the case of mailing,
effectiveness is measured using parameters such as:
– Open Rate – the number of recipients who opened
the sent message at all. If it is small, it is a clear sign that you need to
change, for example, the wording of the message titles or make it more attractive
in some way;
– CTR – in this context, the number of people who
clicked on the link contained in the e-mail is important,
– Subscription Rate – an indicator informing about
the number of new users subscribing to the newsletter;
– Unsubscription Rate – this is the opposite
indicator, showing how many people have unsubscribed from the mailing;
– the number of “returns” – e-mails that
did not reach the addressee at all. Their large number indicates the weakness
of the database, and hence the need for more effective acquisition of real
leads,
– increase in the list of subscribers to the
newsletter – if it is dynamic, it means that the actions taken in the context
of obtaining leads are carried out correctly.
These are, of course, just examples of KPIs that matter. It should be remembered that other indicators will be important for campaigns carried out with the use of different tools. For example, in mobile campaigns, the number of users of the application created, traffic on the company’s mobile website or the frequency of visits via a smartphone will be important.
You have set a KPI and what next?
Setting key KPIs is only the first step towards effective verification of the effectiveness of your marketing activities. In the next section, it is necessary to indicate the tools that will be used to collect and analyze this information. You will receive many of them from the system you use – the data is provided by, for example, Google Analytics or the Facebok advertising system. Specialized software is required to receive in-depth information.
It should also be remembered that the data obtained from KPIs must be processed, developed and analyzed – so that it is possible to take specific actions on their basis. It is best to entrust this task to specialists.
