Why KPIs? Strategically Selecting Your Measurements for Success
“Hope is not a strategy,” commented Oscar-award-winning filmmaker, James Cameron, reflecting on the steps he implemented on his way to success. When it comes to achieving business goals – or any goal, for that matter – I agree. You need clear objectives and a defined set of metrics to measure your progress.
That’s why strategic and intentional key performance indicators, or KPIs, are pivotal to your marketing and sales efforts. These metrics guide your team's decision-making and serve as the building blocks to effectively report on the performance and success of initiatives. KPIs are health stats – data that when intentionally and incrementally analyzed shows whether you’re on track to hit organizational goals or need to adjust.
What KPIs Should I Measure? Start With Your Goals
KPIs are not one-size-fits-all. Key performance indicators can vary by team, tactic, platform, and goals.
Without a solid definition of what success looks like for your initiative, you can’t quantify the associated metrics. A key performance indicator for the marketing team may look completely different than the sales teams based on their roles in the process. Your teams may be aligned on end goals, but KPIs can be curated and tailored to their roles in the process.
- Qualitative: numeric gauge of progress
- Quantitative: opinion or feeling-based sentiment
- Leading: based on future performance
- Lagging: based on a past result
- Input: measures resources needed to complete an action
- Process: accesses efficiencies and productivity
It’s important to focus on cutting through the weeds and selecting impactful KPIs based on your objectives rather than getting buried in data.
More Data Isn’t Always Better: Five Questions to Define KPIs
It’s easy to get tied to the philosophy: “If it is measurable, it must be important.” That’s not entirely wrong. All metrics tell a story in the right context. But if there’s too much data being tracked, it can be difficult to sift to find information of value.
Answering these questions will help pinpoint your KPI:
- What are we trying to accomplish?
- What will success be measured through (i.e., leads, revenue, conversions)?
- How will you know you’ve reached your goal?
- What will stakeholders need to know?
- How often will progress be reviewed?
Let’s put those questions into practice. Say we are offering an educational webinar and we’d like to get 40 registrations from our target audience:
- What am I trying to accomplish? 40 webinar registrations from a specific group
- What will success be measured through? Registrations and/or form fills from our target audience
- How will you know you’ve reached your goal? Registrations will surpass 40. We will collect role and title information and target specifically to ensure we are reaching the right group.
- What will stakeholders need to know? Current registrations and/or money spent
- How often will progress be reviewed? Weekly
Looking at the example, we know: that our campaign is conversion-focused, stakeholders need a top-level view, and we need to track metrics weekly. Now, we can identify what metrics will be important to track as we work towards the number of desired registrations.
Stakeholders will want to see registration numbers and how much has been spent to achieve that number. These key performance indicators will be easy to track.
Beyond these surface measurements though, as a marketing team, we want to dig down deeper into what will be driving the campaign. Our webinar registration form will live on a well-tuned landing page to help us field more registrations.
From there, we can decide between a few metrics. Bounce rate or time-on-page could both be equally valuable at gauging page engagement. In this example, you’d want to track both and use them on a case-by-case basis. Having a few extra KPIs isn’t a bad problem. It allows you to further generate reports and tell the story of your effort’s success. Just make sure there’s actionable value to what you’re tracking and not data for the sake of data.
Are Your KPIs Tied to Actionable Steps?
It’s easy to get attached to vanity metrics, such as impressions and clicks, but these seldom tell the true story of your campaign. While impressions and clicks can be high-level KPI goals because they are easily understood by stakeholders, they may not be useful for taking action to improve marketing performance.
By using KPIs as a benchmark, your team will have a clearer and more actionable path to meet your goals. Let’s say your conversion rate is trending low for your webinar.
With qualifiable and timely goals in place and regular performance reviews, your team can more easily adjust and consider additional actions, like expanding your target audience reach or messaging differently to better resonate with your audience.
How to Generate Reliable Data
For KPIs to be useful, they must be measurable and reported consistently.
There needs to be a clear process for accurately reporting back on the KPIs that you choose to follow. Your measurements shouldn’t be subjective. They need to be measurable with an acceptable unit, such as a numeric count or percentage.
Reporting on your key performance indicators must stay consistent to ensure the data being evaluated is of the best quality and reliable. Changing a KPI measurement style between reporting periods can jeopardize the practical use of the data.
KPIs are best measured against themselves from different points in time while keeping all other variables equal so you’re not “comparing apples to oranges.”
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