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How to determine your Key Performance Indicators (KPIs)

Knowing the Key Performance Indicators for your business is essential to determine how effectively you are achieving key business objectives. Its also important to have defined KPIs for your marketing campaigns, without them you won’t be able to track performance, know how effective your strategies are and if they are netting you a good return on your investment or not. In this article we discuss how to set and understand KPIs and the most common metrics used to measure results from a marketing campaign perspective.

What are KPIs?

KPIs are values used to measure and track the performance of a marketing campaign. KPIs, providing they are specific to the campaign, make it more straightforward to determine targets and goals, and then in turn measure performance based on those set values. They should also be of considerable benefit to your company, and align with its overall business goals. It’s important to define the metrics that will be used to determine your KPIs early on before any campaigns are started and money spent.

Metrics

Metrics are the specific parameters marketers use to measure performance within your campaign. It can be easy to fall into the trap of getting caught up in what we call “vanity metrics”, some examples of this are:

1. Number of social media followers
2. Keyword rankings
3. Number of new leads
4. Page impressions
5. Number of YouTube channel subscribers

It’s not to say that these metrics can not be useful and provide insight to show how your digital marketing campaigns are having an effect but they should not be used as KPIs.

What we are really concerned with is providing what is known as “value metrics” some examples include:

1. Conversion rates
2. Click-through-rates (CTRs)
3. Qualified leads
4. Cost Per Acquisition (CPA)
5. Cost Per Click (CPC)
6. Social mentions, engagement and content shares

If you are planning a pay-per-click (PPC) campaign for example, value metrics such as CTR and CPC really allow a data-driven KPI strategy that provides valuable insight to further optimise campaigns and deliver an improved return on investment.

Your KPIs are also largely dependent on the area of focus of the particular marketing campaign, an organic search campaign will have different KPIs compared to a PPC campaign. Typical key performance indicators for an SEO campaign include:

1. CTRs
2. Branded traffic
3. Organic traffic
4. Backlinks
5. Bounce rate
6. Average session duration

Setting SMART KPIs

Whatever the nature of your planned marketing campaign, you need to ensure your KPIs are what is known in the industry as “SMART”, this acronym stands for:

• Specific: be clear about what each KPI will measure, and why it's important.
• Measurable: the KPI must be measurable to a defined standard.
• Achievable: you must be able to deliver on the KPI.
• Relevant: your KPI must measure something that matters and improves performance.
• Time-Bound: it's achievable within an agreed time frame.

As a rule of thumb, when a KPI is being reviewed and finalised it should meet all of the SMART criteria listed above in order as well as more general criteria such as being of benefit to your company and aligning with its business goals.

Conclusion

Taking the time to sit down and plan out clearly defined KPIs will set your business on the path to success and prevent you from being overwhelmed by irrelevant data when reporting comes in. It’s often the case that you can’t expect to start seeing a return on your investment for digital marketing campaigns for at least a few months so it helps to maintain patience. Monthly reporting will display incremental improvements that are being made for assurance results are being produced.

Knowing how to best to maximise your budget and optimise your campaigns is where Faze47 Digital comes in. For more information on campaign planning and defining KPIs please get in touch with us we are ready and waiting to help your business.