What are KPIs? Definition, keys and examples
KPI is the acronym for Key Performance Indicators. In other words, they are metrics, variables or measurable and quantifiable factors that serve as a reference to measure the performance of the company or our marketing strategy. So, these have to be directly related to the different types of specific objectives set out in the strategic plan.
What are key performance indicators or KPIs for?
Key performance indicators are especially useful because:
- They allow us to measure the performance of a process.
- They represent a value directly related to a previously set objective.
- They are usually expressed as a percentage of achievement of that objective. This helps to quickly compare with the return on investment of another campaign or another period.
- They help us to learn and improve business and marketing decision making.
In marketing, KPIs are essential since they help us measure and monitor the performance of our campaigns based on our short or long-term objectives in a practically automated way. In a digital marketing plan, for example, there is such a quantity of information and data to process that the definition of marketing KPIs is an essential requirement to be able to carry out subsequent analyses of the actions carried out.
How to define a Key Performance Indicator
Before defining the KPIs that will be most useful to us, we must stop to think about the specific objectives we want to achieve. For this, it is very useful to follow the SMART objectives methodology. This methodology understands that any objective must meet the following requirements:
S (Specific)
M (Measurable)
A (Achievable)
R (Relevant)
T (Time-related)
However, before defining smart and specific goals, we must be clear about our overall long-term goal. This global objective will help us determine other minor goals set in the short or medium term. Once we have the rest of the specific or secondary objectives, we must determine which are the indicators that will help us monitor the performance of our actions.
With so much data at our disposal, we must select those KPIs that will help us to quantify and evaluate the actions developed in our plan.
To do so, we must bear in mind that any type of KPI must have the following characteristics:
- Quantifiable. It is necessary that the indicator can be quantified and analysed correctly.
- Relevant. It must be closely related and important to both the business and the goal.
- Decision making. KPIs must contain valuable information that helps to understand the situation of the company and the market in order to act accordingly.
- Periodicity. Key performance indicators require continuous analysis over time. So, in addition to being measurable, they need constant monitoring that will help us in making daily decisions.
In order to have a clearer idea of these indicators and the form they can take, below we will see some examples of KPIs that will surely help you.
Examples of KPIs for your marketing strategy
The list of the different types of KPIs is really extensive. Some depend on the nature of the business and the market in which the adopting company operates. However, many of these indicators are useful for any strategic marketing plan. Let's look at some of the KPI examples:
- Primary KPIs: They are more oriented to the main objectives of the company and its performance.
- Number of unique visitors
- Number of leads
- Acquisition cost per lead
- Conversion Rate
- Income per purchase
- Total revenues
- Secondary KPIs: They reinforce the main KPIs and explain the why of the data.
- Cost per lead at each level of the conversion funnel
- Newsletter subscribers
- Blog subscribers
- Recurring visitors to the blog
- Cost per visitor
- Origin of traffic according to the acquisition channel (organic, paid, social, direct, referral or e-mail)
- Average price per transaction
- Practical KPIs: There are some indicators that are practical depending on what we want to analyse or simply to compare the data with another time in of our strategy, and thus draw conclusions and better understand certain situations that are sometimes cyclical.
- Number of visits per page
- Bounce Rate
- Users redirected by each SEO landing page
- Domain Authority
- Most searched keywords (relevant to the business)
- Most viewed content on the website
- Number of interactions on social networks
In short, KPIs are an essential tool to analyse and improve our actions in the face of any strategy. At BCM Marketing we are constantly analysing and comparing data in order to improve and get more out of each of the digital actions that we help our clients undertake. We know that only in this way can we improve and continue to stand out from the competition. Whatever digital strategy you want to undertake, we help you make it a reality by taking advantage of all the available opportunities.
