What is a KPI (Key Performance Indicator)?
A KPI (Key Performance Indicator) is a number or percentage that shows the performance or results of an online marketing campaign, a website, a/b-test, advertisement, form or pretty much any element of an online campaign or website.
Measuring campaign KPIs is an excellent way to determine the effectivity of your campaigns and media. A good KPI should be:
Examples of KPIs are:
- Bounce rate (how many visitors leave your website immediately upon arrival?)
- Conversion rate (how high or low is the percentage of visitors making a sale?)
- ROI or ROAS (how much revenue do you make in comparison to your media spend?)
- Pageviews/Visit (how interested are the visitors from this campaign in your website?)
- CPA (Cost-Per-Action): how much does it cost to generate a lead or sale?
- Quality Score within Google AdWords
- Minimum visited pages per visit, to measure website interaction
There are thousands of KPIs. Define them, depending on the needs of your company and target groups and the possibilities within your web analytics software.
How to define KPIs
Defining KPIs is not an easy task. There are many in- and external factor that have to be taken into account. Mind the following when defining KPIs:
- What is important?Analyse your website data and see how your customers interact with your websites. Define interaction ‘milestones’ (e.g. visiting a contact page, white paper download, start of sales funnel, etc.).
- Is there enough data? Many businesses focus on sales, but often lack the amount of data to make a valid decision. If you lack the needed amount of data, use a different KPI that focuses on a goal earlier in the conversion funnel (e.g. leads instead of sales. Sometimes you have to go back to the roots, such as Non-Bounce visitors as a KPI. Making decisions on “lower” KPIs is more effective than making decisions on insufficient data.)
- What can you do to improve results? If you can’t influence results, don’t bother to focus on it. Think of how to improve results and make plans accordingly!
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