What do you want to achieve at this moment?
Monitoring and analyzing your KPI (Key Performance Indicators) allows you to assess whether the actions you’re currently undertaking are moving your business closer to its goals. These goals—carefully considered and properly formulated—are the starting point for determining your KPI.
A goal can be almost anything, but it must be measurable and trackable over time. Well-defined goals allow you not only to set relevant KPIs but also to gain insights into the effectiveness of your actions.
How to set KPIs?
Remember, KPIs are unique to each company. They vary depending on the nature of the business, its size, and its operational strategy. KPIs can cover both overall company performance and processes within individual departments.
How can you set the right KPIs for your business? Once you’ve established your goals, select the indicators that most significantly contribute to achieving those objectives. Let’s explore this through an example, choosing KPIs for an e-commerce business.
In the next quarter, the goal of e-commerce store X, which struggles with conversion, is to increase revenue by 20% while keeping marketing expenses below 50,000 PLN.
Among all the possible indicators to monitor and analyze, the key KPIs we identify are:
- Conversion rate
- Average cart value
- Website traffic, segmented by channels
Considering the nature of the e-commerce business in this example, we have selected data that will best reflect progress toward a common and universal goal—revenue growth.
In digital marketing, by tracking the right KPIs, we can optimize campaigns—for instance, ensuring that clients’ ad budgets are allocated in the most efficient way possible. Going deeper, separate KPIs can be established for each individual campaign or for each channel where the activities are conducted.
Key KPIs for various areas:
| Performance Marketing | Marketing Automation | UX | SEO |
|---|---|---|---|
| CTR (Click-Through Rate) | Lead acquisition cost | Conversion rate | Open rate |
| Conversion rate | Retention rate | Time on site | Bounce rate |
| Interaction depth | Organic traffic | SERP visibility | Link acquisition |
Through KPIs, you can determine whether your campaign (or the one you’re outsourcing to an agency) has been successful. Here’s a simple example: The goal of new clothing brand X in the first quarter of the year is to increase awareness within its target audience through social media. For top-of-the-funnel activities, brand X’s decision-makers set KPIs related to brand visibility. They determined that the key success metrics would be the number of new Instagram followers, the reach of published content, and the growth in user engagement compared to the same period last year.
Thoughtful Resource Management
“Performance Indicators” without the “Key” are just a collection of various metrics that provide a lot of data and insights. Key Performance Indicators, however, are those that clearly indicate the direction in which you’re heading. The more data you have, the harder it becomes to analyze, and the broader your perspective. From such a standpoint, effective resource management—especially in terms of time and budget—can be challenging.
In the previous example, the decision-makers chose only a few indicators that were most relevant for their business in the given moment, market conditions, and competitive position. Monitoring the KPIs will reveal areas that need attention, as well as confirm decisions that have already been made.
After the first month of agency work, fan engagement increased by 70% compared to the same period last year, and the reach of published content is satisfactory and aligns with the goal. However, the number of Instagram followers—targeted to grow by 3,000 by the end of the quarter—did not exceed 100. This is the moment to analyze why the key channel is underperforming and to take actions that improve the results (e.g., changing ad formats, revisiting targeting methods, or adjusting the creative concepts).
Thanks to KPIs, such reflections will emerge at the right time, allowing you to react and minimize losses.
KPIs – Analyze and Learn from Mistakes
Growth and constant change are everyday realities for any entrepreneur. In such circumstances, even KPIs won’t magically prevent you from making mistakes—after all, mistakes are a natural part of running a business. However, KPIs offer something even more valuable—the ability to analyze and learn from those mistakes. With the feedback provided by KPIs, you don’t operate blindly; instead, you gather insights and implement changes.
The long-term benefit of tracking key metrics is the ability to look at data from a broader perspective: you’ll be able to identify trends and patterns, and when you combine these insights with knowledge of other factors, you’ll obtain valuable information about your business’s seasonality. Specific actions, such as particular campaigns, can then be planned in a more optimal way.
Everything Can Be Measured
Setting the right KPIs for your business might take time. It may even turn out that the initial indicators you selected need to be adjusted. When choosing KPIs, it’s essential to focus on the previously mentioned goals and follow the principle of “less is more.” Limit your KPIs to the ones that truly matter—in marketing, especially digital marketing, almost everything can be measured. Constantly analyzing too much data can make you lose sight of your most important goals.
Just like your business, KPIs will evolve over time. It’s worth reviewing and revising them periodically to ensure they remain aligned with the current stage of your company.
Summary
By establishing and monitoring KPIs, you can significantly improve the management processes in your business, save resources, and focus on achieving your goals more efficiently.
Not sure what KPIs are right for your business? We can help! Not only can we define them, but we can also help you achieve them.
