How do you assess the effectiveness of your marketing and sales activities? How do you improve your campaigns? What do you do to ensure your decisions have had a positive impact on your brand recognition, visibility, and, above all, your financial results? The world of marketing and sales is little more than a guessing game. What matters here is hard data, or more specifically: KPIs. What are they? Learn more!
KPIs are one of the buzzwords in the business world. But this trend isn't entirely unfounded. Quite the opposite! If you want to develop and ensure that your actions are moving in the right direction, you need tools to assess your performance. That's what KPIs are—in the broadest sense.
KPI – what is it?
KPI is an abbreviation for Key Performance Indicators . They can be defined as data that allows you to precisely determine whether your actions are moving you closer to achieving a specific goal.
This definition is general for a reason. There's no single set of KPIs that can be used in every situation . After all, different factors matter when it comes to direct sales than when it comes to running Facebook campaigns or using sponsored links.
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However, there are several elements that connect all KPIs.
- KPIs must be measurable. Therefore, quantitative indicators are used. This allows for the creation of comparisons and the observation of trends, thus facilitating decision-making.
- They must relate to previously established, specific action goals, so as to indicate whether the chosen course of action is appropriate.
- They must be clear, transparent and objective – so that a specific value can be provided at any time.
- They cannot conflict with each other – which means that your key campaign performance indicators cannot be, for example, a low budget for all promotional activities and high reach thanks to paid promotion.
KPIs can be used in various aspects of a company's operations. They are used, for example, in the production process, especially in systems based on lean management, or in the area of human resources management. However, KPIs are most often discussed in the context of marketing and sales.
Why are KPIs needed?
Performance indicators are needed not only to measure the effectiveness of actions taken. Above all, KPIs establish a "gold standard" to strive for . They are:
- a clear indication to the team carrying out a given task what results are expected from them,
- a feedback element that will allow you to efficiently introduce modifications to your activities if necessary,
- a way to clearly determine the costs of campaigns and customer acquisition (and therefore profitability) marketing activities),
- a method of expressly detecting possible errors or shortcomings that weaken the results of marketers' work,
- a tool that allows you to forecast further progress and results, and as a result, prepare a promotion strategy for many months in advance.
Moreover, without KPIs, it would be difficult to assess the effectiveness of the specialists you've entrusted with, for example, implementing SEO or SEM campaigns . Without hard data, you simply can't pinpoint what worked and what didn't.
How to choose the right KPIs?
The list of indicators that could be taken into account when assessing the effectiveness of marketing activities is very long.
On the one hand, this is good news, as analysts can access a very broad set of data and, consequently, draw in-depth conclusions. However, on the other hand… too much is a bad thing. This principle also applies to the selection of KPIs. Remember, these are key performance indicators, meaning the most important ones that actually impact the success of ongoing activities , not all of them.
Imagine you were asked to evaluate the effectiveness of a marketing campaign and were presented with not just 5 or 10, but, say, 40 spreadsheets, tables, and charts. While this would provide a wealth of information, analyzing it would be incredibly time-consuming, and the results would often converge to the same conclusions.
Therefore, it's important to choose specific KPIs —those most relevant to the specifics of your campaign. The question is, how? Here are a few principles to follow.
- Don't choose more than a dozen KPIs
20 is the absolute maximum you can use if you're implementing a very large-scale campaign. For more focused campaigns, 4-10 metrics is perfectly sufficient to both obtain in-depth data and avoid data overload.
- Before you choose your KPIs, clearly define the goals of your actions
This is a key determinant of which data you'll need. For example, when implementing a social media campaign aimed at generating leads, KPIs related to how many people left contact information and what percentage of all profile visitors they represented will be crucial. However, this data will be less important if the primary goal of the activity was to boost the fan page or persuade customers to purchase a specific product.
- Choose multi-stage indicator selection
When you're just starting out with KPIs—especially without access to historical data—it can be difficult to determine which metrics will be most valuable for measuring the results of your actions and planning future ones. Therefore, you can start with a slightly broader set of KPIs and, over time, narrow it down to those values that truly convey the necessary information. Test, verify, observe, and analyze—so you can eventually modify the set of metrics that determine your effectiveness.
- Choose indicators that show both effectiveness and ineffectiveness.
Remember that the purpose of implementing them is to monitor progress and whether marketing investments are yielding a return. Therefore, it's important to select KPIs that demonstrate both positive and negative outcomes.
- Don't trust standardized solutions
This is especially important if you're working with an external digital agency to implement a campaign for you. Ensure that the set of KPIs is personalized and tailored to the specific tasks the experts will be tasked with.
By remembering these few elements, you will be sure that the data obtained thanks to KPIs will allow you to make the right decisions – both for the current situation and for the future.
What KPIs are key in marketing?
Now that you know the general principles of selecting metrics and don't need to ask what a KPI is, it's time to move on to the specifics of marketing, or more specifically, online marketing . This is the area that interests us most because it's so specific. Online:
- it is very easy to collect quantitative data on the progress of any promotional campaigns,
- a number of factors are important, including those related to building interest, engagement and triggering interactions,
- data is provided on an ongoing basis, allowing for efficient corrections to be made to the actions taken.
So it's time to take a look at those KPIs that are crucial in e-marketing.
However, it's worth adding a small asterisk here: different KPIs will count for a website, different ones for social media campaigns, and still different ones for Google Ads campaigns . Therefore, we've divided their descriptions into several sections.
KPIs for websites
Want to see how your website is responding and whether it's an effective marketing and sales tool? This is especially important for e-commerce sites, but also for company websites, which are, after all, one of the primary sources of information about every brand.
In the case of websites and e-commerce, the key factors will be:
- KPIs related to website traffic.
This concerns elements such as:
- the number of unique users visiting the website – provided on a daily, weekly, monthly and annual basis,
- number of website views – i.e. information about how many times recipients visited the website,
- average visit time – the longer it is, the greater the engagement with the information contained on the website indicates,
- The so-called Bounce Rate, or bounce rate, refers to the percentage of visitors who abandoned browsing the website within the first few seconds of landing on the page. The higher the Bounce Rate, the clearer the message that the website may be, for example, positioned to bad keywords or that the website layout needs to be changed,
- Traffic sources – they are assessed as to whether they are organic (i.e., from regular searches) or paid. Analytical tools also record which websites redirected the user to the site, which allows, for example, decisions to be made regarding promotional channels,
- indicators related to user behavior and engagement.
In this context, the following are useful:
- duration of a single session on the website,
- the number of subpages visited (and what kind of subpages they were),
- the number of interactions per visit – e.g. clicks for more information, going to additional subpages, leaving a lead, etc.
In e-commerce websites and those focused on lead generation , the conversion rate is also important , as it indicates how many people took the action expected by the website creators, e.g., left an email or made a purchase.
The metrics listed above are easy to determine. But that's not all. Marketers also pay attention to the proportions between certain values. In the context of assessing the effectiveness of a project, they may be drawn to the ratios between:
- number of visits and number of interactions/conversions,
- number of leads and number of customers,
- visits from organic sources compared to those that are paid.
KPIs for online advertising campaigns
Other KPIs will be important if you decide to pursue paid online promotion, for example, using Google Ads . In this case, the most important will be:
- number of ad views – indicates how many times a message (e.g. a banner or sponsored link) was effectively displayed to the recipient, important when assessing the daily, but also weekly or monthly results of the campaign,
- CTR (click-through rate) – the number of clicks on an ad, meaning interactions with it. The higher the rate, the more effective the CTA message conveyed by the promotional content,
- Conversion rate – crucial, especially if the ad leads to a landing page designed to generate sales leads. The higher the conversion rate, the more engagement your campaign generates.
- Cost per conversion – this is a proportional calculation of how much it cost you to acquire one sales lead. The lower the better,
- The "Quality Score," an indicator of content quality and trust, is related to the quality of the content found on, for example, your landing page or website. The more substantive the content, the more you will benefit from organic online promotion.
KPIs for social media campaigns
Communication on Facebook and other social media also requires setting specific KPIs. Examples include:
- the ratio of published content to conversions – marketers observe how the number of published posts and other materials translates into audience engagement in order to correct the current campaign and plan the next ones without errors,
- The number of interactions – understood as, for example, "liking" a post, sharing it, or writing a comment. The higher the interaction rate, the higher the effectiveness campaign,
- Organic and paid reach – the former results primarily from the high number of interactions with the post and its frequent sharing. The better the organic results, the better the news for the promoting company,
- the number of customers engaged in contact with the brand – i.e. those who, for example, liked the fan page or enabled notifications regarding its content.
KPI for mailing
Other KPIs will be crucial when running an email campaign. This is an underrated yet highly effective way to promote your business online at a low cost. Although conversion rates are relatively low, if the message reaches a well-targeted customer and is skillfully crafted, it can yield tangible results.
In the case of mailing, effectiveness is measured by using parameters such as:
- Open Rate – the number of recipients who actually opened the sent message. If it's low, it's a clear sign that you need to change the way you phrase your message titles or make it more attractive in some way.
- CTR – in this context, what counts is the number of people who clicked on the link contained in the email,
- Subscription Rate – an indicator informing about the number of new users subscribing to the newsletter,
- Unsubscription Rate – this is an opposite indicator, showing how many people unsubscribed from the mailing;
- the number of "bounces" – emails that never reached the recipient. A large number of them indicates a weak database and, consequently, the need to acquire real leads more effectively,
- growth of the list of newsletter subscribers – if it is dynamic, it means that the actions taken in the context of lead acquisition are carried out correctly.
These are, of course, just examples of KPIs that matter. It's important to remember that different metrics will be relevant for campaigns implemented using different tools. For example, in mobile campaigns, the number of users of the created app, traffic on the company's mobile website, or the frequency of smartphone visits will all be important.
You've set your KPIs, what's next?
Defining key KPIs is only the first step towards effectively verifying the effectiveness of your marketing efforts. The next step is to identify the tools that will be used to collect and analyze this information. Much of this information will come from the system you use – data provided by Google Analytics or Facebook's advertising system , for example . However, obtaining in-depth information requires specialized software.
It's also important to remember that data obtained from KPIs must be processed, developed, and analyzed so that specific actions can be taken. It's best to entrust this task to specialists.
Need help setting KPIs, collecting, and analyzing data? Verseo experts are here to help. Call or write to discuss methods for measuring your campaign's effectiveness.
Frequently asked questions about KPIs
KPIs (Key Performance Indicators) are measurable numerical values that demonstrate the degree to which a company, department, or individual employee is achieving specific business goals.
Using KPIs allows you to base your company's management on hard data rather than gut feelings and intuition. These metrics enable ongoing progress monitoring, faster identification of bottlenecks, better budget control, and efficient response to potential problems.
There's no single, universal list that will work everywhere. Metrics must be closely aligned with the company's industry, goals, and operating model. A good practice is to use the SMART rule—the selected KPI should be specific, measurable, achievable, business-relevant, and time-bound.
When managing marketing or campaigns (e.g. in Google Ads), the following parameters are usually analyzed:
- CTR (Click-Through Rate): the click-through rate of ads.
- Conversion rate (CR): the percentage of users who completed the desired action (e.g., purchase in a store).
- CPA / CPL: cost of acquiring a customer or contact (lead).
- ROAS / ROI: Metrics that measure return on advertising spend or overall return on investment.
By far the biggest mistake is tracking too many metrics simultaneously, which leads to analytical chaos. Equally damaging is monitoring data without drawing conclusions (lack of regular analysis) and setting goals that don't directly translate into the company's overall strategy.
Summary
The above article covers the following topics:
- What are key performance indicators?
- The role and purpose of KPIs
- Criteria for selecting KPIs
- Establishing KPIs: Next Steps
