KPIs – what are they?

How do you evaluate the effectiveness of your marketing and sales activities? On what basis do you improve your campaigns? What do you do to check whether the decisions you have made had a positive impact on your recognition, brand visibility, and above all – your financial results? The world of marketing and sales isn’t guesswork. This is where hard data counts, and more specifically: KPIs. What are they? Read on!

KPI is one of the business world’s buzzwords. But not without good reason. If you want to grow and ensure that your actions are going in the right direction, you need tools to assess the state of affairs. This is what – in the broadest sense – KPIs are.

KPI – what is it?

KPI stands for Key Performance Indicator(s). They can be defined as data that allows you to precisely determine whether the actions are getting you closer to achieving a specific goal.

This definition is rather broad for a reason. No single set of KPIs can be used in all situations. After all, different factors are important in direct sales and others in implementing a Facebook campaign or using sponsored links.

There are, however, several elements that all KPIs have in common.

1. KPIs must be measurable. That’s what quantitative indicators are used for. This makes it possible to create comparison charts and to notice trends – all that to facilitate decision-making.
2. They must relate to previously set specific action goals to indicate whether the chosen action is correct.
3. They must be clear, transparent, and objective – so that a specific value can be given at any time.
4. They cannot interfere with each other – which means that the critical campaign effectiveness indicators for you cannot be simultaneous, e.g., low budget for all promotional activities and high outreach 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 ​​HRM. However, KPIs are most often referred to in the context of marketing and sales.

What are KPIs needed for?

Effectiveness indicators are needed not only to measure the effectiveness of the actions taken. KPIs set, above all, the “gold standard” that should be pursued. As such, they are:

• a clear indication for the team carrying out a given task, what results are expected from them,
• an element of feedback that will allow you to introduce modifications to activities, if necessary efficiently,
• a way to clearly define the costs of campaigns and customer acquisition (and thus – profitability of marketing activities),
• the method of swift detection of possible errors or shortcomings that weaken the results of marketers’ work,
• a tool that allows you to forecast further progress and results and prepare a promotion strategy for many months ahead.

In addition, without KPIs, it would be difficult for you to assess the effectiveness of the work of specialists you entrusted with, for example, the implementation of SEO or SEM campaigns. Without complex data, you can’t pinpoint what worked and what didn’t. Simple as that.

How to choose the right KPIs?

The list of indicators that could be considered when assessing the effectiveness of marketing activities is very long.

On the one hand, this is good news as analysts can access an extensive data set and therefore draw in-depth conclusions. But on the other hand… enough is enough. This principle also applies to the selection of KPIs. Let us remind you that these are key performance indicators and, therefore, the most important ones that affect the success of the activities carried out, and not all of them.

Imagine that you have to evaluate a marketing campaign’s effectiveness, which means not just 5 or 10, but, for example, 40 spreadsheets, tables, or charts. Yes, they would contain plenty of data and information, but analyzing all of them would be highly time-consuming, and more often than not, these charts would bring you to the same conclusions.

Therefore, you should select specific KPIs – those that are most relevant to the characteristics of the campaign being run. But the question is: how? Here are some rules to follow.

1. Don’t choose more than a dozen KPIs

20 is the maximum you can use if you implement the campaign on a large scale. For more modest needs, 4-10 indicators it is enough to get in-depth data while avoiding information overload at the same time.

2. Before choosing KPIs, clearly define your goals

This is a crucial determinant of which data you will need. For example, when implementing a social media campaign to acquire leads, the key KPIs will be related to how many people left the leads and what percentage of all visitors it constitutes. However, this data will be less meaningful if the primary goal of the activities was to “kickstart” a fan page or persuade customers to buy a specific product.

3. Choose multistage indicators

At the beginning of work with KPIs – especially when there is no access to historical data – it may be challenging to determine which indicators will be the most valuable for measuring the effects of activities and planning subsequent ones. Therefore, you can start with a slightly more comprehensive range of KPIs and narrow it down to the values ​​that convey the necessary information over time. Test, check, observe, and analyze – to possibly modify the indicators that determine your effectiveness.

4. Choose indicators that show both efficiency and the lack of it

Remember that KPIs aim to monitor the progress of activities and whether the money invested in marketing pays off. Therefore, it is worth choosing KPIs so that they show both positive and negative effects.

5. Don’t put your trust in standardized solutions

This is important, mainly if you cooperate with an external digital agency that carries out a campaign for you. Ensure that the set of KPIs will be personalized and adapted to the specificity of the tasks the experts will face.

Considering these few elements, you will be sure that the data obtained, thanks to KPIs, will allow you to make the right current and future decisions.

What KPIs are essential in marketing?

Now that you know the general principles of selecting indicators and do not need to ask what a KPI is, it’s time to move on to marketing details, specifically Digital Marketing. It is this zone that interests us the most. That’s because it is pretty specific. In the case of the Internet:

• it is straightforward to collect quantitative data throughout any promotional campaign,
• a vast number of factors are essential, including building interest, commitment, or triggering interactions,
• data is provided on an ongoing basis so that you can efficiently correct the actions taken.

It is time to take a look at the KPIs that are crucial in e-marketing.

However, a note should be made: different KPIs will be necessary for the website, others for social media campaigns, and yet further for implementing a Google Ads campaign. That is why we have divided their description into several sections.

KPIs for websites

Do you want to check what response your website evokes and whether it is an effective marketing and sales tool? This is particularly important in the case of e-stores and company websites, which are, after all, one of the fundamental sources of information about each brand.

In the case of websites and e-commerce, the key will be:

• KPIs related to website traffic

Mainly elements such as:

• the number of unique users visiting the website – given on a daily, weekly, monthly, and annual basis,
• number of page views – information on how many times the recipients visited the website,
• average visit time – the longer, the greater the involvement in the information contained on the website,
• the so-called Bounce Rate is the percentage of visitors who stopped browsing the website in the first seconds after visiting it. The higher the Bounce Rate, the more precise the message that the website may be, for example, positioned for wrong key phrases or that the website layout needs to be changed;
• Traffic sources are assessed whether they are organic (and therefore come from natural searches) or paid for. Analytical tools also record from which websites the user was redirected to the page, which allows, for example, to decide on promotion channels.
• indicators related to user behavior and engagement.

In this context, the following is being measured:

• duration of a single session on the website,
• the number of subpages visited (and what subpages they were),
• the number of interactions per visit – i.e., clicks for more information, navigating to other subpages, leaving a lead, etc.

In e-commerce websites and those focused on acquiring leads, the conversion rate is also essential, indicating how many people took action expected by the website’s creators, i.e., left an email or made a purchase.

The indicators listed above are easy to define. However, it doesn’t stop there. Marketers also pay attention to the proportions between specific values. Their engagement in the context of the assessment of the effectiveness of the project may be attracted by the relationship between:

• the number of visits and the number of interactions/conversions
• the number of leads and the number of customers
• visits from organic sources compared to paid ones.

KPIs for online advertising campaigns

Other KPIs will be important when you pay for online promotion, e.g., using the Google Ads system. In this case, the most important things will be:

• the number of ad views indicates how many times the message (e.g., banner or sponsored link) has been successfully displayed to the recipient, which is essential when assessing the campaign’s daily, weekly, or monthly results.
• CTR (click-through rate) – the number of clicks on the ad and, thus the interactions with it. The higher it is, the more effective the CTA message is in conveying promotional content,
• conversion rate – key, especially if the ad leads to a landing page designed to generate sales leads. The higher the conversion rate, the more engaging your campaign is.
• conversion cost of one person is a proportional calculation of how much it costs to acquire one sales lead. The lower, the better.
• “Quality Score,” i.e., an indicator of content quality and trust in it – is related to the quality of content, e.g., on your landing page or website. The more substantive content, the more you will gain from organic promotion on the Web.

KPIs for social media campaigns

Communication on Facebook or other social media also requires specific KPIs. In this case, indicators that matter include:

• the ratio of the amount of published content to conversion – marketers observe how the number of posted posts and other materials translates into audience engagement to correct the current campaign and plan the next ones without errors,
• number of interactions – understood, for example, as “liking” a post, sharing it, or writing a comment. The higher the interaction rate, the higher the effectiveness of the campaign,
• organic, and paid ranges – the former result mainly from the large number of interactions with the post and its frequent sharing. The better the organic results, the more positive this message is for the promoting company,
• the number of customers involved in contact with the brand – i.e., those who, for example, liked the fan page or turned on notifications regarding its content.

KPIs for mailing

Yet different KPIs will be important when running an email campaign. This is an underestimated but very effective way of low-cost online promotion. Although conversion rates are relatively low here, as long as the message reaches a well-targeted client and is skilfully prepared, it can bring substantial results.

In the case of mailing, effectiveness is measured using parameters such as:

• Open Rate – the number of recipients who opened the sent message. If it is small, it is a clear sign that you need to change, for example, the way the message titles are formulated or make it more attractive in some way;
• CTR – in this context, the number of people who clicked on the link contained in the e-mail is substantial,
• Subscription Rate – an indicator informing about the number of new users subscribing to the newsletter;
• Unsubscription Rate – this is the opposite indicator, showing how many people have unsubscribed from the mailing;
• Email Bounce Rate – e-mails that did not reach the addressee at all. Their large number indicates a weakness of the database, and thus the need for more effective acquisition of actual leads,
• Increase dynamics in the list of subscribers to the newsletter – if it is rapid or at least stable, it means that the actions taken in the context of obtaining leads are carried out correctly.

These are, of course, just examples of KPIs that matter. It should be remembered that other indicators will be necessary for campaigns carried out using different tools. For example, in mobile campaigns, the number of application users created, the traffic on the company’s mobile website, or the frequency of visits via a smartphone will be important.

You have set a KPI, and what next?

Setting KPIs is only the first step towards adequate verification of the effectiveness of your marketing activities. Next, it is necessary to indicate the tools that will be used to collect and analyze this information. You will receive many of them from the system you use – the data is provided, for example, by Google Analytics or the Facebook advertising system. For in-depth information, however, specialized software is crucial.

It should also be remembered that the data obtained from KPIs must be processed, developed, and analyzed – so that it is possible to take specific actions on their basis. It is best to entrust this task to specialists.

Do you need help determining KPIs and collecting and analyzing data? Verseo experts are on hand. Call or write to talk about methods of measuring the effectiveness of your campaign.