How to choose the right Marketing KPIs
Choosing the proper key performance indicators (KPIs) is an essential part of Growth Marketing. It makes sure your business can achieve not only your strategic goals but have a measurable improvement. However, with a large amount of data you can easily access, it can be overwhelming to choose the best KPIs with the most value. To make the right choice, you need to think about your business and what exactly you want and need to measure.
What are Marketing KPIs?
KPIs are individual units of measurement or data points that provide mathematical input about your business’s performance relative to a specified goal. These are the most important metrics in any Product Strategy and Growth Marketing since they can make you understand and evaluate how your business is performing. And because of that, choosing the right KPIs is one of the most critical decisions you need to make for your business to succeed.
A good set of KPIs to track will allow you to measure your business's health and make any strategic decisions more efficiently. You will quickly identify any business area that may need improvement and take the according to action. And over time, it can not only make sure you reach your goals but actually enhance your overall performance.
The elements of a good KPI
When choosing a KPI without really considering your business or goals, you will end up with a rather trivial and superficial set. And since KPIs are so crucial to the success of your business, they can’t be chosen randomly and for that require some thought. With that said, a good KPI should possess the following attributes:
- Relevant to your goals - a valuable KPI must be directly related to your business’s overall goals and objectives.
- Align with growth stage - it should reflect the current stage of your business, but also take into account its growth.
- Substance - A KPI must be specific and focused on important and detailed metrics.
- Quantifiable and measurable - It must be able to be accurately measured on a regular basis, in order to track a business’s progress regularly and with confidence.
- Actionable - a good KPI should clarify to you where to take action to improve your business's performance and eventual success.
Choosing your Marketing KPIs
Measuring your business performance is crucial, but focusing on the wrong indicators can be destructive in the future. The first step in finding the best metrics for you is to reflect on what your business is working towards. You need to identify your strategic goals and specific objectives and then set achievable and actionable targets. This process is aspirational. It’s about what you envision for your business and having a well-established vision, mission, and values can really help.
Your KPIs must be grounded by your business’s goals to measure its progress accurately. And since your KPIs are meant to support your business goals, the more specific the goal is, the better you can choose the right KPI.
There are many different types of KPIs, but they typically revolve around increasing sales, process and service improvement, and customer satisfaction. As mentioned before, it really depends on your goals and what stage your business is in. For example, while startups will focus on KPIs related to exponential growth in organic traffic, more mature companies will probably put their efforts into improving return.
Filter and Focus
You can track and measure everything with very detailed metrics in the current digital age, leaving you with dozens of potential KPIs to choose from. And because of this, companies often end up with many KPIs, leading to confusion and lack of focus. So rather than choosing several metrics to measure and report on, it’s better to focus on just a few key metrics.
However, this selection can be complex and difficult to do, especially when applied to your business's subjective or vague areas, like customer satisfaction or product value. As mentioned before, the selection mustn’t be vague or superfluous. The point of having KPIs is to measure and improve your business’s performance and help you reach your strategic goals.
When choosing KPIs, you will probably want to start with the industry-standard metrics, keeping in mind that it’s more important to choose those more relevant for your specific situation and business. It would help if you only chose the KPIs that are the most reflective of your strategic goals. Your goals are unique to your business, and so should your KPIs be.