Understanding KPI data and How to Use It — Part One
Just like understanding economics and wall street, comprehending digital marketing data can seem daunting and overwhelming. But it doesn’t have to be. Once you understand a few basic concepts you can analyze and adjust your efforts to increase performance and revenue through testing. Let’s get started.
We Know It’s Important But…
No need to go into how important this is — or should we? Looking at your business model from the lens of your customer needs can make all the difference in your success or failure as a business.
Digital marketing is complicated and requires heavy lifting, so organizations often put understanding their customers on the back burner.
It does take time and uses resources, but it is also so important for success. You wouldn’t open a restaurant and pick what your customers should eat, unless you were In-N-Out Out Burger and even then, they have a “secret menu” of five more choices.
Let’s look at ways to improve on what your customers want.
What is a KPI?
A KPI, or Key Performance Indicator is a quantifiable measure of performance over time of a specific objective. It’s really that simple.
Let’s say based on passed closed rates, you have determined, you need 10,000 qualified site visitors next year to close 15% of these site visitors for your B2B service. You have a KPI of 10,000 unique visitors to your site and a KPI of a 15% close rate of those 10,000 site visitors. Now you can work backwards from these KPIs to achieve those results with whatever strategies you are using to drive people to your site.
The more granular you get with your KPIs, the more metrics you can use to track your results across your end-to-end strategy. KPIs are used by all-sized companies because they work for any type of digital marketing performance analysis.
Website Traffic KPIs, The Holy Grail of Advertising
When you are starting out, how do you know your efforts are heading in the right direction? There are a lot of variables right? That’s why we put KPIs in place for these variables and break them down tied to our ultimate goals.
As mentioned earlier, total site visitors is one KPI. But another very important KPI is engagement time on your site which is a measure of user experience. The higher the engagement time, the more interested people are in your offerings. You see, early in your testing of a new website for a company people don’t know, you most likely won’t get a windfall in sales, but you can still measure KPIs that are a measure of early interest.
See where this is going? You want to measure the right KPIs all along the user path and increase performance of those KPIs through adjustments even if you haven’t gotten people to the purchase point yet.
Let’s say you are confident your ads are targeting the right audience, (more on that in the next email) and you still have a low engagement rate on the site of just a few seconds. That means people aren’t sticking around. So it’s time to adjust your home page to entice people to stick around and see what you have to offer. This is a simplistic explanation but 100% relevant to using KPIs for success.
So making slight adjustments to your home page/landing page and increasing your engagement time KPI can lead to more exploration of your site and eventually to sales. Remember, it’s called a user journey for a reason and we want to increase the KPI performance all along that user journey.
Engagement rates vary wildly across different industries so snapshot your engagement rate now and increase it through testing various adjustments on your website.
We’ll stop there for now and pick this up in the next email. You can do some homework on your own and research the most important KPIs for various business goals and think about how to measure them yourself. See you next time when we discuss ad campaign KPIs.
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Putting It All Together for KPI Success – KPI Data Part Three
