In the world of business, especially in a small or medium size business, there are very few practices that are set in stone. Of the things that are, even fewer are in the “indisputably needed to succeed” category. That said, it’s essential to know how to create and measure key performance indicators (KPI) in order to plan, track, and achieve your business goals.
How to Create and Implement KPIs
KPI creation and measurement will assist with navigating the competitive world that you confront every day. Think of them like your pirate map to buried treasure. Sure, along the way you’ll have to avoid quicksand, disarm traps, and fend off the Kracken. Eventually, however, you’ll find yourself sitting on a beach holding a bottle of rum as you let gold coins fall through your fingers.
The reason for this is that every business is opened with the same goal in mind, success. It’s true that success may be defined differently from one business to the next. However, that doesn’t change the fact that success is indeed the ultimate goal. In order to achieve that success, a business needs to understand the numbers behind the scene and KPIs make that possible.
1. Set Your Long Term Business Objectives
Before you start creating and tracking KPIs for your small business website, you need to know what the long term goal(s) is that you’re trying to accomplish.
Planning now for the future of your company is essential. What do you want to achieve? Where do you see your company 20 years down the road? It’s imperative you are able to answer these types of questions. The long-term vision you have for your business will affect how you run your business now, and it determines your long and short term business objectives. Those business objectives will ultimately determine what your KPIs are, or what they should be.
2. Effective KPI Criteria
In life, success is earned with three forms of currency: time, money, and energy.
Be sure that your use of KPIs, whether it has been in place for decades or you just started two minutes ago, does not waste any of the three.
It takes time to accumulate the experience and knowledge needed to properly focus your results. There are websites and software dedicated to the sole purpose of this, but if you don’t know what you’re doing, it’s a bit hit or miss. You could even create your own system using some pen and paper method if you’re so inclined. Either way, put in the effort it takes to learn everything you need to know, or save your time and energy by hiring a pro to teach you the ropes.
3. Evaluate Your Business Performance
For starters, evaluate your own unique situation. You know yourself and your business better than anyone else. Use that to your advantage and be honest! Where do you succeed at meeting your goals and where do you fail?
Sometimes the answer is glaring and sometimes it’s not. If it is glaring, that’s actually going to be a good thing most of the time. It means you’re setting and keeping track of goals. Don’t worry if it’s not that obvious! This could be the result of many factors.
Due to the complex differences between businesses, it’ll be near impossible to find the perfect guideline for your specific case. If someone is telling you “this will make you succeed one-hundred percent”, RUN! It’s most likely click bait.
Instead, you will have to take bits and pieces that apply to your situation and fuse together something that works for you. It can be stressful, but it’s honestly the only way to be certain that your interests are cared for and protected.
4. Create Goals in Google Analytics
Each KPI will tell you how your business is performing in a set category. However, KPIs differ across businesses. You need to know what makes your particular small business successful in order to create the right type of key performance indicators. Once you know what metrics determine your business success, you can then start tracking that information. In Google Analytics, those measurements typically become something called “goals”. There are an infinite number of metrics to measure. This is where a great business will outshine an average one.
Some goals you can consider measuring might be:
- Online form completions (i.e Contact Us, Request for Quote)
- Phone calls generated from the website
- Downloading Documents (i.e. SDS sheets, Sell Sheets, Whitepapers)
- E-commerce transaction
- Engagement metrics – Bounce Rates, Pages Per Session, Avg. Session Duration
- Increasing Brand Mentions
- Increase Review Ratings
A great business will create a set of indicators that are not variable or affected by any other factor, while an average business will create general indicators that don’t tell the whole story.
Proper use of KPIs lend a revealing light to every aspect of a small business. From which terms have the biggest effect on your SEO to the most profitable sales rep you have on the floor, you will have the cold hard numbers. Armed with this valuable information, you’ll be able to make adjustments as needed to better market your website and reach your target audience.
4. Track and Report
KEEP TRACK OF EVERYTHING!
I’m amazed by the number of companies who have large advertising budgets that don’t measure the performance of their campaigns. This is where some good planning and Google Analytics come in to save the day.
Accurate and convenient data tracking will be your bread and butter. Without any measurement, it’s going to be exceedingly difficult to create KPIs to support or develop your business goals. Some of the most successful businesses keep track of data that is so seemingly minuscule that it sounds fake. Surprisingly, this can end up creating thousands to millions of dollars in profit.
Don’t just keep track of sales and revenue numbers, keep track of everything!
It may seem counter-intuitive, but at this point you’ve surely realized that sometimes spending money saves money. Your time and energy is, in essence, potential income. Spending a small amount in the beginning could potentially save weeks of hassle or expose new opportunities you might not have discovered otherwise.
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