In the world of business, especially small/medium size business, there are very few things that are set in stone. Of the things that are, even fewer are in the category of “indisputably needed to succeed”. Key performance indicator (KPI) measurement is essential to plan, track, and achieve your goals.
How to Use KPIs to Grow and Dominate Goals
KPI measurement and selection will help navigate the competitive world that confronts businesses 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 business to business. That does not change the fact that success is the ultimate goal.
A business needs to understand the numbers behind the scene in order to achieve that success. KPI’s make that possible.
Set Your Long Term Business Objectives
Before you create metrics and start tracking KPIs, you need to know what you want to accomplish from it in the long term. At Cazbah, our IMCs’ goals are to understand their clients’ business objectives in order to trace that back to their digital marketing performance. Planning now for the future of your company is essential. What do you want to do? Where do you see your company 20 years down the road?
There are several options:
- Selling the Company Outright
- Transfer of Ownership
- ESOP – Employee Stock Ownership Plan
- Management Buyout
All these options will affect how you run your business and determine your long term and short term business objectives. Those business objectives should determine what your KPI’s (Key Performance Indicators) are. In the end, all of these business objectives and KPI’s map back into your digital strategy.
Effective KPI Criteria
In life, you earn things with three forms of currency: time, money, and energy.
Be sure that your use of KPI, 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 this sole purpose, 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 complicated pen and paper method if you are 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.
An Approachable Approach
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. Being goal oriented is not a required ingredient to succeed if you have a strong and self propelled recipe for success as a foundation.
Due to the complex differences between businesses, it’s 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 cobble together something that works for you. It’s stressful, but it’s honestly the only way to be certain that your interests are cared for and protected.
Because internet marketing is also high up on the list of necessities, any solid information in this area will almost always be useful to your business. From there, you should be able to easily take your newfound skills and apply them elsewhere.
Goals in Analytics
Each KPI will tell you how your business is performing in a set category. What’s difficult about this is that category is whatever you choose. Once you know what your KPIs are, you need to decide what to measure. 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 we to measure 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 do not tell the whole story.
Proper use of KPI’s lend a revealing light to every aspect of 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.
Track and Report
KEEP TRACK OF EVERYTHING! I am amazed that companies who have large advertising budgets don’t measure the performance of their campaigns. This is where some good planning and Google Analytics come in to save the day.
Here is a great, concise guide to creating tracking codes.
Accurate and convenient data tracking will be your bread and butter. Without any measurement, it’s going to be exceedingly difficult to choose the correct KPI’s to support or develop your business goals. Some of the most successful businesses keep track of things that are so seemingly minuscule that they sound fake. Surprisingly, these minutia can end up creating hundreds of thousands to millions in profit.
Don’t just keep track of sales and revenue numbers, keep track of everything. If you find an indicator that is difficult to track, but you believe it may be a game changer, then find a way to measure it as efficiently as possible.
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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