“What KPIs should we be looking at?” is a question I’ve discussed with clients and colleagues.
The short answer: all of them.
The long answer: The ones you should really be analyzing and optimizing for is entirely dependent on your overall business strategy.
That might sound like a cop-out answer, but just bear with me.
Digital marketers, like myself, have a plethora of tools available for conducting marketing analysis and measuring performance — think of everything from Moz Pro, Marketo, and Cyfe to more popular ones like Google Analytics and HubSpot.
And with all those tools comes a wealth of data flooding in about your business. So, picking which metrics actually represent your organizational goals is not only crucial but also sometimes hard to do.
Key Performance Indicators, or KPIs to you and me, are important benchmark metrics for measuring marketing performance.
But, today, with digital marketing tools and advanced analytics for online performance measurement and analysis, the question of what your KPIs should be has become a bit more nuanced — like a Christopher Nolan movie, or why pumpkin spice-flavored coffee is so popular (plot twist: it’s gross).
When it comes to your digital marketing, there’s a heap of data available for you to study — including post views and site visits, followers, impressions and reach, clicks and click-through rate, conversions, shares, and so on.
Let’s say your overall organizational goal is to increase sales (which most of you will probably have somewhere on your company to-do list), and marketing has been tasked to increase awareness and support that endgame. Then, measuring how many followers you have on your social media accounts isn’t exactly a KPI. How many Twitter accounts have you seen that have 10,000 Followers, but extremely limited engagement on each post? In this case, the number of followers is a vanity metric1.
Vanity metrics inflate the perceived performance value of your campaign or marketing effort. They sound nice and make you feel good, but they give you a false sense of progress, and are a pitfall for both startups and major companies alike. They largely stem from a lack of differentiation between what is simply a marketing stat and what is an actual KPI.
What you want are actionable metrics. In other words, metrics you can show directly tie to your organizational goals (e.g., increase sales) — those are true KPIs.
To illustrate, if you can show:
And from there,
Then, what you have are KPIs that tie your social media spend back to a true return on investment. Those KPIs are directly participating in increasing sales.
Check out the example table below provided by the lovely people at Smart Insights. It offers examples that differentiate indicators from true KPIs2.
Remember that certain metrics support KPIs, but are not the KPIs themselves.
Also, ignore vanity metrics or metrics you have no influence over.
After all, the next step after measuring your performance is to optimize, improve, and scale up your marketing efforts. So, you’re going to want to focus on and raise the numbers that contribute to your goals and get rid of those that don’t.
Ask yourself if the numbers you’re looking at actually measure your performance in relation to your marketing or business goals — those are KPIs.
References:
1 https://techcrunch.com/2011/07/30/vanity-metrics/
2 https://www.smartinsights.com/goal-setting-evaluation/goals-kpis/choosing-effective-digital-marketing-kpis/