Determining the appropriate KPIs is critical to assessing and optimizing the effectiveness of your digital initiatives. These criteria are used at all levels of an organization. KPIs are organised and assess long-term objectives, while monitoring short-term daily objectives. So, how do you establish your key success indicators? Our specialists tell you everything in the following sections.
What is a key performance indicator?
KPIs (abbreviation for Key Performance Indicators), or Key Performance Indicators, are numerical data used to assess the effectiveness and impact of digital campaigns and marketing strategies.
Marketing KPIs are thus useful information for management and decision-making. They will make it easier to demonstrate the return on investment of your marketing actions, as well as to develop campaigns and measures tailored to your business objectives.
These KPIs also provide the opportunity to accurately analyze whether a company is achieving its business objectives or not.
How to set the right KPI’s?
Start by defining a strategy
Having a well-defined marketing strategy is the first step in determining suitable KPIs. The objective is to target specific and realistic goals according to the strategic directions of the company, in order to achieve them. For effective KPIs, they need to be easily understood and quantifiable, so that decisions are generated rather than additional questions.
Identify your needs
In order to identify the strategic data groups needed to determine the appropriate KPIs, it is essential to ask the right questions that will facilitate the selection of relevant data.
What are the objectives of the current strategy? What criteria are used to assess the success of the company? What are the variables likely to influence the implementation of the action plan?
These issues will guide the strategy and inform decision-making while establishing appropriate indicators.
This means that daily operational KPIs and strategic KPIs must be aligned with the KPI of the overall business strategy objective.
Evaluate existing data
KPIs are derived from integrated data from computer services and systems.
It is therefore essential to carry out an audit of the existing data before starting any data collection. Subsequently, ensure that data collection is fully aligned with your strategy and adequately addresses the issues raised above.
Do you want to effectively manage your digital strategy and achieve your business objectives?
Determine the right measurement method
Once the data is collected, it is essential to find the right measurement methodology to develop new KPIs or adjust existing ones. The decision-maker must be able to use actionable data to generate value through a well-functioning decision-making computer system.
Employees must also be involved in the selection process to discuss the relevance of KPIs and assess them. The decision maker may use brainstorming techniques or the affinity diagram (KJ method) to stimulate the production of ideas and structure proposals.
Using SMART criteria can help you track your KPIs and make sure they fit your goals, are well designed and achieved:
- Specific – is your objective specific?
- Measurable – is your progress towards this goal measurable?
- Acceptable and Ambitious – is your goal achievable?
- Realistic – is your goal relevant to your organization?
- Time-bound – what is the timeframe for achieving this objective?
Find the best way to communicate your KPIs:
Key performance indicators facilitate the understanding of strategic actions. As a result, they are a crucial part of the overall corporate performance management dashboard. You can use tools like Data Studio or Google Ads to track the performance of your actions and their impact on results in real time.
It is important to present this communication in the form of visuals that explicitly illustrate the trends and variations observed in the data. Your company’s IT team and Business Intelligence department can offer simple means of communication to make data clear, accessible, and actionable.
The different types of KPI’s
For communication purposes, KPIs may include the number of mentions of the brand on social media, the open rate of emails sent to customers, the conversion rate of website visitors into newsletter subscribers, and the number of positive or negative feedback received from customers.
In terms of marketing, we talk about the conversion rate of website visitors into buyers, the open rate of email marketing campaigns, the number of leads generated by advertising campaigns, and the return on investment (ROI) of each marketing campaign.
On the financial side, KPIs may include gross profit, monthly revenue, monthly expenses, debt ratio and equity ratio.
For sales and commerce, these are the number of sales made per month, the conversion rate from leads to customers, the average time it takes to complete a sale, and the customer retention rate.
It is important to choose relevant KPIs for each company based on its specific objectives and to monitor these measures regularly to monitor the company’s performance and make informed strategic decisions.
Test the performance of the indicators
After defining your key performance indicators (KPIs), it is important to assess their efficiency.
KPIs are essential to improve your company’s results and gain a competitive advantage. However, some of these indicators may not be appropriate anymore, negatively impacting the company’s performance.
It is therefore crucial to analyse these indicators regularly to ensure their relevance. Select the ones that are the most consistent, optimize them and avoid “Vanity Metrics”, those seductive but useless indicators for the overall strategy.
To strengthen the competitiveness of your company, Eminence supports you in the implementation of appropriate KPIs to promote the evolution of your business by identifying the gaps between forecasts and reality.