Terrible pun aside, your business's success relies on measuring its performance beyond page visits or downloads.
A simple way to do this is by setting key performance indicators (KPIs).
These clever little indicators give you a comparison point by which you can gauge if each bit of your business is performing well. They help you answer the question: ‘How can I tell if this bit’s working?’
By using KPIs you have an excellent tool to:
- go beyond using one simple metric, like number of downloads
- work towards achievable targets
- see where you can make improvements
- compare your performance to the rest of your market
- show investors that your business is worth their money
What should I measure against?
A great starting point is benchmarking your goals against your key competitors.
But where can you find this sort of information?
There is tons of market and industry research published every year – a snoop around the internet will give you some basic base rates to get started. As your company matures, you’ll get to know your market better and gather your own data. Also, your floods of sales will help you create KPIs from internal data – we’re selling 10% more apps than last year! Sweet.
It’s not all about the money, money, money
Although the cash coming in is one of the most important KPIs to measure, it’s not the only one. Between page views and cash, there’s lots to consider.
God-like marketing genius Dave Chaffey suggests thinking in terms of three themes when devising your KPIs:
- Volume – how much of your potential audience are you serving? How many of your social followers are clicking through to your site?
- Quality – are your interactions with customers working? Are you incentivising them to act?
- Value – how much money is coming in? Where are the opportunities for repeat sales and returning customers? How many do you get?
Don’t measure what you can’t change
Your KPIs will only work if you have the power to influence the activity you’re measuring.
There’s no point trying to create a performance measure for sunshine. Unless you’re an evil genius, hell bent on creating a weather machine, no matter how important the sun is to your product, you can’t control the amount the sun will shine.
You can set a performance indicator that measures the percentage of people who bought your sun strength analyser from your ‘Grab a sun hat’ email campaign, compared to your ‘Have you got the correct factor sunscreen?’ ad words campaign. And then compare them to how last year’s ads performed.
Why are KPIs important?
A recent article in Marketing Week has accused my tribe of ‘living in La La Land’ because lots of us can’t tell the difference between page views and sales.
Page views are great, but no one gets rich on page views alone.
So don’t fall into the trap that 77% of marketers make. By knowing that page views is just one way of measuring your success, you can map out what your key objectives are. And how you will make sure you’re meeting them!
Another horrid clothes pun to end
KPIs will help you ensure that each piece of your business is working well. You will be able to easily see the bits that work well and the bits you need to work on.
In fact…like a suit, your business is made of lots of different sections. For it to all fit together you need to measure each bit for the job it has to do. Stitch them together and you’re dressed for success!
And for the above sentence: My. Sincere. Apologies.