One of the best practices for a successful digital marketing campaign is setting tangible, reachable goals for success. Although metrics and data analysis provide insight into the success of a given campaign, they only provide partial insight into campaign progress. One best practice for digital marketing campaigns is establishing solid Key Performance Indicators (KPIs) that thoroughly document and mark progress toward those goals.
What are KPIs and Why Do They Matter
Key Performance Indicators (KPIs) are key quantifiable indicators of progress towards an intended result. Companies frequently use KPIs to determine and measure success around operational, financial, and strategic initiatives. KPIs focus an organization’s efforts around critical business processes and outcomes and guide more effective decision-making. Other reasons why KPIs matter include
- The ability to measure progress over time and make adjustments when necessary;
- Enabling professionals to scope data to become actionable;
- Fostering data-driven decisions based on available information; and
- Improving collaboration and communication within an organization.
KPIs have several key characteristics:
- Relevant to the organization’s objectives;
- Measurable and quantifiable;
- Achievable and realistic in scope;
- Time-bound: and
- Provides Clarity.
Types of Marketing KPIs
Like other business fields, digital marketing relies on KPIs for various reasons, including assessing strategic effectiveness, Although digital marketing professionals adopt KPIs within their strategy, only 23 percent of them are confident that they are tracking the right ones. Marketing KPIs also allow marketing professionals to justify their efforts to upper management and clients, track results more effectively, and make more strategic decisions.
Adopting appropriate KPIs for digital marketing campaigns is critical for overall success. Some examples include
- Click-thru Rates
- Customer Acquisition Cost
- Return on Investment (ROI)
- Contact-to-Lead and Lead-to-Contact
- Customer Retention Value, and
- Marketing Revenue Attribution
KPIs vs Metrics: What’s The Difference?
Knowing the difference between KPIs and metrics is as simple as knowing the difference between the journey and the destination.
Metrics refer to a specific quantifiable goal for a particular business activity expressed as numerical data. Metrics usually refer to specific data points and take a lower-level perspective on specific business or department functions and serve a more tactical function.
Although they may have a specific target, KPIs refer to specific quantifiable goals towards strategic organizational goals. KPIs take a “big picture” perspective to business processes, and are crafted in a similar fashion to SMART goals. KPIs focus on key strategies and operations, while metrics focuses on specific business functions.
Effective Vs. Ineffective KPIs
Key Performance Indicators (KPIs) can play a valuable role in determining the effectiveness of digital marketing campaigns. Knowing the qualities that make KPIs effective in campaigns will assist in refining and reframing marketing strategies.
Ineffective KPIs share one common characteristic: they often focus on unclear or irrelevant information that does not fit business goals. KPI worst practices include formulating them without an end goal, focusing on irrelevant information and data while being vague and easy to manipulate. KPIs should focus on measurable changes in business function that can be easily monitored rather than simply “raising the numbers”.
Effective KPIs, on the other hand, have relatively simple goals despite their strategic importance. KPI best practices include making them actionable, attaching them to specific goals, limiting the number of KPIs being monitored, and making them timely to current marketing efforts.
Matching KPIs to Business Goals
Finally, matching KPIs to goals can be challenging since the two are often used interchangeably. However, goals focus on a specific outcome while KPIs focus on the proximity and progress towards achieving particular goals.
Aligning KPIs to business goals starts with the initial process of determining appropriate performance indicators for specific business functions. Aligning your KPIs to your company’s current stage of growth is critical, focusing on both leading and lagging performance measures to provide a more thorough view of strategic progress. Determining when your KPI does not reach its target provides an opportunity for realigning and reconsidering KPI targets and goals.
Author: Gordon Dymowski
Author: Gordon DymowskiB2B Social Media Marketing Consultant/Copywriter
Gordon Dymowski is a B2B social media consultant and copywriter working with small to medium-sized businesses around audience engagement, lead generation, and driving revenues. Gordon has assisted various organizations in social media strategy, engagement, and analytics with a specific focus on healthcare, technology, and mission-driven ventures. He is also a fiction writer who has written for various independent publishers.
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