Having goals for your business or organization is good — having specific goals that allow you to measure your progress is even better. This is especially true when it comes to your marketing, to make sure that you are undertaking new projects, or adjusting old strategies, in order to achieve specific benchmarks.
The specific goals you set are called Key Performance Indicators (KPIs) or Key Success Indicators (KSIs). These are like super-charged metrics, because of their tight focus and their strategic use.
There are three main reasons to create and use KPIs:
- To evaluate performance: to learn what’s working and what isn’t, and make changes to improve.
- To demonstrate compliance with external standards, whether they are mandatory (industry regulations) or voluntary (environmental impact or charitable giving).
- To control and monitor staff: these should be implemented carefully. Since employees are apt to be more concerned about delivering on what is measured rather than on their actual performance, top-down KPIs can be counterproductive.
Performance evaluation KPIs are the most common, and they’re the ones marketers find the most useful. It’s clear how you can benefit from them: data on customer retention or the percentage of preliminary inquiries that convert to sales provide clear indications of the health of your business, and data on traffic make it clear how effective your website is, both as a communications channel and as a sales tool.
A good KPI is SMART:
- Specific: Instead of a vague goal like “increase website traffic,” you should create a KPI that will help you track the specific activity that will most benefit your business. This might be to increase the number of visitors weekly, the time spent per visit, or the average number of click-throughs.
- Measurable: Even “customer satisfaction” can be quantified, if you set a goal like “raise average survey score from 3.2 to 3.8.”
- Attainable: Goals should be realistic. It’s frustrating, not inspiring, to set a goal of a billion dollars in weekly sales.
- Relevant to the success of your organization or project. You could calculate the percentage of your customers who have last names beginning with the letter “M,” but why bother?
- Time-bound: Creating deadlines keeps you on track to meet your goals. It’s easy to back-burner long-term objectives when you’re busy with day-to-day problems.
Remember, KPIs are not just metrics counting anything that can be counted, because not all data is useful in evaluating the success of a campaign. KPIs are metrics with muscle. Start by identifying what your issues are, then gather data that will illuminate those issues, instead of gathering the data first and then trying to figure out what it might signify.