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KPI stands for Key Performance Indicator and is a measurable value that indicates whether a company is achieving its business goals and is commonly used to analyse whether a company is meeting the targets it has established for different strategies.
KPIs can be defined for high-level strategies, which focus mainly on the overall performance of the company, or they can be defined as low-level when they focus on specific processes from different departments such as HR, marketing or sales.
If you are tackling digital marketing, setting some KPIs might be a good idea to measure results and check what is working for your business and what should be changed. Here are a few quick, simple tips to keep in mind if you are planning on doing this.
Set metrics that matter for your specific business
Usually people tend to do some research on what are the most-used KPIs for a specific department to help them define theirs. Although this can be useful, you should start by thinking about what you want to measure for your specific business and work on that basis.
This is important because often when you search online the results that show up are for big companies that usually expect higher numbers and higher conversion rates that are just not realistic for a smaller business.
If you start off by thinking about what you would like to have as an outcome, or what results you believe are realistic, it will be much easier to set KPIs for whichever department it is. The bottom line is: don’t fit your business to others’ guidelines — stay true to your own path.
Define your SMART KPIs.
Once you have decided what you want to achieve, it is time to actually define the KPIs you are going to use. To do so, you should follow the SMART criteria, which focus on being Specific, Measurable, Attainable, Relevant and Time Bound.
You can do this by answering a few questions about the goals you are setting and see whether your approach fits the following criteria.
- Is you goal specific? To make sure you have all the information you need about why a goal did or didn’t work, you should know exactly what you’re measuring, so make sure you keep it specific.
- Can the progress towards that goal be measured? KPIs are based on metrics and analytics so you should make sure that they are easily measurable.
- Is your goal attainable? You should keep your goals as realistic as possible. Yes, you can be ambitious and aim high, but that doesn’t mean you should pick impossible KPIs.
- Is the goal relevant? You shouldn’t try to define a lot of KPIs. It’s better to keep their number smaller and more relevant, so make sure you actually need to be measuring a particular goal to avoid wasting your time and resources.
- How much time will it take? Every KPI should have a well-defined time frame. To do this, you should think about how much time it will take for until you have enough data to analyse its performance, and set an end date.
- Lastly, keep in mind that KPIs are a work in progress and should be always evolving. Start small and see what you want to measure and then iterate based on that.
Do you need help setting your KPIs? Let us know how we can help!
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