Everything you need to know about the KPI indicators

In the online industry, just like in any other business, performance is associated with two key processes, management, and measurement. If performance management reflects the bond between the entity and the performance (defining and implementing the strategy, training and the performance measurement), measuring it focuses on identifying, tracking and communicating the results performance indicators obtained.

Thus, key performance indicators are measurements (or metrics) that reflect the performance (the failure or the success) of your business plan. In other words, Key Performance Indicators or KPI indicators are used to evaluate the degree of performance of a desired parameter (either enrolling for a newsletter, purchasing products/services or completing the contact form).

 

The difference between a value and KPI indicators

Firstly, a value can become a KPI indicator. But for this value to become a key performance indicator, it should have a huge impact on your business.

Let`s take for example an online store. The "average order value" parameter can be a key performance indicator only if its value is positive, representing the conversion rate of those who enter the site and place an order. Also, per click revenues, per visit revenue and so on can be other examples of values that can be used as key performance indicators.

 

In order to choose the best KPI indicators, you must:

1. understand your business and the objectives you`ve set;

2. turn business goals into achievable goals - you need an effective strategy;

3. once you've determined your goals, you must select one KPI indicator for each goal.

Any value that has the ability to impact the cash flow or the conversion rate, has the best chances to become a good key performance indicator.

 

These are the attributes of a good KPI indicator:

1. It is measurable - in other words, you have to make sure that the KPI indicator represents a mechanism or visible tool, ready to measure and to give you a full report on the business.

2. It has a huge impact on your business.

3. It is linked to marketing objectives - for example, if you want to raise the awareness of an online shop through a campaign, you'll consider the following indicators: the number of unique visitors, page views, the number of orders etc.

On the other hand, if you promote your online store through a social media campaign (to reduce certain customer support costs), key performance indicators include the number of visitors increases, the number of messages or link shares, comments, and so on. What we want to highlight is the fact that there are no universally applicable KPI indicators in online marketing or SEO.

4. It helps your business by redirecting you to basic actions based on your business trajectory.

5. It should be a metric you have in mind for a long time - in order for you to take the best decisions.

 

Types of KPI indicators

There are two major KPI indicators categories:

1. internal KPI indicators;

2. external KPI indicators.

Internal key performance indicators are those indicators that members of the SEO team or the online marketing team use to measure and optimize the online marketing / SEO campaign performance and that are not reported to clients/bosses/management teams because those indicators are part of the internal process.

Here are some internal KPI indicators which can be used to measure link building campaigns:

• Delivery Rate
• Open Rate
• Response rate
• Conversion Rate of outreach
• ROI of outreach

Although the bounce rate is considered a negative parameter, it can become a positive KPI indicator for optimizing landing pages, which will bring visible changes to your business. But it isn`t something to report to a CEO. During testing trials, when the bounce rate is high, you can see what users are looking for, what they don`t want to find in a landing page and how you can improve it.

 

Internal KPIs used to track campaign’s performance/outcomes

1. The number of sessions/visits - how much traffic is coming and from what sources

2. Goal completions - the total number of conversions

3. Revenue - in the case of an online store, you'll certainly want to know which traffic source generates your revenues

4. Goal conversion rate - the percentage of visits that resulted in goals conversion

5. eCommerce conversion rate - the percentage of visits that result from an eCommerce transaction.

 

KPI indicators used to track content consumption:

1. Pageviews;
2. The average session duration per site/page - this value highlights some interest/disinterest in the content published. This means that if a visitor reads more pages, it may indicate that the visitor found the information he needs or that he is undecided and would like to thoroughly inform himself about the products/services you offer. Usually, this KPI indicator is analyzed only in association with the average time spent by a user on the site - to see if your content got the attention/interest of visitors.
3. The bounce rate.

 

Engagement KPI indicators:

1. pages covered / session
2. unique social actions - Twitter, Facebook, Google Plus and LinkedIn.

On Twitter, you can turn the number of followers into a KPI indicator only by correlating their activity to your revenues, costs or increased conversions. For example, if you have an online store and you post a new product on Twitter, and those who follow you will buy it, then you will have a positive KPI indicator. Even so, you must be able to correlate the number of followers with the conversion rate, to prove this correlation has a positive impact on your business.

When we talk about Facebook, things are a little different. Even if you have many fans, if they don`t make conversions, they can`t be considered KPI indicators. It`s not very important how many fans you have (if you own a page), but how many of them click on the site and either buy your products or register for a newsletter or anything that can be considered a key performance indicator.

Although many SEO and online marketing specialists will not agree with this statement, an increase in Google rankings can be considered a KPI indicator. A site may go up or down the ranking, depending on the efforts made by the SEO specialists: as long as the activity is more serious, the more the site can stay on the first results pages of a search engine.

Also, it`s good to know that when you connect to your Google account, the search experience may vary, because some random sites appear higher than others, depending on the number of frequent visitors. In this sense, it`s good to take a look at weekly or monthly searches and also at trends in SEO. That helps a lot by keeping a better track in order for you to understand how you can turn your increased rankings into key performance indicators.

Goals in Google Analytics. Setting goals in Google Analytics in order to measure the number of conversions made by visitors is a common SEO practice. Depending on how they are configured, final conversions can be measured (a pop-up with "thank you for registering" can be a key performance indicator).

According to browsing trends developed by Google, a user covers on average about 3-4 pages/session and he spends about 2-3 minutes/site. These variables are determined by a number of factors, including the quality of the information and its accessibility (meaning you don`t have to look too much to find out what you`re looking for), the link building strategy, the website optimization (desktop and mobile), the loading speed etc.

Analyzing the KPI indicators using Google Analytics will help you see the development dynamic of your site in the long term, through which you will see how the site evolved over time, what information did the visitors search and what were the stagnant periods (besides holidays, during which all traffic is affected). On the other hand, Google Analytics helps you establish and track certain actions that lead to conversions, such as purchasing a product, downloading a PDF commercial offer, registering for a newsletter, sending an online order etc.

If you want to consider the conversion number a KPI indicator, you can set goals for the contact page, newsletter registration, or whatever else you are interested in. This way, the SEO optimization campaign will increase your site's visibility on targeted keywords, it will bring more relevant organic traffic or anything else that enables your conversion. Measuring KPI indicators over time and comparing against other variables such as site changes, traffic seasonality and trends, and search engine algorithm updates will allow you to accurately measure success and determine the best course of action.

Types of traffic sources:

Get used to segment the traffic sources and the specific environments (direct websites, email, customized campaigns etc.). For example you can use Google URL Builder for a better tracking of the customized campaign parameters. These are the source channels of the site traffic:

• Direct traffic - when visitors have typed the URL. Example: www.iagency.ro.
• Organic search traffic – when visitors discover your website by searching a keyword in a search engine (Google, Bing, Yahoo) and then click on your website.
• Referral traffic: when users visit your site by clicking on a URL on another website.
• Social media traffic – when visitors come to your page from Social media platforms (Facebook, Linkedin, Google+, Twitter).
• Paid Search traffic – when users visit your site after clicking on a Google AdWords link.

 

External KPI indicators are those indicators that have a huge impact on a business. Here are some examples of external KPI indicators:

1. Average Order Value;
2. Conversion Rate;
3. Revenue;
4. Revenue per acquisition;
5. Cost per acquisition - when someone buys something from your site, that will cost you. In other words, if you invested $ 100 in online promotion, you had 500 visitors and only 10 of them have bought something from you on the website, you should change your strategy.
6. Task Completion Rate;
7. Goal conversions.

 

Instead of closing, we can tell you that KPI indicators must be anchored in the business dynamics and typology and they must illustrate your company goals. Only so, the KPI indicators set:

K = deliver competitive advantage, linked to the strategic objectives;

P = are tied directly to performance, clearly measured, quantified, with preset influence causes;

I = ensure comparisons to various references, future-corrections oriented and they don`t explain historical events

will be a wonderful dashboard.