KPI stands for Key Performance Indicator. The term covers all the metrics used to measure the performance of a given organization, activity or process, such as an advertising campaign.
What are KPIs?
In practice, KPIs are the indicators that track how a business is performing.
They are expressed as numbers or percentages. They can be used both as a control tool and as a planning tool.
KPIs do, however, have specific characteristics. To qualify as KPIs, they must be:
- Quantifiable: measurable and expressible as a number.
- Practical: easy to calculate. Businesses need to act quickly.
- Time-bound: measurable within a set timeframe, with an operational deadline.
- Forward-looking: comparable over both the short and long term.
Why use them
Key Performance Indicators are strongly recommended, for many reasons.
First and foremost, they let you understand, with hard numbers, how any kind of performance is developing. Put simply, KPIs provide reliable information: information you can use to improve your business strategies.
Measurement is the key. If you can’t measure it, you can’t control it. If you can’t control it, you can’t manage it. If you can’t manage it, you can’t improve it. H.J. Harrington
So what does all this mean? Nothing complicated. Simply that KPIs let you check the effectiveness of your actions at any time, and correct them if needed.
What are the key marketing KPIs?
The starting point is that every company should tailor its Key Performance Indicators to its own identity and goals.
That said, digital marketing has its own specific KPIs: standard criteria for assessing the success of any advertising or sales campaign.
Here are some of the most widely used:
- Number of conversions Depending on the business model: sales, email contacts, sign-ups and so on.
- CTR (Click-Through Rate) The percentage of clicks generated by an ad.
- Bounce rate The percentage of users who leave a website within a few seconds of landing on it.
- ROI (Return on Investment) In other words, the return generated by a given capital investment.
How to measure them
The number one ally for anyone running an online business is Google Analytics. With this tool you can track the main KPIs easily, quickly and, above all, for free.
If you don’t have the time or any web experience, turn to industry professionals. They’ll be able to give you useful advice.