How do you measure the success of your marketing campaigns? With all the data available, how do you focus in on what’s important for your business goals?
The answer is an acronym you should know: KPIs, which stands for key performance indicators.
KPIs are individual metrics you associate with an overall goal. For example, say you have a blog article that’s meant to motivate people to sign-up for your newsletter. Time-on-page would indicate if people are taking the time to actually read the article or if they’re skipping it. Time-on-page is a KPI for your newsletter sign-up goal.
The goal of KPI analysis is to identify weak spots in your conversion funnel. Often, it’s one weak link in the chain that diminishes goal performance, so being able to find it is an indispensable marketing strategy.
An established way to set-up KPIs is using the SMART strategy, meaning specific, measurable, attainable, realistic, and timely.
Many small businesses planning their digital marketing fail to set KPIs at all, much less SMART ones. Here is a breakdown of how you can establish SMART KPIs for your business. Follow these steps, and you’ll focus on the right performance goals in a way that helps you reach your marketing goals.
For KPI measurement to be of any use, the indicator must be specific to the overall goal. Also, you want to associate that with a particular behavior from users. For example, say you test two headlines on landing page. One has aggressive sales language, the other is more informational. What you’re specifically analyzing is the visitor’s responses to each type of headline. If you get higher page exits from one, you know that headline is not connecting with your audience.
Specific KPIs we look at with online marketing include search rankings and ad exposure, visitors by channel, conversion rates, click through rates, landing page bounce rates, social media engagement and time on site.
Here is an example of top line analytics on the Marketing 360® dashboard:
With web marketing, being specific about a KPI means looking at the individual tactics and identifying weak spots. A break in one area of your sales flow can mean losses for your most important conversion goals.
Digital marketing provides many tools for measuring KPIs. In fact, for the novice marketer, digital tracking usually provides more data than they can use.
To avoid data overload, measure only what is key to your overall goals. It’s easy to get caught-up in all the spreadsheets and pie charts marketing software can generate. Fall back to being specific. Ask if the data indicates important behavioral responses from your audience and if it fits into your conversion funnel overall.
The numbers, by themselves, won’t indicate much. Work with your marketing executive to analyze measurements and put the numbers into context.
Also keep in mind that as precise as digital marketing numbers are (6.68% conversion rate), they are not always accurate. You are, after all, measuring human behavior.
For example, a consumer’s search path may involve their phone, work computer, and desktop computer, using Safari, Chome, and Firefox browsers. During their buying process, they may clear their cookies (which track their behavior) or search incognito. So what search term first exposed them to your brand? How many times did they interact with your content? What was their conversion funnel? There is no way to measure user’s behavior across devices and browsers.
Even with digital marketing, we must make certain assumptions. Because of the human element, marketing will never be an exact science.
But that doesn’t mean you won’t gain valuable insight from your data measurements. The best marketing, simply put, does more of what works and less of what does not. The only way to make those distinctions is to measure what you’re doing.
There is no purpose in setting goals (much less measuring data) that you have no chance to achieve in the first place.
Consider two important factors with digital marketing KPIs: budget and time.
For example, it does no good to set paid advertising ranking or traffic goals if you can’t compete against your competitor’s bids on the auction systems. Likewise, you won’t attain high organic rankings for competitive keywords in a matter of weeks – or probably even months.
Preparation is the key to attaining your vital KPIs. Have the right budget in place and prepare to work at a net-loss until you gain traction. Only set goals where you have the resources to play in the competitive marketplace within understood time-frames.
Some entrepreneurs think they’re going to compete against Amazon, Craigs List or Ebay. While the internet can even the playing field when going up against larger competition, it doesn’t mean you can do anything. Finding a niche product line and a targeted audience is imperative to setting realistic KPIs.
Time allotments are also a part of being realistic. Online marketing in the SMB space is rarely a get rich quick scheme. You must be realistic about the work you have to do and the time it will take.
For example, it’s not realistic to think you can measure KPIs related to your website with the assumption that you got everything right with your design in one shot. Some people fall in love with their initial design and resist changes. In fact, you should assume you’ll need to modify design elements based on specific KPI data.
10% bounce rates are unrealistic. 50% conversion rates are unrealistic. Understand the typical baselines for digital marketing to set realistic expectations.
We’ve already alluded to the time element in online marketing. You’ll generally need 6 months to a year to get a clear picture of your overall KPI performance.
You measure and modify over time. Build your audience and brand credibility over time. Gain search and referral exposure over time.
The biggest error when it comes to setting KPIs in SMB digital marketing is impatience. This leads to the mistake of pulling out of marketing campaigns before the KPI analysis can give you the full story.
Worst is when the campaign was on its way to success, but the business owner failed to manage resources so the effort could come to fruition.
If you set your KPIs in a SMART way, you can avoid this and other costly mistakes. KPIs allow for informed modification that lessen the risk of a marketing venture. They let you take assumption and turn it into fact.
Most importantly, they create success markers. Like a hiker on a long trail, you may feel tired and beaten. But when you see a cairn marking the way, you know you’re moving in the right direction. SMART KPIs serve the same purpose.