Home Digital Marketing What Is A KPI In Marketing and What Is It For? Basic Examples

What Is A KPI In Marketing and What Is It For? Basic Examples

written by Walter Ponce December 15, 2017

In this post I will go into explaining what are the KPIs in Marketing and how we should define these indicators within the scorecard of our company.

Analytics is probably one of the most complex parts of the marketing world and where KPI indicators will have a very important role.

In this post I will focus mainly on the KPIs related to SEO and Social Media, but I will also explain other examples of very common indicators. To finish the post I will talk about the main tools to measure engagement in Social Networks, as well as some examples of tools to measure your KPI.

What is a KPI and what is it for?

KPIs are indicators that help us measure and quantify our work, having previously defined objectives and activities that help us achieve these objectives.

The KPIs have been used in the world of economics and finance for many years with a single objective to improve the efficiency and productivity of one or a set of services.

The acronym KPI comes from “Key Performance Indicators” and translated into Spanish would be key performance indicators.

KPI vs Metrics do you know the differences?

Before getting into the key performance indicators, I would like to clarify the difference between KPIs and metrics.

In online marketing we can measure so many things that sometimes we can not distinguish which are the relevant metrics of a business.

That is why it is essential that you know how to distinguish between both terms.

The metrics at the end of the day are a unit of measurement with which we can know what is the evolution of a business.

And this is where the fundamental difference comes from.

The KPIs will be the most important metrics with which we will measure the health status of a project.

What are the most important KPIs?

For the above explanation to be clearer, let’s see an example.

Many people wonder what are the most important KPIs in marketing and really, the answer is simpler than it seems.

The most important KPIs are those that directly affect the achievement of marketing objectives.

That is, you should think about those metrics that directly affect your business.

Now, let’s see how to create the KPI indicators.

I always like to start from the marketing objectives and transform them into web objectives.

That is, as you see in the graphic, my marketing objective is focused on positioning, and translated to the objective of the web means that they find me in Google.

For this purpose, the examples of clearer performance indicators are: the organic visits and the number of keywords positioned in Google.

Once they have found me, my next objective will be to achieve visibility that transformed the goal of the web will be that they know me.

In this case, the examples of marketing indicators that will tell us if we are reaching our goal of visibility will be the new visits, the pages visited and the quality of those visits.

Is it clearer to you in this way how to create KPIs?

What you should do once you have established them is to create a chart of reports with the main KPIs to see a very simple way the evolution of your business.

Characteristics of KPIs

When establishing KPIs, you must always meet a series of conditions to be able to measure and compare over time in order to know the evolution of your business.

All key performance indicators must be:

Measurable: Although it seems obvious, a KPI must be measurable.

Achievable: The objectives that you set when choosing your KPIs must be realistic and achievable in the period that we have established.

There is nothing more frustrating than setting unrealistic KPI indicators and then feeling that the objectives are not being met.

Relevant: Choose only those most important indicators and discard those that the information they offer is uninteresting or relevant.

Periodic: The indicator should be able to be analyzed periodically (weekly, monthly, quarterly, etc.) depending on the periodicity that we have determined.

Specific: Choose only the most interesting part or aspect of the information collected.

Examples of KPI in Marketing

The decision of how I choose the KPIs should proceed on those indicators that really affect your business or company, but to facilitate your creation, here I leave an extensive list of KPI examples that you can apply to both your SEO and Social strategy.

Return on Investment (ROI)

We have to measure the revenues generated by our marketing campaign and compare them with the expense they entail.
Sales increase

The objective is to demonstrate that our marketing campaign is affecting an increase in sales.

Sources of traffic

The objective is to measure and evaluate the different media or sources where we manage to capture visits to the website of our business.

There are 4 types:

Direct traffic: Are those users who visit us by typing the url in the browser itself.

The more known and popular our brand on the Internet is, the more direct traffic we can get.

Reference traffic: Visits we receive through links on other websites.

This reference traffic can be classified as:

  • Visits that we receive through social channels.
  • Mention. Visits we receive through a link on a blog or similar website that you mentioned.

Organic traffic: Users discover your website when they make a query in the main search engines (Google, Bing and Yahoo).

In order to increase our organic traffic, we need to make a good SEO Strategy that helps us improve the visibility of our site in the main search engines.

Campaign traffic: These visits come from ad campaigns that we can do in different media, although the best known are ads on adwords, ads on facebook and ads on twitter, but there are many more.

Sales funnel

Very important aspect in Inbound Marketing, since understanding the process of how we get customers or sales is fundamental so that we can optimize it.

This conversion funnel thoroughly analyzes the process of acquiring customers, an aspect that will greatly help us to know how potential customers discover our product or brand.

The marketing funnel is usually divided into 5 stages: awareness, interest, consideration, preference and purchase, and with this we can know the conversion rates in each of the stages and extract what are our strengths and weaknesses that help us convert opportunities in sales.

Measuring the success rate

The objective is to measure the effectiveness of your actions that help you to achieve the objectives set.

We will measure the number of people who complete a specific marketing objective such as subscribing to a mailing list, and help us to know the conversion rate of users who reach the consideration stage.

Define specific marketing objectives, such as subscription to mail, sale of ebook, or any action that we are looking to get leads, and analyze the conversion total and the conversion rate, which is nothing but dividing the total visits by the number of read them.

There are many factors that can change or change this conversion rate, but as a rule the conversion rate is usually between 4% or 5%, although from my experience I can tell you that it can be higher sometimes, exceeding 10% of conversion.

What conversion rate do you get in your sales strategies?

Keyword performance

We have to analyze the ranking of our keywords to measure and understand the effectiveness of our SEO strategy, and especially in regards to visitor traffic.

In order to get leads we have to get thousands of visits to our landing page or website, but given the great changes in the algorithm and the volatility of the position of our rankings, it is important to pay special attention to:

1.- List of keywords. We have to analyze the evolution of the list of keywords that is capturing visitors traffic in Google.

You can use SEMrush to see the evolution of the last months of the keywords on your website that you have positioned on page 1 and 2 of Google.

2.- Position of each of the keywords. We will analyze the position that each keyword occupies, as well as its evolution of them.

3.- Increase the CTR. We will analyze the CTR of our post and pages, since we have to manage to increase the CTR as much as possible so that it will have an impact on a better SEO (Search Engine Optimization).

4.- Reduce the percentage of Bounce Rate. The first impression does count to improve SEO because if the user does not attract what he sees or reads in a few seconds, it is very likely that he leaves our page and with it we obtain a very high rebound rate.

To avoid this you have to pay special attention to the outstanding image and the content of the first paragraph, since you have to impact and hook the user to be interested in what you are seeing.

5.- Increase the average visit time. For visitors to stay many minutes on our website it is important that you follow the following tips:

  • Bet on quality because it is the key factor of SEO.
  • Use powerful images and infographics.
  • Give your content as much practicality as possible.

Other KPIs in content marketing:

Unique visitors

This KPI indicator in marketing gives us a standard metric since we can know how many people have visited your site or your content in a specific time interval.

Sources

Knowing our audience is very important so that we can focus more or less effort on a specific location.

With Google Analytics we can obtain information such as:

  • Demographic data of our audience with data such as age and sex.
  • Cities and countries that most visit our page.
  • You can know which country or city brings the highest ROI.

Visits from mobile devices

It is important to know how many users consult and read your content from mobile devices, as this is important to know if our website has a good responsive design.

Heat map of the users

I use 2 tools to analyze the heat map of the users to see which sites do the most impact; the first is CrazyEgg that allows us to create a heat map of our website, and the second one is Sumome, that we can see a heat map where visitors click.

Rate and range of the final action

This KPI indicator measures the effectiveness of our marketing campaign by paying our full attention to the last action performed by the user who visits us. These are some of the final actions that this KPI could include:

1.- Exit. Visitor who leaves our page.

2.- Rebound. We will analyze the bounce rate.

3.- Social. Visitors end their visit on our social channels.

4.- Contact. The visitor makes contact with us through any of the communication channels that we have established.

5.- Lead. We will collect the data of the users interested in our product or service.

6.- Buy. The number of visitors that become a customer and end their visit with a purchase or contracting of a service.

Cost per Lead

This KPI measures the effectiveness of our marketing campaign. This is very important because we have to quantify the cost or expense of our actions to divide it into total leads, and we can know how much that cost per lead reaches.

This cost per click helps us calculate the return on investment or ROI.

This cost per lead can be calculated in 2 ways:

1.- General. The cost per lead of our entire marketing strategy is established.

2.- Specific. We analyze the cost per lead of an individual campaign (SEO, Adwords, banners, ads on social networks, etc.).

Engagement of Email Marketing

The objective of this KPI indicator is to measure the effectiveness of our email marketing strategy.

We will analyze aspects such as:

  • Rate of openings.
  • Rate of clicks
  • Leads achieved.
  • Purchases obtained.

We will also use this indicator to measure ROI.

Social KPIs

Since the arrival of Social Networks, they have given access to a large number of KPI indicators that measure the interactions and objectives in the social environment.

One of the best known Social Media KPIs is the one that measures the interaction, that is, it analyzes the effectiveness of our campaign based on the Social Network Engagement obtained.

Another social indicator is the growth of our followers’ communities in the different social channels, although the ideal is to link to the previous KPI so that we can analyze the quality of the followers based on their degree of social engagement.

In addition, when executing a social media strategy, a fundamental step is the measurement of results.

But to be able to measure them correctly you must have previously defined KPIs in more important social networks.

Otherwise you will be throwing time and your money by not really knowing if your social media strategy is working or not.

So that this does not happen to you, in the following image you have a list with the most important metrics of the main social networks.

Examples of KPIs for Ecommerce, Google Adwords and Facebook Ads

The best way to know the health status of your ecommerce or online store is by creating a scorecard that includes your main KPIs.

To facilitate this task, in this image you will be able to different KPI examples for an ecommerce.

In addition, normally, if you have an ecommerce you will carry out different advertising campaigns, and one of the channels you can use is Google Adwords.

I also indicate what are the main examples of KPI for Google Adwords.

That Facebook Ads is “trend” to make online advertising campaigns is nothing new.

Virtually all companies are testing this type of advertising on Facebook, but are you really measuring well the results you are getting?

In the image you also have several examples of Facebook Ads KPI that will surely come great to analyze your ads campaign.

To me personally, a Facebook Ads metric in which I usually pay attention is in the ROAS that tells you for every € 1 invested how many euros you recover.

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