KPI (key performance indicator)

A KPI, an acronym for key performance indicator, is a series of metrics used to identify the efficiency and quality of different actions. You can use KPIs to measure results and make any necessary changes to your strategies.

KPIs are generally used to identify aspects that need to be improved. These metrics can be applicable in any business area and sector, although they are commonly used in the field of digital marketing.

As a primary objective, a KPI should be a solid basis to help make the best decisions regarding the current state of a project, strategy and campaign, in order to define a future course of action.

1. Characteristics of a KPI

Any KPI you want to evaluate must have the following characteristics in order to work properly:

• Attainable. The objectives set must be realistic and feasible.
• Measurable. It may seem obvious, but you need to have options for checking the result.
• Relevant. They must be important and necessary.
• Periodic. They must be analyzable periodically (on specific dates).
• Practical. It should help you to decide on the next steps you will take.
• Accurate. It must provide precise and detailed information.
• Aligned. It must be aligned with the company’s general objectives.

2. KPIs most commonly used in marketing

KPIs are determined by the nature of the business and its current situation. However, there are some that are widely used in digital marketing and are used to measure the performance of campaigns. These KPIs include:

• Increased sales. This is used to measure whether the campaign, as planned, is increasing the number of sales.
• CTR. To find out the percentage of clicks over the total number of impressions generated by the campaign.
• Sales funnel. To find out the best way to convert users into customers.
• Traffic sources. The aim is to find out the means by which users reach the campaign.
• Measuring the success rate. To keep track of the effectiveness of the actions taken.
• Number of followers. To monitor the number of followers and how your social media profiles are growing.
• Keywords. To measure the ranking of keywords and optimize the SEO strategy.
• Return on investment (ROI). To track the income generated by each campaign.
• Open rate. To find out the percentage of customers who open the emails sent in email marketing campaigns.

There are many KPIs that can be used, as many as you need to measure, but these will give you a very accurate idea of the relevance of working with KPIs in your business or digital project.