KPI (key performance indicator)
What is a KPI? Types of KPI or key performance indicator.
A KPI, an acronym for key performance indicator, is a set of metrics used to measure the efficiency and quality with which different actions are being carried out within a business. KPIs provide information that lets you make decisions objectively and so meet the goals set for a specific process or project.
KPI is usually translated into Spanish as “indicador clave de rendimiento” or “medidor de rendimiento”. They are metrics that apply to any business area and sector, although they are commonly used in digital marketing.
Above all, a KPI must be able to help us make the best decisions about the current state of a project, strategy or campaign, so that we can define a future course of action on a firm footing.
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 must be able to quantify them.
- Relevant. It must be important and necessary.
- Periodic. It must be analyzable periodically (on specific dates).
- Practical. It must allow decisions to be made.
- 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, some are very widely used in digital marketing 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. Find out the percentage of clicks out of the total number of impressions of our campaign.
- Sales funnel. To find out the best way to convert users into customers.
- Traffic sources. Its aim is to find out the channels users come from to 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. Measures the ranking of our keywords to optimize the SEO strategy.
- Return on investment (ROI). To find out the revenue generated by the campaigns carried out.
- Open rate. 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 there are measurement needs, but these give you a very clear idea of the great value of having KPIs in your business or digital projects.