Definition: Key Performance Indicator or the KPI is a performance appraisal tool that illustrates the degree of achievement of the desired parameter.
When we talk about the performance indicators of a site, we are interested in how well it achieves its goals of collecting monthly leads for our site. Of course, we can calculate both micro-conversions (eg. Subscribe to the newsletter, add a product to the cart, Download a PDF brochure) and macro-conversions (eg. purchase a product, subscribe to a service, get a Lead). It is important to measure everything that matters and leads to the growth of our business.
Everything in the online world is measured so that you can:
- Understand the company’s activity and the objectives that are proposed to you, or that you want to achieve;
- identify and determine objectives and KPIs;
- transform the company’s objectives into achievable goals, through an effective online marketing strategy;
- set priorities and select performance indicators for those values, which have the greatest impact on the company’s revenue and conversions.
How should KPIs be chosen for your site?
- Measurable – the performance indicator is a valid mechanism or tool for measuring data and gives you a de facto status report;
- Ready to define the impact – the totality of the information regarding the online activity of the company forms an overview and highlights the impact on the business;
- Match your online marketing goals.
The site’s performance indicators are most often measured by Google Analytics:
Any reputable entrepreneur intelligently uses the data presented by Google Analytics in planning his marketing and conversion strategies. Stored efficiently, Google Analytics statistics give you a clear picture of the type of visitors to your website.
Google Analytics provides data on:
- Required services
- Hot topics
Minuses/pluses in product presentation
- The most problematic parts of the site
- Audience preferences.
Examples of KPIs related to site performance:
- Number of users – visitors
- Number of new users – number of unique users
- Number of sessions – no. of visits to the website
- The average duration of a session – average duration of website visits. To calculate it, Google Analytics adds the length of each session to the specified period and divides it by the total number of sessions
- The number of pages accessed per session
- Bounce rate -% of unique page views. The number of times a person leaves your website exactly on the landing page without navigating to other internal pages.
- Conversion rate
- The number of transactions.
A general metric that encompasses all the marketing efforts is ROI.
Return on Investment (ROI) is the percentage of the investment that goes back to the person making that investment.
It is calculated as the amount of revenue generated by each dollar invested in the campaign.
ROI = Conversion value / Cost
Example: A campaign generated $ 20,000 in online sales as a result of a $ 1000 campaign.
For promotion you had the following costs: content production – $ 500, agency commission – $ 500, other costs – $ 450. In this case, ROI = (($20 000 – $1000-$500-$500-$450)/($1000+$500+$500+$450))*100 = 716.33%