KPIs: What, Why & How

KPIs: What, Why & How

The Basics

So, KPIs… what in the world are they? In the cluttered madness of digital marketing, Key Performance Indicators have become increasingly more important as we seek to answer the following question: Are our efforts meaningful? From a holistic perspective, KPIs are metrics used to measure performance against bottom-line business objectives. They help us monitor what’s working and what’s not. Firms can implement high-quality digital content, design, and strategy, but it’s irrelevant if the numbers don’t support high performance.


The important thing to understand about a KPI is that it first starts as a metric. Specific metrics graduate to KPI’s when they become relevant to your business objectives. Before a business even begins to think about identifying KPIs, there has to be a clear understanding of goals and objectives. The very first step in the process of marketing analysis is clearly defining its purpose. You must answer the question: What are we trying to do? Once you have a firm understanding of the direction, you must then seek ways to quantify your goals. Marketing dollars are lost when marketing activities can’t be measured. From your defined, structured, and quantified goals, you can then begin to choose KPI’s that make logical sense. There are many high-level and low-level measures to consider, but it is entirely dependent on your industry, your business, and once again, your end objectives.

KPIs - Chart

Characteristics of Good KPIs

Good KPIs are simple, predictive, relevant, available, and timely. Overly complicated KPI’s make processes messy and potentially inconsistent. Stick with measurements that are basic and straightforward. In this case, there’s power in simplicity. On some intuitive level, your KPI’s should also be predictable. If you know your business well enough, you have a pretty good idea of what to expect. Relevance takes the cake for King of KPI’s. If you choose a KPI that doesn’t match your business objectives, you’re going to aim and miss every time. Availability and timeliness are complementary. You have to have access to the data you need within a reasonable amount of time. Marketing is largely dependent on timing. Waiting months to revise a campaign or strategy isn’t realistic.

Some more important KPI’s to consider for any marketing initiative would be the following:

  1. Sales growth
  2. Number of leads
  3. Cost per lead
  4. ROI
  5. New contact rate
  6. Conversions
  7. Organic traffic
  8. Mobile activity
  9. Email click-through rate
  10. Blog visits