Web Intelligence Details: Your Key Performance Indicator (KPI)

If you’re new to web intelligence and struggling to gather data, how do you know if your efforts are really paying off? Well, there are these wonderful things called “benchmarks” and KPI, and this is where they come into play.

What is a KPI?

Not to be confused with SEO’s KEI (Keyword Effective Index), KPI stands for Key Performance Indicator. As Avinash Kaushik would say, KPIs are measures that help you understand how you are performing against your objectives. They can help you define and evaluate whether you’re making adequate, successful progress towards your long-term goals.

    KPI's as explained by Avinash KaushikA good KPI used to measure performance should meet the following criteria:

  1. Uncomplex
  2. Relevant
  3. Timely
  4. Instantly useful

Now, KPIs can’t be copy/pasted from one organization to another or from one strategy to another. Each KPI is unique, dependant upon what your company does, what industry you’re in and what your strategy is. As well, it is a key part of your measurable directive, which includes five pieces:

  1. Company direction
  2. Key performance indicator
  3. Benchmark
  4. Target
  5. Time frame

For instance: [1] Increase [2] Average Monthly Revenue from [3] $300,000 to [4] $600,000 in [5] 6 months.

Eric T. Peterson wrote a great book called The Big Book of Key Performance Indicators, which can be downloaded for free on the Web Analytics Demystified site. The KPI Library is free to use at their basic level and has more information and discussions.

Some sample of KPIs are:
Key Performance Indicators - KPI

  • Bounce rate
  • Conversion rate
  • Average order rate
  • Days to purchase
  • Visits to purchase
  • Loyalty, Recency
  • Task completion
  • Share of search

Don’t forget to segment your data!

Putting Your Measurable Directive Into Action

Using your measurable objective as a focus, you can then begin to build a strategy to reach your company goal.

  1. Define your model.
    • What type of site do you have? You may think, “Well, I’m bringing in money, it must be an ecommerce site.” Maybe, but don’t be so quick to assume. There are at least five different site types including information/news portals, lead generation sites, educational sites, ecommerce sites and support sites. Your website may have multiple functions, so choose which fits the site’s main function the closest.
  2. Define your goal / objective.Putting Your Measurable Directive Into Action
    • What’s your primary goal? What’s your secondary goal? An ecommerce site may want to increase their revenue; an information site may want to increase their targeted traffic.
  3. Define your potential conversions.
    • Based on your goals, outline potential conversions, both primary and secondary. Which is which – and what falls under each – all depends on what type of site you have. For example, an informational site might use newsletter signups, PDF/brochure downloads, RSS subscribers and contact form completions as primary conversion points. However, an ecommerce site might use affiliate sales, ad revenue and products as primary conversions, with the others being secondary.
  4. Define your strategy.
    • How are you going to make sure people hit your potential conversion points? Develop a strategy based on your model, goals and conversion points. Your strategy might be something like, “Create a higher, more targeted traffic base.” This is one strategy to raise your KPI.
  5. Define your tactics.
    • Because “tactics” are different then “strategy”, you also want to pinpoint your tactics. If your strategy is to create a higher, more targeted traffic base, your tactics might include:
      • Social media platforms
      • Link building campaigns
      • Engaging content creation

Now you know what your goal is, what you need to get there and what tactics you’re going to use. By watching your chosen KPI and benchmark, you have a much better chance of making sure that your company objective moves forward. The great thing about it is, when tied in with the rest of web intelligence, the KPI is one of the keys to finding your site’s formula for success!

Be a Web Ninja: go measure your KPIs.