How to go about selecting the right KPIs for your company?

It’s not about the number of metrics, but about their relevance

With web analytics software giving us mountains of data and reports, it can be tempting to review all these metrics – from the overview of your website referrers, through to the performance of each entry page, to the average number of pages viewed per session. Yes, you could do that and end up swimming, or actually drowning in an ocean of data.

Key performance indicators (KPIs), sometimes also called key success indicators, are metrics observed by businesses in order to check their performance against their goals. It’s your KPIs that hold the key to identifying and introducing improvements to your website’s performance. It’s good to narrow your list of metrics down instead of spending hours trying to take note of every little detail. Let’s focus on the general principles that should be followed as a rule of thumb when selecting the right KPIs.

Rule Number 1: Make Your List of KPIs Short and Sweet!

Whichever analytics software you’re using, it can offer enough metrics to keep you busy for a very long time. There are certain common KPIs that you should be keeping up with, just to mention a few: the number of pageviews per user, page bounce rate or average time users spend on your website. But other than that, keep your list short and sweet. Only measuring the data that really matters allows you to introduce the necessary changes to your website that can help you achieve your business goals. It’s worth taking time when selecting the right KPIs and narrowing the list down.

Rule number 2: Horses For Courses

KPIs will obviously differ from company to company because each website has unique objectives that match different goals of each business. You will be approaching metrics differently if you are trying to build traffic or generate quality leads. An online store will certainly use different KPIs than an online media outlet or a lead generator. The seller is about increasing sales, the magazine is about new subscribers and advertisers, whereas the lead generator wants targeted traffic with qualified leads. In general, there are 4 main categories of sites, so think which of these best describes your company’s website:

• E-commerce
• Content portal
• Lead generation
• Customer support

Rule number 3: Align the KPIs With Your Business Goals.

Web analytics works best when it’s tied to your goals. Ask yourself the following questions to outline your business objectives:

• Why is your company online?
• What do you want to achieve with your website?
• Is your goal to drive online sales / generate traffic / generate qualified sales leads for your services?
• How will you know when you’ve accomplished your goals?

The answers to these questions will help you choose the metrics that really matter to your business. A well-known good practice is selecting the right KPIs by starting at the top of your company’s list of goals and then work your way down. Firstly, you should analyze what the strategic goals of your company and your department are for the next few years. Then, analyze your company’s operational goals or marketing goals for the near future. And finally, seeing the larger picture of your business can help you define the KPIs for your online presence which are tightly aligned to the business needs of your company.

Selecting the right KPIs for E-commerce

If your goal is online sales, you’ll want to pay attention to the metrics that illustrate revenue, orders, profit, conversion rates, profit per visit, and average order.

• Average Conversion Rate
• Average Order Value
• Customer Lifetime Value

Related post: 5 E-commerce Metrics to Track on a Daily Basis

Selecting the right KPIs for Content portal:

If you are running a content outlet with revenue coming from advertising, you will need to focus on your traffic and track metrics such as actions per visit, subscription conversion, overall pageviews, the percentage of returning visitors, etc. Here’s our pick of metrics to follow:

• average time per visit
• average CTR for all the ad units on the site
• average eCPC (Enhanced cost per click)
• number of engaged visitors (i.e visitors who view more than 6 pages during a single visit)
• % of new visitors in a given period of time
• Average Page Views Per Visit

Selecting the right KPIs for Lead generation:

If you seek qualified prospects, you will need to focus on metrics related to leads, such as cost per lead, conversion rate, signups, registrations or materials download. So your KPIs could be the following:

• Average Cost Per Visitor
• Average Cost Per Conversion
• Average Revenue Per Visitor
• Average Conversion Rate

Selecting the right KPIs for Customer support:

Client support sites are created to help users get answers to their questions – be it customer service or technical support. They help to save money as they offer organised and searchable content in the form of user guides and FAQs. The KPIs for a customer support website would be the ones that allow you to measure how effective your online customer support efforts are. Here are some picks:

• Average Page Views Per Visit
• Ratio of New to Returning Visitors
• Average Searches Per Visit
• Average time per visit
• Average time on site

So, to wrap it up: consider which common KPIs will be necessary for your website, clarify your business goals and align your metrics with these aims. Also, there are some good practices to remember. There should never be more than 2 to 3 KPIs for the whole website and up to 3 supplementary KPIs for each stage of the conversion funnel (acquisition, engagement, conversion, retention). In most online businesses, each KPI is assigned to a person responsible for its daily monitoring and optimization. Who is responsible for each KPI in your company?

Remember, stay focused on the big picture and keep your list as short and simple as possible.