KPIs, or Key Performance Indicators, are metrics used to track the performance of a business, a department, or individuals against goals.– HubSpot
At its core, KPIs are used for businesses to measure how well they’re doing by looking at internal goals and statistics.
Once you measure your performance, you can track how things improve or diminish over time. You can also use KPIs to learn where to improve processes and departments.
To make the most out of your KPIs, they should stick to the SMART criteria:
- Specific (don’t be too general)
- Measurable (make sure your goal is quantitative, not qualitative)
- Attainable (ask yourself, “is this something my team/business can accomplish?”)
- Relevant (keep your KPIs on track by following your goals, don’t track unnecessary metrics)
- Time-bound (set time limits with your goals, whether it be weekly, monthly, or yearly improvement)
What marketing and sales KPIs are the most important?
That answer will of course be ‘it depends’, but here are some of the most common KPIs we track when working with our clients:
- Sales Revenue
- Cost Per Lead
- Customer Lifetime Value
- Inbound Marketing ROI
- Traffic-to-Lead Ratio (New Contact Rate)
- Lead-to-Customer Ratio
- Landing Page Conversion Rates
- Organic Traffic
- Social Media Traffic (and Conversion Rates)
- Mobile Traffic, Leads and Conversion Rates
While there are tons of KPIs you could track, you should choose the ones that directly align with your business goals.
Are you looking to improve sales? Start tracking KPIs like daily sales, conversion rate, and site traffic. Do you want to grow your website traffic? Look at current site traffic, traffic sources, and click-through rates (CTRs) on your ads and social posts.
Once you understand where your baseline is, you can use this information to create and execute a plan to grow. As you can see, each of the business goals is accompanied by KPIs that directly relate to that goal. When planning what KPIs you want to track, think about the growth goals you have for your business and choose both leading and lagging business metrics.
Not all businesses need to track the same KPIs. For instance, an ecommerce business’ goals look different than a manufacturing company. An online business would likely have goals such as increasing site traffic and getting products shipped faster, so their KPIs would be tracking traffic sources, overall traffic, and the time it takes from receiving an order to shipping it. A manufacturer could have goals like increasing output and decreasing cost per acquisition, so they would have corresponding KPIs like parts produced per minute, assembly time, and ad spend.
Begin your KPI tracking by setting business goals for improvement over time. Once you know where you want to push the business, you can begin looking at the metrics that drive those goals.
Remember, not every business has the same goals, and therefore, not every business uses the same KPIs. Your KPIs should be specific and measurable for your company.
Need help tracking your KPIs? Let us help you, it’s what we’re good at.