If you are reading this it means you are a business owner, or in charge of your marketing efforts. Your goal is to increase company profit and with this article, I hope to help you improve your understanding of the key performance indicators (KPI) and where they can take your business.
Key Performance Indicators are measurable values that are used by businesses to track how well they are doing in meeting objectives.
The only way to know if your sales funnel objectives are on track is by measuring them with key performance indicators (KPIs).
When you have KPIs in place, it's easier to identify what's working and what isn't so that you can make changes as needed. If a KPI isn't working out the way you expected, then it's easy to adjust your strategy based on the data instead of trying to guess what will work best.
Let’s get into other reasons why KPIs are important to have in your business!
Importance of KPIs
Helps improve company health
KPIs are important because they allow you to make decisions that help improve the health of your company. KPIs also help improve company performance by providing benchmarks against which companies can measure their efforts towards achieving their own goals. This also helps communicate how well different departments are doing relative to one another within an organization so that employees can work together more efficiently towards common goals. For example, if you notice that a particular KPI isn't where it should be, then you can take action to change things to make sure that metric gets back on track.
Another example: if sales are slumping and your product costs are too high, then you'll want to figure out which problem needs addressing first. If it's product cost, you may need to reevaluate how much money you're spending on material or labor. On the other hand, if sales are low because customers aren't aware of your products or services, then marketing may be more important than lowering production costs
Helps you determine whether you are on track to achieve your goals
KPIs are important because they help you identify areas of improvement and determine if you're on track to meet your goals.
When you know where you want to be in 6 months or a year, it's easy to figure out what steps need to be taken today. KPIs help you track progress towards that goal.
If your company has been doing well over the last few weeks or months but hasn't seen an increase in sales for quite some time, it's probably time for a change in strategy. KPIs can help identify where improvements can be made so that the company is able to reach its full potential.
Helps you set goals for the future
Setting goals for the future is hard. You have to think about what you want to accomplish and then make a plan for getting there. KPIs help with that by providing a way for you to measure your progress towards those goals. For example, let's say you want to increase revenue by 25% over the next year. How do you know if it's working? By using KPIs, you can measure how much revenue each quarter has grown compared to last year's quarter—and then see how that compares with your goal of a 25% increase by next year! That way, if things aren't going well (or better than expected!) you can make adjustments as needed.
What KPIs Should You Track at Each Stage of The Funnel?
Awareness
In this stage, your KPIs are measuring how potential customers are finding you. Traffic sources, SEO keyword positioning, impressions, reach and Ad frequency are some KPIs to measure this.
Interest
This is when potential customers are doing preliminary research on your business. Here you need to measure the number of visits to your email subscription, engagement rates, click-through rates and more.
Desire
This is the vital stage where you create an "emotional connection" with the prospective buyer. KPIs to measure here are clicks to your website, DMs about your services and inquiries about working with you.
Action
The action stage is when a purchase is made. The KPIs to measure are the number of online transactions, average order value, cart abandonment rate, sales generated and the cost of customer acquisition.
Key performance indicators are very important for any company that wants to track and meet its goals. With the given KPIs your business will be able to gauge its progress and adjust where needed to meet its objectives.
KPIs can be used to assess any area of your business, from customer service to marketing. If you're not sure which KPIs are right for your company, it's worth taking some time to think about what makes sense for you.
If you need assistance with outlining your KPIs, apply to work with us and we’ll help you build your analytics system to improve your visibility and sales.
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