Key Performance Indicators (KPIs) are fundamental tools used to evaluate the performance of individuals, teams, organizations, or projects in achieving specific objectives. They provide essential quantifiable data to measure progress and success, making them crucial for performance management.
To analyze one's online performance, today we have at our disposal several tools such as Google Analytics, Hotjar, or Lucky Orange. In this context, there are three main categories of metrics useful for analyzing performance: Business Performance Metrics, Website Metrics, and Adv/Social Media Metrics.
Business Performance Metrics
CPA → Cost Per Acquisition - refers to the amount of money spent to acquire new customers.
LTV → Lifetime Customer Value - represents the average amount of money a customer spends over their lifetime on your products.
If the cost per acquisition exceeds the lifetime customer value, it's a problem.
How can we increase the LTV? How can we encourage customers to buy from us more frequently or spend more? How can we improve marketing performance to lower the CPA?
A risky tactic, unless you have a strong and tested business model, is to increase the CPA knowing you have a strong LTV.
Website Metrics
When monitoring these metrics, one must consider the awareness people have of the brand and ask: how do people find us?
- The simplest metric to monitor is website traffic using Google Analytics.
- Sessions → every time someone enters the website. An individual can generate multiple sessions.
- Visitors → the number of unique individuals who have visited the website. It's the most effective way to monitor awareness. If you have 1000 sessions but only 800 unique visitors, it could mean that some people are returning to your website multiple times during that period. These metrics will help you understand how much traffic you're receiving on your website and if your marketing efforts are bringing more people to the site over time.
In the context of e-commerce, it's good to monitor: -
Bounce rate (percentage of bounce) → the percentage of people who leave the site without taking further action. A high bounce rate is not a positive indicator because it means that the audience hasn't been targeted well, people don't like the site, they get bored, or the content isn't in line with what they expected.
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Average session duration → Google Analytics can record the duration of sessions on the pages visited on your site.
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Conversion rate → the most important metric, it represents the conversion rate and tells you the percentage of visitors who take a desired action on your website, which could be purchasing a product, filling out a form, or any other action you have defined as a conversion. Increasing the conversion rate means improving the effectiveness of your website in converting visitors into customers or leads. This can be filtered for different objectives. For example, if you sell software and your website has an option to contact you and an option where people can register and book a demo, the conversion goals will be two.
The important thing is to set different conversion goals and understand the paths that people can take.
If you sell online, you must enable ecommerce tracking in Google Analytics, and this will allow you to monitor the conversion rate when people purchase something on your website.
Adv/Social Media Metrics
The most common advertising metrics on social media include:
- Impressions: all the people who have seen your post on social media, found the post in organic search, or on some platform.
- CTR → Click Through Rate, which means how many people who have seen your post have clicked on it.
- Frequency → how often a person sees your post.
For example, if you have a B2B, you would want the frequency to be higher because the purchase may require more consideration. - Paid advertising, or paid adv → CPC cost per click, meaning the cost incurred for each individual click.
All these metrics must be viewed together because if someone clicks on your site, it doesn't necessarily mean they are the right person; you need to attract the right people.however, an excessive presence can be boring.