Key Performance Indicators
Your key performance indicators (KPIs) should be based on your
overall business goals and the role your website plays in achieving
those goals. KPIs should be company specific and not influenced by
industry averages or your competitors’ KPIs.
What are Key Performance Indicators?
Webopedia defines them thusly:
“KPIs, or key performance indicators, help organizations
achieve organizational goals through the definition and measurement of
progress. The key indicators are agreed upon by an organization and are
indicators which can be measured that will reflect success factors. The
KPIs selected must reflect the organization’s goals, they must be key to
its success, and they must be measurable. Key performance indicators
usually are long-term considerations for an organization.”
Let’s summarize the important points of this KPI definition:
- Organizational Goals: It is important to
establish KPIs based on your own business goals rather than standard
goals for your industry. Expanding on this, a company whose goal is “to
be most profitable” will have different KPIs than a company who defines
their goal as “to increase customer retention fifty percent.” The
first company will have KPIs related to finance and profit and loss,
while the second will focus on customer satisfaction and response time.
- Measurement Purpose: It is important to analyze
KPIs over time, allowing you to make changes to improve website
performance – then periodically reevaluate performance to verify
progress. For this reason, KPIs must be measurable. The goal “increase
customer retention” is useless because there is no quantifiable goal,
whereas the aforementioned goal, “to increase customer retention fifty
percent” has a definite quantity that can be tracked.
- Goal Continuity: KPIs are long-term considerations
designed to help with strategic planning. While it is important to have
targeted goals, they should be incremental to an overall success.
Simply because something is measurable does not mean that it is
significant enough to be a key performance indicator. You must define
your KPIs and keep their measure the same from year to year. Not that
you can’t adjust your goals, but you should use the same unit to measure
- Managerial Consensus: It is important to have all
managers on the same page because personnel from different functions
within your company will help create the KPIs. If your KPIs truly
reflect your organizational goals then it is necessary for all levels of
your company to get with the program. Encourage company unity and
enthusiasm for the project and make sure that everyone knows what the
While it is desirable to create very specific KPIs for your business,
there are a few metrics that qualify as regular key performance
indicators. These include the KPIs for measuring reach, acquisition, conversions, and retention.