A company is an organism that evolves day by day, likewise the challenges they face may vary over time, and the challenges also tell us from marketing what needs we may have. To evacuate a product?, bring traffic to our business?, Positioning our brand? Increase the number of transactions? etc., each of these challenges raises specific actions in our business to carry it out.
The Kpi’s make sense when the needs above are put in context, and above all concerning the budget to execute them. This is where the strategy makes sense, since if nothing conditions an action, any path is valid to carry it out. The strategy is how we will carry out actions to achieve the objective. Even the relationship between the budget or the way its amount is defined will also impact the metrics that I must take into account to evaluate the performance of my strategy.
So what is a KPI? Well, exactly what I just mentioned, the key performance metric, therefore, should help you as a strategist to evaluate whether the behavior of your investment is being effective according to the marketing objectives that you have set according to the challenges of your organization.
First step, to define a Kpi:
Identify the challenges you have in your company at the present moment, clearly all the challenges aim to generate income that allows you to continue operating; However, sometimes we will not necessarily seek to make a profit, in the case of a product launch or evacuation, we can prioritize either traction, or the number of sales, which means that we are willing the cost of sales to be higher or lower. Thus, like other times, we will prioritize visibility because we have products in stores, but our audience does not know it.
Second step
Continuing with what was mentioned at the end of the first step, the challenges can also be related to different stages of the product sales process, awareness, identification, and consideration. That is why it is important that you can establish in which part of the process the opportunities are, where you think the sales process is stalling.
Your audience knows you, but they don’t like you? Your audience likes you, but they don’t buy you? They buy you, but it’s expensive or do you need to marginalize more? There will be one of the key clues to also identify, again, what actions you should prioritize and their nature or focus. Therefore, you should consider metrics that give you information about different aspects: visibility, engagement, intention, the number of transactions, and their cost of sale.
Third step
It is clear, and it is what the equation needs to make sense, What will be the objective value of each key metric? What should I aim for? Here will be important to have a clear data and analytics structure (ask about the advanced configuration of web analytics and create strategic dashboards), which allows you to access the indicators associated with each stage of the funnel, the basis from which you should start is by the reference values for your sector, what is the average CPC, what is the average % reach over a certain number of followers or what is a value that is considered acceptable, what is the average CTR of traffic or conversion ads.
This will also help you identify not only the Kpi’s but also the strategy, since directing traffic with a good influencer may be more profitable than through a guideline, then the metric may be the same, but the data may come from different sources and platforms. You will have to use financially viable strategies, and as I mentioned, sometimes prioritize other types of objectives over profitability, probably if you are starting you will have to give up your profits or assume some losses to grow the volume of your business.
4 and last step:
Finally, you will find that the values that your Kpi’s show can change, your Kpi may be much below the average, or above, and you will have to analyze this in context, since it may be due to the cost of your product, the rating of your user, the level of specialization and, therefore, the consideration that your audience has. Changes in ad policies, etc., in the end, you must understand your dashboard as a funnel, that is, structure your reports taking into account the relationships that exist between the metrics of each stage, and thus find the proportion or target rate of certain interactions regarding the number of people in each phase. How many saw me compared to the ones I impacted? How many entered my landing page compared to those who saw me? How many contacted me versus those who entered, and so, in the end, you will need to analyze what are the primary metrics regarding your CPA and CR optimization.
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