4.4 Key Performance Indicators
Understanding How We Measure Success Online
When a business wants to grow and succeed, it needs to set clear goals. For example, a company might want to reach 5,000 new people in one month using social media. These goals help guide the business and keep it focused. But how do we know if a business is reaching its goals? That’s where Key Performance Indicators, or KPIs, come in.
Data | Metrics | KPI
Data collection helps a business to measure growth, track customers, and can be used for employee accountability. A measurement or datum can be the number of clients, sales in a region, overall revenue, etc. Measurements, such as number of customers, only really have value when they are compared within the larger context of a business goal which is called metrics. For example, the number of new customers in the past month.
Data and metrics are both necessary to build and develop statements that show how a particular action (e.g., targeted Facebook advertising) performs. Tracking key performance indicators narrows the set of data and metrics to only those relevant to a particular action.
KPIs are special measurements that help a business understand how well it’s doing. They show if the business is meeting its goals or if it needs to make changes.
KPIs vary depending on business and industry
The KPIs that an organization measures will vary based on: the type of activity and industry, its customers, and its staff. However, they are likely to include most of the following:
- Net profit
- Net promoter score
- Customer engagement
- Customer complaints
- Market share
- Share of voice
- Carbon footprint
- Supply chain miles
- Waste recycling rate
- Employee satisfaction
- Staff churn
- Return on investment (ROI)
Once you have defined your business’ goals and strategy, identifying and aligning the KPIs appropriately for your business is much easier.
KPIs help businesses:
- See what’s working and what’s not.
- Make smart decisions.
- Save time and money.
- Stay focused on their goals.
A company’s social media marketing plan will rely heavily on KPIs to understand the value of the actions and tasks taken in social media marketing.
