Use Key Performance Indicators (KPIs) to Help Your Web Site Reach Its Goals - dummies

Use Key Performance Indicators (KPIs) to Help Your Web Site Reach Its Goals

Key performance indicators (KPIs) help an organization achieve its goals by defining these goals and measuring the organization’s progress towards them. Simply put, KPIs are yardsticks that you can use to measure your Web site’s success. KPIs are important because in order to properly do Web analytics, you need to know what your goals are in order to know what it is you need to be watching.

Your KPIs should be based on your overall business goals and the role your Web site plays in achieving those goals. They need to be significant and measurable:

  • Organizational goals. It is important to establish KPIs based on your own business goals rather than standard goals for your industry. For instance, a company whose goal is “to be most profitable” has different KPIs than a company who defines their goal as “to increase customer retention fifty percent.” The first company has KPIs that relate to finance and profit and loss, whereas the second is focusing on customer satisfaction and response time.

  • Measurement purpose. It’s important to analyze KPIs over time, allowing you to make changes to improve Web site performance and then periodically reevaluate performance to verify your progress. So KPIs must be measurable. The goal “increase customer retention” is useless because there is no real goal; the goal of “increase customer retention by fifty percent” has a definite number that can be tracked.

  • Managerial consensus. It is important to have all managers on the same page because personnel from different functions within your company help create the KPIs. If your KPIs truly reflect your organizational goals, all levels of your company have to get with the program.

    Encourage company unity and enthusiasm for the project, and make sure that everyone knows what the KPIs are. Everyone has to be on board, and they have to know what it is that they’re doing. A crew can’t steer a ship if one half of the crew thinks they’re sailing to Zanzibar and the other half thinks they’re supposed to be Saskatchewan pirates.

  • Goal continuity. KPIs are long-term considerations designed to help with your strategic planning. Although it is important to have targeted goals, they should also lead to an overall success. Just because something is measurable does not mean that it is significant enough to be a key performance indicator. You must define your KPIs and weigh them the same way from year to year. It’s not that you can’t adjust your goals, but you should use the same unit to measure those goals. For example, your Web site goal may be to increase of the number of conversions the same amount year in and year out.

KPIs should not be influenced by the industry averages or your competitors’ KPIs; instead, they should be specific to your company.