The best KPI reporting starts with understanding the goal system

The ability to quantify results is a core need for every marketer. There’s a lot of talk about KPI reporting, assuming that it gives you some valuable insight into what’s working and what isn’t. It may. If it’s set up correctly. KPIs are often mistaken for other core parts of your goal-setting system.

Those parts are:

  • Goals and objectives
  • Critical success factors
  • KPIs
  • Metrics
  • Measures

Let’s talk about each of these items so we don’t confuse other goal elements.

Defining goals and objectives

In his Fast Company article, Dan Feliciano describes the difference between goals and objectives:

Goals can be described or defined as “Outcome statements that define what an organization is trying to accomplish both programmatically and organizationally.”

Some common business goals are, grow profitability, maximize net income, improve customer loyalty and etc. Notice the brevity of these statements.

In comparison, an objective is a specific, measurable, actionable, realistic, and time-bound condition that must be attained in order to accomplish a particular goal. Objectives define the actions must be taken within a year to reach the strategic goals. For example, if an organization has a goal to “grow revenues”. An objective to achieve the goal may be “introduce 2 new products by 20XX Q3.” Other examples of common objectives are, increase revenue by x% in 20XX, reduce overhead costs by X% by 20XX, and etc. Notice how the objectives are more specific and provide more detail.

A goal is where you want to be and objectives are the steps taken to reach the goal.

Ensuring your goals and objectives are clear as you create reports makes them more useful. Without a defined goal strategy, reports become a jumble of metrics and measures. This leaves the recipient with more data points and fewer insights, or tasked with figuring out if these numbers apply to goals at all.

What are critical success factors?

Good critical success factors (CSFs) are a small list of core activities that a person, team, or organization should focus on to be meet goals and objectives. They always include both a measurable activity and a time constraint.

For example, your CSF may be to increase qualified leads by 15% in the next 90 days.

Critical success factors are, arguably, what you should roll up many reports under. You may have reports for each KPI, as we’ll discuss, but a CSF summary report will highlight major points. It will also show where deeper analysis and reporting may be necessary.

Key performance indicators

A key performance indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives.

It’s easy to confuse CSFs and KPIs.

CSFs are parts of your strategy that are vital to meeting your goals. KPIs are the quantifiable items that enable measurement of the CSFs and goals.

Examples of KPIs include:

  • Average rank change compared from last month to this month
  • Total keywords in the top three this week compared to last week
  • Number of conversions in Q1 compared to Q2

A KPI is always a calculation of measures, which we’ll discuss more in a moment.  Since there are tons of metrics and measures, choosing the metrics and measures that are essential to calculating your KPIs is fundamental to good, useful reporting.

There are often a number of metrics that have no impact on how our business is performing. It may be hard to re-evaluate reporting, however removing these extra figures can paint a clearer picture.

Delving into your KPIs and building reports around them aims to not just monitor progress, but to point to opportunities.

Metrics and measures

Measures are the raw data that we have access to from our tool and platforms. They are the lowest level of the goal strategy and need to be combined or related to each other in order to be utilized for KPIs and CSFs.

We collect measures across our available data sources so we can build metrics. Examples of measures include visitors, page views, and cost per click.

Metrics use the measures that we collect and calculate them into reference points. We express metrics as percentages, averages, ratios, or rates.

Examples of metrics include:

  • Average pages viewed per visitor
  • Percent of organic traffic of all traffic

Remember that your metrics and measures are the building blocks of your KPIs. The key performance indicators tell you how effectively you are meeting stated goals and and objectives and should be measured often. Let’s talk about choosing the right KPIs for your goals.

Which metrics matter: Metric basics for any marketer

The trick to navigating this sea of data is figuring out what is important to your business and what is not. Since every business is different, there is no “right answer” for which KPIs to track and what can be ignored. If you haven’t already, deciding what KPIs matter for your business (and why) is a great place to start. Before digging into reporting, you will need a firm grasp on the KPIs that matter to you. This video reviews five simple marketing metrics that you can start with in developing KPIs. If you don’t have time to watch right now, here’s a quick recap along with my notes where I expand on and provide additional insights for specific categories.

Do we know too much?

  • There are hundreds or thousands of variables you could be tracking with digital marketing
  • You can track who is taking actions, when they took the action, how often they take the action, etc.
  • Marketers can see which devices are being used to consume content and from which locations
  • We can understand things like age, interest, and behavior patterns over days, weeks, months and years
  • The more we know, the better we can serve our customers – this info is good

Where do we start? Five easy metrics you can start with today

Website traffic

A bit of a vanity metric (it may or may not relate directly to the bottom line), it does tell you how many people are visiting and interacting with your “digital storefront.” You can dive deeper while you’re in your website analytics data, looking into traffic sources and specific page performance metrics. (We’ll talk more about specific pages and sources more in the segmenting section next.)

My notes: Sometimes, a steady increase (or sharp increase) in traffic may not be a good thing. It may be irrelevant traffic, leading to higher bounce rates (see below) or unqualified leads. It’s important not to focus on driving traffic for the numbers alone. While this seems to be common sense, it’s frequent to hear “we need to get our traffic numbers up” or some version of that in meetings. If you’re tasked with increasing traffic, get to the root of why that metric matters to the task maker. Do they equate traffic with sales based on past experience? Does traffic tie into their personal performance metrics? Do they agree with generating traffic as a means to an end? Would less traffic and more sales be okay? These are things to consider when discussing a strategy for KPIs, measuring goals, and ensuring revenue performance.

Bounce rate

The number of people who quickly visit your site and then leave. You want to see a low number as it indicates that people are sticking around and looking at more content. If you’re having bounce rate issues, take a look at the site from the perspective of a potential customer and determine what they’d expect.

My notes: Bounce rate is important to understanding if a search engine finds your content relevant, and has an impact on organic rank. If a consumer clicks into a site and doesn’t get what they expected from the link, they typically leave. Too many of these instances can cause penalties. Old school link building strategies that focused on “click bait” gave users negative experiences, driving search engines to drop their rankings. Moral of the story? Make sure when driving traffic to your site, you’re providing an accurate depiction of what the audience can expect when they get there.

Email subscribers

Regardless of the business you’re in, you could likely benefit from an email marketing strategy. You want your audience to opt-in to receiving messages from you because you are delivering content that they find quality in for their needs. The email subscriber rate should rise steadily over time. You can increase subscribers by offering them something of value in exchange for their email address, such as an ebook, white paper, consulting session, etc..

My notes: The best email marketing strategies are often complex, but with a few basics you can have a very good one that drives relevant traffic. If you’re not getting a lot out of email, it may not be email’s fault as a channel. Any number of things, from going to spam or marked as promotional content, to headlines that don’t resonate with your audience, can drive engagement down. One tip to try: Take the keywords that you perform well for in search and focus on those in your email subject lines. If you start to see better open rates, it tells you that your email strategy should tie in more closely with your top performing content.

Click through rate (CTR)

Your click through rate, or CTR, is a measure of how frequently audience members take an action by clicking in your posts or advertisements. CTR is an important metric any time you create an ad for a social, search or content site – as it tells you that the ad is relevant enough to the audience for action. Higher click through rates are usually rewarded with better placements – driving engagement even higher. Spend a little extra time testing your ads to make sure the most relevant are there.

My notes: Click through rate is important in not just ads that are paid for, but on all links, CTAs, and other areas where you’d like to engage with your audience. Whether it is on your site, via social, search engines, or paid placements – you want to be relevant and drive the audience to engage. This brings up another interesting point, placement of a next engagement step. This shouldn’t be an “in your face” cry for attention or something that gets in the users way of consuming content. (This is why interstitial ads and screen take-overs are being penalized.) The content you create should naturally lead the audience on a journey, making a click the next logical step.

Customer lifetime value (CLV)

This is one of the most difficult metrics to track but also one of the most valuable. There are a number of services and tools that can help you determine and monitor this metric. If that’s not in the budget, having a general idea of a customer’s value is still important. It’s beneficial because if we know what a customer is worth to the business, we know what we can spend to acquire a new one. The idea is to acquire customers at a cost lower than their CLV to increase profit.

My notes: Customer lifetime value is an important metric but I find it’s often incorrectly calculated. This is because many organizations are not focused on retention methods and metrics. That means that if we are “churning out” customers there isn’t an unlimited supply of them we can continue to replace. Often, keeping customers requires investment. That investment must be calculated into the CLV to make it accurate. If you have customer success teams, partnership programs, rewards offerings, etc. these items should be taken into account. This may sound like a negative but in fact, it’s an opportunity to increase profitability. Once you know your true CLV, you can decrease acquisition costs if needed or focus on improving retention at lower budget. Either way, keeping customers is always better than replacing them!

From metrics to KPIs

The items above aren’t KPIs, they’re metrics. What’s more, they’re a very small sampling of the metrics available to marketers… So how do we determine KPIs?

If you already have a set of KPIs you track, you are off to a great start. However, it is a good idea to occasionally revisit these metrics and make sure they are providing the types of insight that matter to you. Perhaps you find some your current metrics not very useful. Maybe you have added a channel to your marketing strategy that requires additional metrics. Whatever the case, occasionally revisiting your KPIs will keep you focused on what is important and prevent you from being overwhelmed by data.

Choosing KPIs that work for you

Which KPIs will help us determine if we’re on track toward our goal? Knowing what the critical success factors are for your goal helps determine the indicators of meeting it. Take a look at the example goal below:

KPI reporting choosing the best KPIs for your business

KPIs should include the following:

A direct link to your goals and critical success factors

If you can’t tie it back to those things, it’s not the right KPI or thing to measure. That doesn’t mean it doesn’t have application for another CSF or goal, it just means it’s not pertinent information to the reporting for this one. If something seems important but can’t be tied back to your goals or CSFs, examine if you’ve got all of the right CSFs in place. Also determine if the metric or KPI in question feels important because of external pressures or habit. These issues often cause us to include extraneous data.

Associated with different roles

Depending on the size of your team or organization, unless you’re an army of one, KPIs shouldn’t completely fall to one person. Ensuring that your team(s) have a variety of KPIs to track keeps everyone marching toward the same goal. It also fosters contributions that are in lock-step, making goals more easily attainable.

Realistic expectations

If a KPI has a measurement timeline or is tied to a CSF with an unrealistic expectation, it will crumble. Often, people abandon the KPI early on when they miss it, or give up when the measurement because too difficult to report on and track. If you have to spend significant budget to track a KPI, make sure it’s worth it to know that information. Often, you’ll find yourself wading through multiple tools and decisions to implement them, slowing the goal achievement.

Industry-specific, not cookie-cutter KPIs

The KPIs for retail are different than the KPIs for SaaS companies. If you search “KPIs to track” or some other variation, and choose the top 10, you’re going to be disappointed in your results. Sure, some may fit with your goals, but others may bog down you or your team in needless data collection and reporting.

Focused and limited

If you’ve got 50 KPIs per goal, you’re not narrowing down what really matters. Fewer KPIs means more time to focus on each one, and more resources to focus there as well. Truly moving the needle with KPIs requires work, so don’t spread yourself or your team too thin with tons of KPIs.

Since this post isn’t solely dedicated to choosing the right KPIs, we’ll move on. Take the time to ensure you’re tracking the right KPIs before worrying about a reporting solution to match.

KPI reporting that makes sense

To match KPIs to reporting you’ll need to ensure you’ve got your metrics and measures in place. If you don’t have the data you need , check with your existing tools to see if it’s a metrics they offer.

Let’s assume you’ve got the data you need and talk about setup.

I advocate a modular data platform and analytics system. One of the biggest reasons for this is my desire for flexible KPI reporting. What does that mean?

Data modules are separate views of the metrics that matter to you. Housing metrics in their own modules provides flexibility that makes KPI reporting easier. It allows you to combine and compare metrics to match the KPIs that you’re focused on, save the module layouts, and export them easily.

Let’s look at some considerations in building your KPI-driven reports.

Time-bound filtering

Since our critical success factors and KPIs are time-bound, our reporting needs to reflect that. Measuring the impact of your efforts toward goals may be daily, weekly, monthly or quarterly.

Your reports should reflect three core timelines:

Time to goal

This is the overview report that executives and business unit leaders are typically going to ask for. Often considered an executive summary, what we’re really looking at is the progress toward the goal. I call it time to goal because we should use this report to focus on the following:

  • Progress made since the goal was determined, including CSFs and KPIs achieved
  • CSFs and KPIs left to achieve, with a timeline of expected completion
  • Course corrections made and lessons learned

We’ll talk a bit about course corrections in the daily progress report, but our KPIs are not always 100 percent correct. Or we are impacted by market factors, internal changes, etc. that require shifts in focus or resources.

Comparison roll-ups

These can be done at the weekly and monthly levels, and are vital to comparing the progress made. Everyone involved in a KPI and CSF should have access to the specific metrics and their progress each week or month.

Daily progress

Daily data updates give you a granular look at how things are changing over time and the specific impact of changes. While most reports that roll up are not distributed daily, the ability to dive into a specific date can be extremely useful. For the person responsible for the KPI, having a “temperature check” of their impact on CSFs can provide the opportunity for early course correction. These course corrections can save organizations thousands or millions of dollars in resources each year.

Segmentation across core marketing factors

We talk a lot about Segment Mapping on the DemandSphere blog, so I won’t get too far into defining it here. Instead, I want to focus on what segments you can create and how they improve KPI reporting.

Let’s start with a quick overview of what segments can include:

  • Campaigns
  • Messages
  • Products
  • Features
  • Benefits
  • Solutions
  • Locations
  • Audience type / persona
  • Marketing channel
  • Search engines and devices
  • Content type
  • And more

If you have a list of KPIs that are marching you toward a goal, your reporting is simplified by segmentation.

Going back to our example goal above, imagine you need to increase your qualified leads by 20%. If you’re responsible for SEO and content, this means you’re looking at organic traffic methods. And not just any organic traffic – qualified organic traffic.

Being able to segment your traffic and keyword focus by things like features, solutions, locations, marketing channel, content type, and more gives you needed strategic modules.

KPI reporting module

Roles and teams

Creating KPI reporting that ties to specific roles and teams should be done at the onset of any goal strategy. Focusing all KPI reports across all teams or contributors creates noise, and shares data that may confuse the focus.

While it may seem time consuming to create reports for each role, these are critical to keeping pace toward CSFs and goals. It’s easy to pick out, at the individual level, where roadblocks are or course corrections are needed.

Scheduling, automation, and customization

Depending on the reporting tool you’re using, it may take a bit of time – but worth it – to set up when you start a goal. Getting automated reports going will help cut down on that time for new KPIs, future CSFs and goals.

You should be able to automate the creation of some reports by individual segments and sites. That means they’ll start populating based on preselected metrics, without you doing a thing. This is a great option because it gives you a starting point for your reporting. You can simply make tweaks to the automated reports instead of starting from scratch.

Scheduled reporting sends are also great time savers. Get your daily, weekly, monthly, and quarterly reports out without lifting a finger. I use  report scheduling internally as my daily check-up on our company’s health and progress. Embedded HTML reports put the modules directly into my email and I can have a glance in the morning or evening.

KPI Reporting… Necessary, not scary

No matter your goals or KPIs, you’re tasked with showing progress toward them. Reporting shouldn’t be a hassle, it should be an opportunity. It’s your place to highlight wins, make corrections, and see new growth factors. Being off track isn’t scary if you catch it soon, and realizing you’re missing valuable metrics and measures early on gives you a chance to get them.

Go forth and report!