Key performance indicators (KPIs) are a handy tool that allow us to track specific online metrics, such as follower count and the number of likes on social media or a website. For the most part, the higher these numbers, the better the website’s performance… but is this all there is to KPIs? Or are there more important metrics to track? Join Wordsmith and let’s explore how we can expand KPIs beyond the superficial!
When KPIs get misused and misunderstood
According to Anna Johansson, an Entrepreneur contributor and freelance writer specialising in social media and business development, KPIs once served nobler purposes – they were reliable data points that helped to guide business decision making.
Today, Johansson argues that KPIs have been relegated to a mere vanity metric for many businesses. “Put simply, vanity metrics are metrics that make you feel good about a specific outcome or strategy, without really providing information on how things are running,” she explains.
Using follower count as a prime example, it’s one of the first things we notice when clicking onto a business’s website or social media page – it’s strategically placed out in the open because many businesses (and influencers) love to flaunt their numbers and use that as a measurement of their success. “It does have some value, and it certainly feels good to see your follower count increase…,” Johansson writes. “But your followers have little to do with more measurably impactful things like follower engagement, brand awareness, conversions or revenue generated.”
Johansson then points to the “net promoter score”, aka the annoying pop-up that asks you how likely are you to recommend the business to others. Since this metric is often laid out in a scale of 0-5 (with 0 being never and 5 being very likely to recommend), seeing a score above 4 would seem to say that a business is performing well. However, Johansson feels that this score doesn’t give you the full picture – there’s no specific details behind the customer’s thought process nor does it tell you their motivations. Without knowing the details about what they liked or disliked, it’s much harder to take meaningful action to improve.
Some conniving analysts also like to exploit KPIs by cherry-picking data. Johansson creates a hypothetical scenario where a difficult-to-implement strategy resulted in good ratings – an honest analyst might say that it was a fluke and too difficult to replicate because of the number of hurdles needed to clear, but a dishonest one might praise the strategy and recommend it for other projects as well. “Data points can sometimes become crude tools with which we simply assert our previously formed opinions,” Johansson describes. “In their best applications, KPIs should challenge us and force us to think critically.”
Lastly, given how obsessed businesses are with achieving annual/periodic growth, KPIs get lumped together with embedded growth obligations (EGOs). For example, if a company achieved 10 percent growth this year, it’s become commonplace to expect similar (or even greater) levels next year – so management pushes out new strategies in the hopes of keeping the growth engine running… but since permanent economic growth is both incredibly difficult to attain and impractical to expect, the engine inevitably stalls or breaks down. “Obviously, incremental growth is a net positive in most cases, but sometimes, it’s better to take a short-term KPI loss in pursuit of a more fundamental, disruptive change that leads to better long-term results.”
What we should be doing with KPIs
The ideal number of metrics to track depends on a number of factors, including your industry, location and audience.
Let’s assume we run a standard business website – beyond the usual likes and follower counts, what should we be tracking? Marketing guru Neil Patel recommends focusing on:
1. Conversion rate
Having a fancy website is good for show, but if your audience aren’t making conversions, then you’re losing out on potential engagement and sales. “When you track your conversion rate, you gain viability into the quality of your leads, as well as how effective your website is as a whole,” Patel writes. “If you have a low conversion rate and high traffic, you can infer that your on-page conversion tactics are not working as well as those off-site.”
Are your call-to-actions unclear? Are they too pushy? Is your page layout difficult too difficult to navigate? Just some things to consider!
2. Top pages
It’s a no-brainer why you should know which pages are getting the most hits and conversions (and which aren’t). By comparing the two, you should be able to work out what elements are and aren’t working for your content.
3. Keyword rankings
Although most people associate keywords with SEO, Patel believes that keyword rankings are among the top KPIs that you need to consistently track. “These terms allow you to double-check that your SEO strategy is working and can help you tangibly measure your progress,” he argues.
While likes and follower numbers are important, they shouldn’t be the only defining metrics of a brand or website’s worth. To measure meaningful success, consider the factors that truly make a difference to your business performance, then track your KPIs over time and measure how they change. If you find you could use some help with copywriting, speechwriting or corporate communications, remember to give your local Wordsmith a call!