KPIs: what are the key indicators for company performance
They are not just numbers, but essential tools for measuring and improving the performance of our strategies in every area of business, including digital marketing and SEO. KPIs, or Key Performance Indicators, are key metrics for managing and controlling business performance, allowing us to assess the effectiveness and efficiency of an activity in relation to the set goals. Most importantly, they provide us with concrete and measurable data that help us understand whether we are achieving our business goals. In a context where dynamics are changing rapidly and competition is increasingly fierce, monitoring the returns of strategies is as crucial as the type of intervention we have decided to apply.So let’s try to take an overview of this topic, identifying what KPIs are, which are the main ones, and which indicators are specific to SEO, in order to make informed decisions and optimize our campaigns.
What KPIs are
KPIs are specific metrics used to evaluate the effectiveness of a specific activity or strategy in achieving its goals.
KPI is the acronym for Key Performance Indicators: in short, they are specific metrics that allow organizations to monitor and evaluate the achievement of their objectives, production, commercial, financial and organizational processes, departments and employees, measuring the success or failure of a given activity and, in general, to keep track of their health.
KPIs can be used in different business areas, such as production, sales, marketing, human resources and finance; each area may have its own KPIs, but there are some metrics common to all organizations, such as profitability, turnover, profit margin and market share.
Definition and meaning of Key Performance Indicators
These indicators give us a clear and detailed view of the performance of our campaigns, helping us to identify what is working and what is not.
In general, these indicators are a valuable tool for monitoring business performance and identifying possible areas for improvement, but it is important to choose the metrics to be monitored carefully to avoid bias in performance evaluation and to make sure that the goals set are actually consistent with the business strategy.
It is not easy to identify and define KPIs, because it is first necessary to be clear about the goals you want to achieve and then determine which metrics are most appropriate for monitoring their achievement.
We can then define KPIs as situational and specific to each type of activity; in any case, regardless of the sector each KPI must be measurable, quantifiable and easily understood by all members of the organization. They also need to be regularly updated and reviewed to make sure they are still relevant and useful to the brand.
An interesting element of these metrics is that they do not always and do not necessarily have to show values that indicate growth or success; on the contrary, they can also be metrics that show where improvement is needed, strategy failure KPIs that can be useful for us to identify new areas to instead find success and increase sales, conversions, and other positive metrics.
Without KPIs, we would risk navigating by sight, relying on hunches and assumptions rather than hard data: indicators, on the contrary, provide us with the compass we need to guide our strategies, optimize resources and maximize return on investment, i.e., ROI.
What KPIs are for?
The most immediate meaning of KPIs is to provide a complete picture of the organization’s performance and help make data-driven decisions; by focusing specifically on the less positive areas, then, we can identify any problems or areas that need improvement, and act promptly to correct them, putting in place corrective actions and targeted strategies to optimize results.
In summary, KPIs are a key tool for measuring an organization’s success and improving its performance. Their definition and constant monitoring enable you to gain a competitive advantage in the marketplace and achieve your goals. In addition, they can become a way to engage and motivate employees, as setting clear and measurable goals allows them to improve their performance and clearly and transparently display the results of specific activities.
In order for the data obtained to be useful, however, we must learn how to read and interpret KPIs, paying attention first to their nature: for example, some KPIs can be measured in quantitative terms (such as the number of website visits), while others can be evaluated qualitatively (such as customer satisfaction), and it is up to us to choose a measurement method appropriate to the type of indicator selected.
Most of all, we must remember that KPIs are not an end in themselves, but must be used to make strategic decisions and improve business performance.Therefore, after obtaining, reading and interpreting the data correctly, we cannot miss the application stage, and then use this information to make informed decisions aimed at improving the effectiveness of business activity.
What kind of KPIs there are: types and characteristics
KPIs can vary widely depending on the type of business and the objectives set, but their main function remains to provide concrete, measurable data on which to base our strategic decisions.
Generally speaking, the definition of KPIs depends on the specific needs of the company, but generally at the macro level we can primarily distinguish between financial and non-financial KPIs.
The former are related to economic factors such as turnover, net profit, ROI, contribution margin, while the latter concern qualitative aspects such as customer satisfaction, customer response time, service level. For example, a financial KPI could be the quoted turnover, which indicates the value of the company’s total sales in a given period, or ROS (Return On Sales), the ratio of net profit to turnover.
A non-financial KPI, on the other hand, could be the customer satisfaction rate, which measures the level of customer satisfaction with the products or services offered by the company.
According to other views, non-financial KPIs are more precisely divided into the process and customer satisfaction categories: the former includes productivity, efficiency and quality of internal processes, while the latter measures customer satisfaction with the products or services offered by the company.
Broadening the picture, the different types of KPIs include:
- Quantitative KPIs: they measure objective data such as sales volumes or number of customers.
- Qualitative KPIs: refer to subjective values such as customer satisfaction or company reputation.
- Operational KPIs: measure the effectiveness of the activities carried out by the company.
- Strategic KPIs: assess the achievement of the company’s long-term goals.
Continuing with examples, KPIs may relate to the company’s market share, sales conversion rate, average response time to customers, employee satisfaction level, profitability of production activities. What is important is to identify the right metrics for your needs and goals that will help you make informed and strategic decisions to improve the efficiency and competitiveness of your business.
The main KPIs in digital marketing
If, on the other hand, we focus only on digital marketing, we find at least 4 examples of relevant and strategic KPIs to monitor and consider in order to assess the efficiency of our work.
- Web traffic KPIs
Web traffic KPIs are among the most common and include metrics such as visits, sessions, and unique users. These indicators help us understand how many people visit our site, how much time they spend on it, and what pages they visit. For example, an increase in visits may indicate that our SEO and social media marketing strategies are working. However, it is important not to stop at the surface: a high number of visits may not necessarily translate into conversions, so it is critical to analyze other metrics as well to get the full picture.
- Engagement KPIs
Engagement metrics, such as average time on page, bounce rate, and social interactions, are crucial to understanding how interested our audience is in our content. A high bounce rate, for example, could indicate that visitors do not find what they are looking for on our site and quickly abandon it. Conversely, a high average time on page may suggest that our content is relevant and engaging. Social interactions, such as likes, comments, and shares, give us further indication of our audience’s interest and engagement.
- Conversion KPIs
Conversion KPIs are perhaps the most important, as they measure the effectiveness of our campaigns in generating sales or leads. These include conversion rate, cost per conversion, and average order value. Conversion rate tells us how many site visitors complete a desired action, such as making a purchase or signing up for a newsletter. Cost per conversion helps us understand how much we are spending to acquire a new customer, while average order value gives us information about the economic value of our conversions.
- Retention KPIs
Retention KPIs, such as customer return rate and customer lifecycle value (CLV), are critical in measuring the ability to retain customers over time. A high customer return rate indicates that our products or services meet customers’ expectations, leading them to return for further purchases. CLV, on the other hand, provides us with an estimate of the economic value a customer will bring to our company over the course of their relationship with us. These KPIs are especially important for companies that focus on loyalty and long-term growth.
How to make the selection of relevant KPIs
Not all KPIs are equally important for every company or campaign. It follows that selecting relevant KPIs is a crucial step: we need to set the right metrics, the ones that have a direct impact on our business.
For example, if our goal is to increase brand awareness, we might focus on KPIs such as impressions, page views and social media interactions. On the other hand, if we aim to increase sales, conversion KPIs and average order value will be more relevant. The selection of KPIs should be guided by business objectives and the specifics of our industry and audience. And only awareness and clarity about the business objectives allow us to select the most relevant KPIs and, at the same time, avoid wasting energy on metrics that do not directly contribute to achieving our goals.
The elements to evaluate for an effective KPI
A KPI is only truly effective if it can provide a clear and consistent measure of the success of a specific activity or process.
Staying in the general realm, we can identify a number of crucial factors that contribute to the effectiveness of a KPI and all these indicators:
- Relevance. The KPI must be relevant to the objective of the activity or process we want to measure. There is no point in using a KPI that does not provide meaningful performance information.
- Specificity. The KPI must be specific and define precisely what we want to measure. It must be possible to clearly identify what constitutes the success of the activity or process.
- Measurability. The KPI must be easily measurable and the metrics used to calculate it must be reliable and accurate.
- Frequency. The frequency with which the KPI is measured must be appropriate to the time needed to make any corrections.
- Interpretation. The KPI must be easily interpretable so that managers can make quick and effective decisions when needed.
- Involvement. Employees must feel involved in achieving the goals associated with the KPI so that they can actively contribute to the success of the activity or process.
- Alignment. The KPI must be aligned with the overall strategic goals of the organization to ensure consistency between the results achieved and the long-term goals of the company.
Defining a Key Performance Indicator is therefore critical to measuring the success of a company or project, and absolutely this indicator must be linked to the goals of the company or project-for example, if the goal is to increase sales, the KPI could be the number of new customers acquired each month.
Second, the KPI must be clearly measurable and quantifiable-if the KPI is customer satisfaction, a survey could be used to collect the data.
In addition, the KPI should be realistic and achievable: there is no point in setting an unattainable target that might demotivate employees or stakeholders involved.
Finally, the KPI should be updated regularly and monitored closely to assess whether the goals have been met and make any changes to the action plan.
For example, if we want to evaluate the effectiveness of a social media advertising campaign, the goals could be to increase the number of views of the post, get a specific number of likes or shares, bring traffic to the website. To identify the appropriate KPIs, therefore, we need to start by first defining the specific goals of the activity to be measured, and only then identify the most appropriate metrics for each end. For example, for the first goal we could use the number of views of the post as the KPI; for the second goal we could use the number of likes or shares as the KPI; for the third goal we could use the traffic generated to the website as the KPI. In addition, more than one KPI can be used to evaluate the performance of the activity.
How to choose a KPI?
With this in mind, we can try to outline what steps are needed to create an effective KPI, which obviously requires careful planning and a thorough understanding of the company’s goals.
- Define the goals. Before creating a KPI, we need to define the goals of the company or department, which will be specific, measurable and realistic.
- Identify the metrics. Next we need to identify the metrics that can help measure the achievement of the goals: for example, if the goal is to increase sales, the metrics could be monthly sales or the number of customers acquired.
- Select KPIs. Based on the metrics identified, we can select the most relevant KPIs to monitor progress toward the set goals. It is important to choose KPIs that are in line with the company’s goals and can provide useful information for making strategic decisions.
- Define metrics. Each KPI must have specific metrics to ensure that its progress can be monitored over time. For example, if the KPI is the conversion rate into actual purchases of website visits, the metrics could be the number of visits to the website and the number of purchases made.
- Monitor and analyze the results. Ultimately, it is important to monitor the results regularly to identify any problems or opportunities for improvement. Analysis of the data collected can help make informed decisions and modify strategy if necessary.
In this context, effective has a very specific meaning, namely useful for brand and business growth: fundamentally, KPIs provide key data and information about the company’s performance, enabling more informed decisions and thus improving the chances of success in today’s competitive marketplace.
Only by adhering to these principles can we effectively leverage the indicator to measure business performance and assess the goodness of the actions taken, ready, if necessary, to act quickly and promptly in case of deviations from the set goals.
Examples of key performance indicators and strategic applications
Concretely, we can use a few examples to understand how to apply a KPI to measure the success of a business in a specific sector (including non-web).
For manufacturing companies, for example, production efficiency is an important KPI: the metric indicates the amount of product produced relative to the time and resources used, and in a nutshell, a high level of efficiency indicates that the company is producing a large amount of product with few wasted resources.
Moving on to topics more related to us, in email marketing campaigns, email open rate, a metric that measures the percentage of recipients who actually opened the email they received, can be useful. A high rate indicates that the email subject lines and content are interesting to the recipients, whereas a low rate should prompt us to change the copy.
Finally, e-Commerce cannot do without measuring the conversion rate, which reports the percentage of site visitors who actually complete a purchase. A high conversion rate indicates that the website is effective in convincing visitors to buy, while a low percentage is a sign of problems, which can be of various kinds.
Remaining in the Web field, key performance indicators are important elements in digital marketing precisely because of their characteristics, that is, because they make it possible to measure the effectiveness of advertising campaigns and to monitor the performance of set goals.
In addition to those already analyzed when talking about Content KPIs (the indicators for measuring the effectiveness of content and content strategy), the main KPIs used in digital marketing include:
- Conversion Rate: the conversion rate, which as mentioned represents the percentage of users who complete a desired action (e.g., purchase a product or fill out a form).
- Cost per Acquisition (CPA): the average cost incurred to acquire a new customer.
- Return on Investment (ROI): the return on investment, i.e., the ratio of earnings to investment costs.
- Click-through Rate (CTR): the percentage of clicks on an ad relative to the number of views.
- Cost per Click (CPC): the average cost incurred per click on an ad.
These metrics, and generally any other KPIs that may be appropriate for your company, service or business, allow you to assess the effectiveness of your marketing strategies and make any adjustments to optimize results, so that you make decisions based on data and not on intuition.
Monitoring and analyzing KPIs: useful techniques and tools
Once KPIs have been defined, it is essential to monitor and analyze them regularly. This allows us to identify any problems early and make necessary corrections to our strategies. Using analysis tools and dashboards helps us keep track of performance in real time and visualize data in a clear and understandable way. KPI analysis should not be limited to simply looking at the numbers, but should also include interpreting the data to understand the underlying causes and possible corrective actions.
Google Analytics is one of the most powerful and versatile tools for monitoring traffic and engagement KPIs. In fact, with Google’s platform we can track a wide range of metrics, from site visits to conversions to user behavior and traffic sources. This tool allows us to segment data by various parameters, such as geographic origin, device used and acquisition channel, giving us a detailed view of our site’s performance.
Our SEOZoom is a specific software for monitoring KPIs related to SEO and content marketing. With the various tools we can analyze the performance of our keywords, monitor search engine rankings and evaluate the effectiveness of our content. In addition, we also have valuable insights on competitors, so we can compare our performance with that of our main competitors and identify opportunities for improvement.
How to optimize KPIs
To optimize KPIs and improve the performance of our campaigns, it is important to take a systematic and continuous approach. This includes clearly defining business objectives, selecting relevant KPIs, regularly monitoring performance, and thoroughly analyzing data.
Indeed, we must understand that optimizing KPIs means not only monitoring them, but also taking concrete actions to improve the metrics that matter most to our business.
This means setting clear objectives, selecting relevant KPIs, monitoring them regularly, and analyzing the data through the use of advanced analytical tools and, above all,a “data-oriented” approach, which will help us make more informed decisions and maximize the return on investment of our marketing activities.
Indeed, KPIs provide us with the information we need to evaluate the performance of our campaigns and identify areas for improvement. Without these metrics, we risk basing our decisions on hunches and assumptions, with the risk of wasting resources and not achieving our business goals.
KPIs for SEO: what they are and why they are important
It should therefore be obvious that KPIs also have a decisive weight in SEO, because they are the fundamental tool for measuring the effectiveness of the optimization activities we have applied, helping us to assess the success of our work by monitoring website performance in terms of – first and foremost – traffic, visibility and conversions.
In fact, without defining, monitoring, and analyzing the SEO KPIs that matter for our site, we have no way of knowing whether our efforts are successful; moreover, only KPI analysis can help us define and manage the expectations of clients, stakeholders, and business partners, who by following the evolution of the metrics can assess the progress and impact of the work.
Broadly speaking, KPIs for SEO take into account all performance indicators that measure page returns in terms of organic traffic, ranking on Google, conversions, but also keyword targeting, internal linking, and backlinking – after all, the ultimate goal of SEO is to generate traffic through the visibility achieved on search engines, so as to direct customers searching for specific keywords to the right landing page, optimized for conversion to action.
The best way to measure SEO performance is to use specific tools: for example, Analytics is undoubtedly the reference for collecting and analyzing data on website usage, while SEOZoom can support us in discovering the more purely “SEO oriented” indicators, as well as performing broader site and page analyses to determine the pages with the best performance, the keywords with the most relevant search volume or those with the highest number of conversions, or even the website content that needs to be optimized for search.
To summarize, the main SEO KPIs include:
- Search engine ranking, which indicates the position of our website pages in Google’s SERPs, the first signal of whether our optimization activities are yielding the desired results.
- Organic traffic, the figure that indicates the number of visits to our website from search engines.
- Conversion rate, which measures how many users who visited our website performed a certain action (e.g., purchased a product or filled out a form) and whether we were able to convert users into customers and leads.
- Bounce rate, the percentage of users who leave our website after visiting a single page. A high bounce rate could indicate problems in site structure or content quality, but much depends on the context and specificity of the site.
- Backlinks, amount of hyperlinks found on other websites pointing to our pages, which can act as votes and “letters of recommendation” to Google about our site.
From a practical point of view, it is more appropriate to examine goals based on percentage-based metrics, not just absolute values of raw events: for example, if organic traffic is increasing but, at the same time, the conversion rate to the goal (expressed as a percentage) is decreasing, perhaps the organic campaign is not as efficient as it could be. Or again, opposite case, if traffic is decreasing but the conversion rate to target is increasing, we are probably tapping into a more targeted, action-ready target audience.
Eight SEO KPIs to monitor
In addition to these key indicators, which are, so to speak, “obvious” and elementary, Roger Montti suggests considering at least eight other KPIs for SEO that are somewhat less well known, but just as useful for understanding whether we are achieving our goals-which, we reiterate, is what distinguishes KPIs from simple metrics-always with the understanding that KPIs are situational and that every business model has different goals.
- Customer Lifetime Value (CLV), a metric that measures the gains each customer brings in. In the context of SEO, CLV helps a company identify which SEO activities have the greatest positive financial impact and involves the entire team because it affects the entire funnel, all people, all skill levels of future and present customers.
- Content Efficiency, which is about optimizing content not only for search engines, but also for achieving business goals for that content. It can be defined as “number of content items published, updated and/or optimized versus the frequency with which those pages meet their goals and expected ROI.” Using content efficiency as a KPI, we can set up a data-driven decision-making process on what to create and what to update.
- Average Engagement Time, which indicates the average amount of time the site was active in the user’s browser-a likely sign that the user was looking at it.
- Visibility in Search. Today’s Google SERPs no longer consist only of the 10 blue links, as we know, and there are so many other elements that need to be considered to accurately assess search visibility. Ranking alone, for example, does not examine factors such as PPC, Knowledge Graph, featured snippet and other features that appear on the page, which also make the first position less visible than in the past. Therefore, SEOZoom performs a real-time SERP analysis, which immediately informs not only page rankings, but also the actual pixel position of results, the presence of any additional boxes and features, and so on.
- Brand visibility. Each brand should then also analyze its overall representation in the SERPs, i.e., monitor the share of the results it dominates with its own resources, in terms of not only branded keywords and content on the main/official site, but also social media profiles and posts, YouTube videos, presence on Google Images, Knowledge Graph results, and anything else that might be a good representation of the brand and that helps drive sales and brand awareness.
- New and Returning Users. Using New and Returning Users as a KPI can help us optimize Web pages to increase conversions, particularly for B2B Web sites. Compared to the other metrics (which, as mentioned, are situational and depend on the type of site and who the visitors are) where the site visitor has to take a specific action, a conversion event, usually through a click, in this case we use analytics tools to get a completely different view of which pages on a site are most valuable to a specific segment of visitors. New users and return users tend to access the Web site through different landing pages, because new users are usually more likely to visit the site for discovery and return users are more likely to visit the site for conversions, and knowing which pages each segment tends to move to during their conversion journey helps SEOs create content that best matches the site visitor’s intentions. We can also find out which users are the most valuable, those who actually generate the highest returns.
- Average Time on Site: usually, it is seen as a KPI to be used to try to measure the effectiveness of content on different web pages, but there are actually some limitations to keep in mind before using it as a way to measure engagement success or lack of success of the content strategy. In particular, average time on site can be a bit misleading because the data is terrible if you do not exclude bounces and if you do not properly evaluate the nature of the content and the goal it is intended to achieve-think of affiliate pages, for example, which by nature must lead people to complete the action elsewhere.
- Revenue Per Thousand (RPM) and Average Position. The RPM (revenue per thousand impressions) figure is a way to calculate the value of to traffic, particularly for ad-supported Web sites, while the Average Position is a keyword ranking metric provided by Google Search Console. Both of these KPIs can work together to identify keywords and Web pages that need improvement: RPM can be a good way to measure changes over time and assess how a change to a web page affects revenue, and in optics it is a good starting point for assessing what types of topics have a good combination of traffic and high earnings. Low Average Position keywords, on the other hand, provide targets to increase traffic and broaden search visibility: for example, we can optimize content by adding a paragraph to expand a topic covered only superficially, or create a new page to focus the topic.
