How do I know if my website is performing well?
We believe the best way to evaluate the performance of your website is to consistently measure it using previously defined metrics, also known as key performance indicators (KPIs). A KPI connects your online marketing efforts with your overall business goals and should provide a clear picture on your online presence. In order to make reliable comparisons, it is important to maintain the same KPIs over time - only then will you be able to evaluate your online performance effectively.
What is a KPI and how do I define one?
KPIs, as described above, connect your online marketing efforts with your overall business goals. It can be broken down like this: Performance is the effectiveness of a thing/process in the completion of a goal, a Performance Indicator is a metric (=measure) of that performance. Therefore, a Key Performance Indicator is a metric that speaks more than others about performance.
It is important to not select too many KPIs. Why? Because too many become time-consuming and disruptive. We need to know if what we’re doing is going in the right direction and too many indicators can cause that direction to become unclear. Think of it like driving a car: there are a few KPIs on the dashboard, like the speed, amount of gas and temperature of the engine. These metrics give me the right amount of information to ensure I get to my destination. If I had more data, then I would crash because there would be too much information on my dashboard.
What is a good KPI?
- speaks of your business objectives,
- bases on reliable, accurate and obtainable data,
- keeps everyone & moving in the same direction,
- serves the business, not the ego,
- supports concrete actions you could take,
- is regularly revised to accompany business evolution.
How can good KPIs be structured?
An effective KPI combines both a metric and a dimension. A metric is a count, a ratio, a measurement, a stat, like for example the number of sessions on a page. A dimension is a part of the world where the metric applies, like users from a specific geography. So an example of a KPI could be: Number of sessions coming from Switzerland or Purchase rate for users that participated in a contest.
After defining a few KPIs, it's time to start monitoring it. You can either set it up as a goal or conversion in your analytics tool or simply take note of the event every period that you have defined. Over time, the different KPIs can be tuned and refined to better fit the activity on the website.
Hopefully these tips I gave you can convince you of the need for KPIs and help you with defining your own KPIs. If you have any questions, or would like Liip to support you with defining your KPIs, please get in touch with me! One of our analytics specialists would be happy to conduct a KPI Workshop with your and your team.