- KPI: Brief Summary
- KPI: Detailed Summary
- Content Marketing KPIs
- Other KPI Examples and Problems
KPI is an acronym, which stands for “key performance indicator(s)”. It is used to describe the measurable values that are selected by a business to serve as indicators of overall company performance. Essentially, businesses use KPIs to monitor their progress and evaluate their success in achieving key objectives. The specific KPIs pinpointed for tracking will depend on a number of factors, such as industry, type of business and company goals.
Business owners and management teams can utilise key performance indicators to determine how successful they are, or how successful they have been, with specific activities. Company management or departmental leaders will typically select their metrics depending on the specific aspects of their work that are important to them, and will monitor these metrics in order to evaluate overall performance, as well as to inform future strategic decisions.
Key performance indicators can vary drastically from one business to another. This is because different companies are likely to have completely different ways of defining and measuring success. For instance, the metrics that matter most to a news website or blog might include things like the number of page hits on an article, or the number of social media shares, while a retail company might be more interested in metrics like average purchase value.
At the same time, it is important to understand that KPIs may also be very different from one department to another, even within the same organisation. After all, the things that define success for a marketing department will be rather different from the measures of success for a sales team. In addition, the indicators of successful performance may change over time, so KPIs should evolve at around the same speed as strategies and objectives.
The overall purpose of establishing KPIs is to generate quantitative or qualitative measurements of results, which can then be compared to either long-term or short-term targets. This information can, in turn, be used by business leaders and management to analyse, control and adjust company activities. Ideally, for a metric to be considered a key performance indicator, it needs to be measurable, understandable and relevant to business or departmental success.
Although some KPIs can be measured sporadically, either at regular or irregular intervals, others need to be monitored much more closely. Indeed, if a KPI is able to change in real-time and that change can have a significant impact on a business, the KPI should be monitored in real-time. This can typically be achieved through the use of dashboard software, which can accurately depict up-to-date metrics.
Content Marketing KPIs
Within the field of content marketing, key performance indicators should be monitored in order to assess the effectiveness of a particular content marketing strategy. Today, there is a host of online tools available, including Google Analytics, which will help businesses to do this. Once again, the specific key performance indicators selected will depend on the overall aims associated with the content marketing strategy.
As an example, if audience growth is the primary objective, then metrics that may be useful to track include the number of website visits, the number of unique visitors, the site’s bounce rate, the number of registrations or newsletter sign ups and average amount of time spent on the site. Yet, if the goal is to sell a product, it would be sensible to monitor things like conversions, revenue and the total number of online sales, in order to see changes.
Broadly speaking, content marketing KPIs can be divided into three main categories, as follows:
Audience MetricsSales / Consumption MetricsSocial Media Metrics
- Audience Metrics – Page views, unique visitors, bounce rate, registrations, SEO rankings, etc.
- Sales / Consumption Metrics – Online sales, number of downloads, etc.
- Social Media Metrics – Likes, retweets, shares, comments, etc.
Depending on the content marketing strategy employed by a business, these metrics may be applicable to individual pieces of content, to a particular section of a website, such as the blog section, or to a website as a whole.
Other KPI Examples and Problems
Of course, key performance indicators can be used in a whole range of fields aside from content marketing. In actual fact, KPIs can be of value in almost any field where the concept of ‘success’ can be defined, measured and realistically achieved. As a result, the use of KPIs can be observed in fields as diverse as retail, manufacturing, telecommunications, financial services, hospitality and even politics.
Some KPIs are very specific to their industry. For instance, in the hotel industry, metrics like average daily room rate and revenue per available room are utilised, but these are not applicable in other industries. Similarly, an IT department might use KPIs like the average time between failures and the average time for repairs. On the other hand, some KPIs, such as revenue, staff turnover and customer churn, are much more general and form the important KPIs for management in many industries.
It is worth noting that there are some potential problems with using key performance indicators as a means of measuring success. One of the biggest issues is that some of the most crucial aspects of business success are abstract ideas, which may be difficult or even impossible to measure accurately. Moreover, depending on the metrics involved, continually tracking KPIs can be expensive, time-consuming and prohibitively difficult.
The purpose of KPIs, or key performance indicators, is to allow business owners or managers to monitor activities or processes within their organisation and make evidence-based judgements about how successful they are. In order to achieve this, the results associated with specific activities or processes are measured and compared against the aims, objectives or targets of the business or department in question.
KPIs can allow business leaders to track the overall performance of their business, or specific aspects of their business, and make strategic adjustments if necessary. Effective use of KPIs relies on business management choosing the right metrics and the specific KPIs that are chosen will depend on the nature of the business, the industry it is in, and the things that are most important when it comes to judging success or failure.
For this reason, KPIs can vary significantly from industry to industry, business to business and even department to department. Some KPIs are industry-specific, while others are more general. As an example, within the field of content marketing, some of the most important metrics may be things like page visits, unique visitors, conversion rates, bounce rates and average time spent on a page; yet these may not apply to other businesses at all.
Nevertheless, the use of KPIs is by no means foolproof and there are some potential issues to be aware of. Choosing the wrong metrics can fail to give an accurate depiction of the success or failure of an organisation, while some of the prerequisites for success may be fundamentally ‘unmeasurable’. Furthermore, understanding and analysing KPIs properly can take time, cost money and require specialist skills, knowledge or technology.