The KPI's are the best way to analyze the results, because they present through numbers and metrics the result of each of your company's actions, and if they are bringing the desired ROI.
For a strategy to be really successful, it is necessary to always follow the performance of your company's actions. To have an idea of what has already been done, what was successful, and what was not so successful, all this data needs to be documented and analyzed every time a new action is performed.
One way to monitor the results of your strategy is through key performance indicators, or KPI's (Key Performance Indicator), which are basically highly relevant metrics to measure the results of your business, and a great starting point for strategies and management processes of the areas of a company.
How to choose KPI's for your business?
To choose good KPI's for your company, you need to understand that each one of them will help you make smarter and more assertive decisions. They are the ones that will measure the performance of each of the objectives outlined within your company, so they need to be deeply linked to these objectives.
In addition, the indicators that will be analyzed need to be carefully chosen, to show the effectiveness of the actions. Wrong indicators can give the impression that all actions are going well when, in fact, they are not. When choosing a KPI, keep in mind these 5 characteristics:
It is not possible to make an accurate analysis if your KPI's are not measurable. You need to have a sense of evolution, and measurable data from your business will be indispensable to qualify your action steps.
Look for the right information, where to find it, who will be responsible for measuring it, and how accurately you can measure the results of your strategy.
Being important to the business
A good KPI needs to indicate whether your company's strategies are generating expressive results or whether your goals are being met.
Focus on the data that is significant to your business, try to get away from vanity metrics, those that seem expressive, but that don't show concrete results. If your business wants to improve customer relations, for example, focus on customer service metrics and NPS.
Always perform an audit to evaluate the relevance of KPI's, some of them lose their value as the strategy evolves, so try to evaluate every 4 to 6 months the efficiency of your KPI's.
Help decision making
Each of the results measured in your KPI's need to help you make smart decisions, such as understanding which sales channels work best for your audience, if your social media approach is in line with your persona's profile, or even which campaigns make sense for your business.
Be measurable periodically
Finally, a KPI needs to be constantly measured, to understand what works in your strategies, what can be removed and replaced, and even to change processes according to the data obtained.
These periodic analyses, besides helping to understand if the ROI of the actions is interesting, also serve to motivate the teams, apply new strategies, and plan for the next objectives of your business.
E-commerces can also use KPI's to monitor the growth of their operation. Understanding if your average ticket is increasing, or how the average revenue of transactions on your site is doing, are just a few metrics that can be linked to your goals.
You can track the pages with the highest abandonment rates, cart abandonmentrates, time to purchase, and understand what actions can be taken to improveuser satisfaction rates and your company's bottom line. KPI's are sure to help.
If you do not yet manage the KPI's of your e-commerce, maybe our "Template for KPI' s management " can help you. In it you can find some important KPI's for your operation, marketing, customer service and logistics. Just download it and start using it!
Read also, the "CEO Talk: What is making customers more profitable?"
Do you already perform KPI management in your company? How is it done? Leave it in the comments.