This is how you determine the KPIs that will make the difference

The power of KPIs and the most common mistakes

  • Article
  • Data Analytics
Rogier Kamer development manager Digital Power
Rogier Kamer
Development Manager
9 min
25 Aug 2019

Key Performance Indicators or KPIs are indispensable to keep track of the performance in an organisation in a practical way. It is therefore important to choose the right KPIs and to keep a clear distinction between KPIs and PIs. In any case, KPIs must match the mission and vision of your company. In this article, Rogier explains how to determine your KPIs and shows you the most common mistakes.

Everything you need every day to function well is worth measuring. The question I ask here is this: "What changes in your day if this report/dashboard says: [Place fictitious answer here]? "If the answer is that nothing will change, then you should already be asking yourself whether you should view this data on a daily basis. KPIs have to directly influence your work (or your life), otherwise they probably won't be needed on a daily basis.

To give you a better understanding of how the KPIs can be reflected in your daily life, I have the following personal example for you.

Personal KPIs 

Keeping track of and timely adjusting daily necessities in the form of KPIs is necessary for a good start of the day. After all, what would that start be like without toilet paper, milk/coffee/tea, hot water, bread, deodorant, toothpaste and clean underwear. Add to this all the maintenance on your car and the required gasoline, after all, your car has to start when you have to drive to work, and you have a large dashboard that you have to keep track of. Incidentally, more things are involved, but the household does not stop if the dishwasher tablets are used up. And of course 'drying off' with a wet towel is not pleasant, but it is doable.

Of course there are other necessary items for your specific household, because I also had doubts about dry towels, but you get the picture. You always want to know the stock of these 'life-saving' items. These things are checked daily, come back to my to-do list every week and they are the first thing I look at when I get back from vacation.

Now I'm an analyst, and probably a neurotic, so every Saturday morning I'm doing my shopping list around nine o'clock. Very methodically I go through all the cupboards and note what I am lacking, with an emphasis on my KPIs. But if I'm not there and my girlfriend does the shopping, I could run out of coffee. She does not drink coffee and will therefore not have this high on the list to check for stock.

How do we determine our KPIs? 

The above sample from my life indicates the importance of a KPI dashboard. It even indicates what the desired action is: if the stock does not meet a desired level, it must be replenished. Before we can determine what is reported on the dashboard, we must first determine what our KPIs are. In order to determine that, we will need to know what our tasks/wishes are.

In the example above it is clear what I want, and you will also have to do this exercise for your position. Sometimes targets are imposed from above, sometimes you can set them yourself, but with all these wishes make sure that they match the mission and vision of the company.

Performance Indicators (PIs) 

If we continue on my personal KPIs, my mission is to leave the house calm and well-groomed in the morning. In my view, a calm and well-groomed appearance ensures good results on the day, which will benefit my immediate environment.

I have attached the following goals to that: Breakfast, have a drink, shower, use deodorant, brush your teeth, wear clean clothes, toilet paper speaks for itself, just like a car that you don't have to push to get away. A clean bed is desirable, but no need to leave peacefully and well-groomed. A tidy attic is nice, but will not improve my mission and vision.

The danger of KPIs 

The danger in converting these goals into KPIs is that you include too many goals. In addition to previous examples, a well-groomed appearance can also be achieved by using gel, some perfume, freshly ironed trousers and a shaved face. But these are not on the KPI list, because they are not Key Performance Indicators, but Performance Indicators. They are important enough to measure and care for, but they are not 'Key'.

If these were also on the dashboard, there would be too many KPIs to keep track of. As a result, we no longer look seriously at the dashboard and all our work would have been for nothing. So make sure that you do not have too many, but certainly not too few KPIs to report on and that they are based on your vision and mission.

Connecting with the mission and vision 

In principle, everyone needs their own KPI dashboard. Your daily work is geared towards the goals you want or need to achieve. To keep an eye on these goals and to be able to adjust your efforts, you need a KPI dashboard. But an online campaign marketer can perform few actions on a KPI which is for content managers and related to the homepage. The KPI itself is not bad, but it is superfluous for this target group. So make sure that the KPIs stem from the mission and vision of the company and that they align with the group receiving them.

In addition, the question that should actually be asked is not 'who is this dashboard for? ', but rather 'what action do we take based on these KPIs? For each KPI you should ask this question: If this figure is below/above point x, what should I do? If there is no good answer to this question, then the question is immediately whether this KPI is right for for you. Because every KPI should have an action. If it cannot be linked to it, then it is a 'nice-to-know', in other words; very nice to know, but not necessary for day-to-day business operations.

Choosing your KPIs 

To include the relationship between the company's mission and vision and your efforts in your dashboard, consider showing some indicators that at a higher level show how your KPIs contribute. For example, think of total online sales if you are responsible for the online sales of a certain product, or customer satisfaction if you are involved in optimising the digital self-service environment on a daily basis. Make sure that it is clear that these indicators are not KPIs, but only serve as context for what you do on a daily basis.

KPIs per job 

The other KPIs you show depend on your job and position. As a web analyst, you'll tend to opt for traffic KPIs, especially to your important pages. After all, your day changes immediately if peak visits are visible somewhere. Browsers and devices will come back often and of course the funnels of the main processes, 404 pages and internal keywords. PIs that will come back are the Total Online Sales and NPS score.

For an online marketer, the primary importance is to look at conversion, funnels and campaigns. Underlying KPIs are then origin, failure rate and conversion rate. Supplemented with PIs such as total online sales, product-not-found related pages and perhaps campaign costs.

KPIs on other types of websites 

Information sites, or blogs, also have KPIs. First of all, of course, the traffic KPIs, how many visitors, when and what content. But the click-through rate after reading the first content is also important. This can be expressed, for example, in page views per visit. And finally, interaction through the number of comments and shares via, for example, Facebook can help.

I have now defined more than 400 different KPIs for various types of websites, each with its own action. Make sure your KPIs are in line with the user and be flexible enough to change them in the meantime if they are no longer needed.

Common mistakes 

It is still easy to place a mistake in your KPI dashboard. A KPI without action sometimes gets more attention than it deserves. Sometimes an incorrect KPI is also chosen, which does have an impact. Time-on-site is an example of this. A visit taking more than two minutes can be interpreted both positively and negatively. In this case, this is a supporting metric; this can have an impact but should not be the main goal.

Another common mistake is choosing a KPI over which you have no influence. In my case, my calm and well-groomed start to the day would improve if the weather is good and sunny. However, it cannot be called a KPI because of course I cannot exert any influence on it. Other recognisable KPIs are 'online share in total sales', because this can be influenced through budget allocation, but often not at the level at which it is reported.

So pay close attention to all your KPIs whether they are 'actionable' and whether they match your mission and vision, and use them to change your day.

Do you want help determining your KPIs? Our Data Consultants have extensive experience in organising KPI sessions and building KPI frameworks. Contact us for advice or request a KPI inspiration session without obligation. 

This is an article by Rogier Kamer, Data Strategy & Data Academy Manager at Digital Power

Rogier is a pragmatic analyst to the bone. "Start with the basics and work from there to the future" is his credo. His heart lies in transferring knowledge and setting up processes to improve online understanding. In addition, he is always looking for opportunities to increase the value of online and to emphasise the importance of web analytics.

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