Every organization works with a specific goal or purpose in mind. Whether your performance goals are related to inbound sales, marketing, or any business aspect, choosing the right key performance indicators (KPIs) is the first step towards improvement. There are many types of KPIs that vary based on the business’s requirements, goals, and various other factors. However, these KPIs prove to be effective only if they are chosen carefully. So, how do you select the right KPIs for your business? In this article at Search Engine Land, George Nguyen explains what you must consider while choosing KPIs and how to boost your most important metric.
Difference Between KPIs and Metrics
Metrics and KPIs measure various aspects of performance. Metrics assess the status of a specific process. In other words, metrics help you track certain aspects of your business activity. On the other hand, KPIs fall within the greater definition of a metric. They are related to strategic business goals and reflect how successful your business is at achieving those goals.
Which KPIs Should You Focus On?
KPIs Must Relate to Your Business Goals
“It’s important to delineate between short-and long-term goals — think about how frequently you need to evaluate performance or make changes, as this interval will depend on the nature of your business and the sector it operates in,” explains George. While setting KPIs, ask yourself the following questions:
- Is your business sensitive to external factors such as market demand or seasonality?
- Is your KPI related to improving the return on investment of marketing efforts or enhancing customer service?
- What numbers signify short or long-term business performance?
- How can you measure your business effectiveness?
Consider Your Company’s Stage of Growth
Certain metrics will be more critical than others, depending on your company’s stage of growth. If you are a startup, focus on metrics related to business model validation. If you are an established organization, you must focus on metrics like cost per acquisition and customer lifetime value.
Identify Lagging and Leading Indicators
The difference between lagging and leading performance indicators is understanding how you have performed versus how you are currently doing. Leading indicators measure progress, inputs, and the likelihood of achieving your organizational goals. Lagging indicators measure the output of something that has already happened.
Read the original article by clicking on https://searchengineland.com/selecting-better-kpis-for-your-business-what-to-consider-and-how-to-bolster-your-most-important-metric-345217.