Key Performance Indicators

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Definition, purpose, and considerations relating to key performance indicators from an online perspective.

Definition, purpose, and considerations relating to key performance indicators from an online perspective.

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  • 1. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Key PerformanceIndicatorsDefinition, Purpose, & Considerations
  • 2. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627What are Key Performance Indicators(KPIs)?KPIs are a set of calculated values used to measure success. The datagathered from those measurements helps give managers insight intobusiness performance and progress.
  • 3. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627What’s the benefit to a business?• KPIs offer an objective view ofbusiness performance formanagers to review (instead ofrelying on subjective reports orperceptions of success).• Measure success of programs• Quickly link financial investment withstrategy• Conduct performance reviews• Monitor effects of operationalworkflow adjustments• Translate business goals into visible &actionable metricsDailyOperationsManagementStrategicPlanningBusiness Goal Business GoalExecutives,owners, boardmembersManagersExternalOperations(customerservice, sales)InternalOperations(manufacturing,supply-chain)CompanyOperations(accounting, HR)
  • 4. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627How are they obtained/triggered?• Relevant KPIs can be discoveredby observing any occurrencewhere an action between aresponsible party and adependency intersects with acompany’s strategic goalGoalDependencyResponsibleParty
  • 5. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Example• Company Goal: Measurefrequency of orders in excess of$700 in Orange County eachmonth• Responsible Party: Sales rep• Dependency: Customer• Action: Sales rep makes a salethat totals $833 to a customerlocated in Costa Mesa.Company MetricOrder >$700 inOrange CountyCustomerSales RepDateofsaleKPI
  • 6. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Considerations for developing KPIsData CapitalWhat data is required tomake measurements?Does the data and datastructure exist in a way thatsupports measurement?How will new data beacquired and documented?Technology CapitalWhat applications and toolsare in place (CRM, CMS, BITools, etc…)Is the current technologysufficient to store andmanipulate data?Is new development requiredto enable measurement orprogress? If so, does the ROImake sense?Intellectual CapitalHow can the skills of businessemployees affect theoutcome of the results?Should the actions ofcustomers or third parties beconsidered?How much additional time, ifany, should be spentdeveloping new processes,training, reporting, etc…?Defined Business Goal
  • 7. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Considerations for developing KPIsDefined Business GoalWhat’s measured? How is it measured? Who’s responsible?
  • 8. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627KPI Analysis in the Business ProcessDefine BusinessGoalStrategy Planning& KPI SelectionStrategyImplementationMeasurement,Evaluation, andStrategyAdjustment
  • 9. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Best practice for defining relevant KPIs• Suitable for the business• Allows for chronological comparison (measure of progress over time)• Must have responsible party• S.M.A.R.T.• Specific• Measureable• Attainable• Relevant• Time-bound
  • 10. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Three steps to measureOnce a relevant goal and KPI have been selected,1. Develop a baseline2. Record statistically adequate amount of relevant data3. Compare results with baseline
  • 11. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Common KPIs for eCommerce• Weekly, monthly, quarterly,annual sales• Conversion rate• Shopping cart abandonmentrate• New vs. returning customers• Number and average rating ofproduct reviews• Product affinity (what’spurchased together)• Average margin• Average order value• Customer acquisition cost
  • 12. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Common KPIs for Web Marketing• Site traffic• Unique vs. returning visitors• Time spent on site• Page views per visit• Traffic source• Geographic location• Bounce rates• Newsletter subscribers• Social metrics• New followers, fans, shares, likes• Paid search traffic volume• Caller source & volume (paid vs.organic)
  • 13. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Common KPIs for LeadGen Sites• ROI• (Attributable Revenue – CampaignInvestment) / (Campaign Investment)• % Revenue from SEM• Revenue from SEM campaigns /overall revenue• Email engagement score• # of new leads / # of emails• Social interactions• # of social interactions / period oftime• Traffic source volume• # of visitors for each source• Cost per lead• Total cost of campaign / # of leadsgenerated• Conversion ratio• # of leads per channel / # of wins• Actions / Goals• # of users that perform a desiredactivity when landing on the site (perchannel) / # of users who land on thesite (per channel)
  • 14. Matthew Hardesty | GoldenComm | 474 E. 17th St, Suite 103, Costa Mesa, CA 92627Questions?