KPIs: What is the perfect metric?

Sadly there is no one universal Key Performance Indicator. Truth be told the point we want to get across here is that there is no one perfect set of metrics you can track that will guarantee an accurate picture of business health across every company. Looking up what Amazon or Balfour Beatty consider their KPIs isn’t going to translate well to a SMB’s needs or those of a freelancer. Certainly there are some obvious choices but you should shop around blogs specific to your industry and/or scale to pick up an idea of what’s a good measure of success.

Improved target setting: the SMART method

Unlike what to track, when it comes to how you track KPIs the smart money has been betting on the SMART method for a long time now. Many people make the mistake of setting themselves indistinct, generalised goals: something along the lines of “I want to lose weight” or “I want to increase my Conversion Rate”. Admirable target. How do you know if you succeeded though? How do you know when you’ve succeeded? Are you going to aim for constant growth? Your CR goes up one month then drops the next. Have you succeeded or failed? Stats fluctuate day to day, it could be a random fluke that one month has lower CR than another. Did your actions cause it?

The SMART method was developed to cut down on some of this uncertainty and bring structure to targets.

So what does it stand for? Specific, Measurable, Attainable, Relevant and Timely.

Specific

Most folks have this one in outline at least. It’s the what, where, who and why. To return to the prior example: you want to improve your Conversion Rate (what), on your landing page (where), by hiring a CRO specialist (who), this will improve revenue from sales (why).

Measurable

How much and how will I know? “I want to improve CR by 50%” – now your goal has an obvious numeric endpoint, you succeed if you hit that.

Attainable

Essentially, “Is this goal realistic?” The average CR is around 3% but a well crafted site can happily hit 10%. “I want to improve CR to 50%” would be practically impossible but if you’re currently at 4%, boosting it to 6% is certainly doable. Similarly: do you have the time and skills to rejig your site? How about the money to have someone else sort it?

Relevant

Is this the right time to shoot for this goal? Is it worthwhile to focus resources on this? Boosting the CR of your site would seem to be a relevant goal in most cases right? What if the site isn’t ready for purpose yet? If, say, the eCommerce section you’ll rely on isn’t up and running yet then “I want to boost the CR” is a completely irrelevant metric at this point in your business’ life.

Time Bound

It may be last but it’s certainly not least – set an end date for your goals so they go out with a bang rather than a forgotten whimper. Deadlines do sharpen the mind wonderfully. “I want to improve the CR over the next 3 months”
Did you hit it? Yes? Hooray! No? Use this experience to work out what you can do better next time.

If you can identify each of these for your goals then you have created a specific target, with its own little road map, that you can hit or miss in a definitive manner. “I will hire someone to improve my landing page in an effort to raise CR from 4% to 6% over the next 3 month, thus increasing sales and business revenue”.