In the 4th episode of 6 series conversations between Tom Cole (President & CEO of RDA) and I, we discuss how to define KPIs, which KPIs should you be measuring, and what’s the role of technology in all of this.
Here are the links to the first 3 blogs of this series:
RDA, President and CEO
In this episode, we have particularly focussed on how to define KPIs. Later in the episode, we also talk about the role of technology and how to use it at different levels in your business.
Be it launching a new capability – service or product, a new process, or anything else, companies try to use it to evolve & grow further. But measuring goals attached to every new launch becomes as challenging as it can be. This is where KPIs and the importance of picking the right KPIs come into the picture.
How to Pick The Right KPIs?
Goals beget Objectives, and Objectives trickle through the organization.
Every business has a goal in their minds when they launch something new. But breaking down these goals into marketing objectives and further into digital KPIs will make the entire process more measurable.
Let’s say, you launch a new product and your initial objective is to increase the market share for that product. You can keep your marketing objective to be things like customer repurchase, increase e-commerce sales, generate new customer sales, etc.
The next step is to define KPIs and make these objectives truly measurable. For instance, some of the digital KPIs to measure the marketing objectives you have defined above could be – subscription sign-ups, sales volume, new customer sign-ups, product sales, etc.
So, for the above product launch, the graph would look something like this – where KPIs basically help you measure whether or not your organization is reaching towards a defined target or a strategic objective.
A Goal -> Strategic Objectives -> Marketing Objectives -> Digital KPIs
Having said that, measuring the wrong KPIs can prove to be a big disaster for your organization which basically means wasted resources and failed objectives. So, what are the KPIs you should measure?
What KPIs Matter?
In today’s digital world, customers do what customers want to do!
With the power of the internet by their side, customers in 2020 do their research and make well-informed purchasing decisions.
Here are a few ways to find out the KPIs that matter.
- At the end of the day, the primary purpose of every new launch – be it of a capability, a process, or anything else, is to drive business growth & revenue. So, it is essential to define customer-centric KPIs – to map the strategic objectives of your business to what your customers really need.
- You should be able to relate every KPI you define to a tangible business ROI.
- The right KPIs for any strategic objective should be able to help you measure its effectiveness across different profiles – demographics, customer personas, etc.
Examples of Marketing Objectives & Their Sample KPIs
In our conversation, Tom shared a few examples of Sample KPIs – Associations.
- Let’s say that your marketing objective is to increase events, programs, etc. For this objective, the right KPIs to measure would be – Events Page View, the number of events registrations, program registrations, etc.
Another example of a marketing objective could be – increasing the customer lifetime value of your business. The right KPIs to measure for this objective would be – average web/mobile app sessions time, bounce rates, CTR, etc. Performance Marketing is a Marathon and not a Sprint!
The Role Of Technology – Integrating Pieces
KPIs measure the performance of individual segments of the entire process to tell you how that particular segment is doing.
Now that we know what KPIs matter and how to define them for the strategic objectives of your business, the next step is to put them all together to get a final picture of where you are headed. This is where the use of technology comes into the picture!
When you put everything together, the end objective of anything you do is to launch a successful capability, use the learnings to launch a more efficient & effective process or a capability, and thus, to help your business grow.
While technology can help you integrate individual KPI segments and paint a definitive picture of where your business is headed, it is not advisable to get hung up on technologies alone. After all, technology is an enabler, not your core business.
Don’t get hung up on technologies, focus on your capabilities – the ones you have and the ones you want to have!
To simplify the entire process of understanding technologies used in business, Gartner categorized the plethora of technologies available out there into three primary categories:
System of Record – This type contains technologies that help you function, such as ERP systems, payment processing systems, etc.
System of Differentiation – Now, this category is what differentiates you from other businesses (your competitors). You can choose 4 or 5 as per your business capabilities, such as eCommerce Engine, catalog management, web analytics, reporting & BI, etc.
System of Innovation: In this category, you experiment with different technologies to find out what works best for your business, such as mobile e-commerce app, social commerce, etc.
The ultimate goal of using all these technologies should be to create a system that brings together data and help you understand your customers in a better way – what works for them and what doesn’t.
Let’s say that you have multiple ways of obtaining new customers – outreach, cold emailing, etc. You have defined KPIs for these methods but the end marketing objective is the same – attain new customers.
So, the end goal of using technologies should be – to integrate these systems & measure the collective impact and use the collected data to take dynamic actions with better ROI.
The idea of defining marketing objectives, KPIs, integrating them, and everything around them is to communicate throughout your organization what’s working, what needs to be changed, and align your marketing goals with your company goals.
We will be coming up with 2 more sessions in this series. Stay tuned!