KPIs (key performance indicators) are the few numbers you use to judge whether your marketing is doing its job for the business. The most important word here is ‘key’. Out of all the data in your dashboard, KPIs are only the figures that show whether you’re reaching your goal: sales, the number of enquiries, the cost of acquiring a customer.
KPIs vs vanity metrics
Likes, reach and follower counts look nice in a report, but they rarely answer the question: is this paying off? These are known as vanity metrics. That doesn’t make them worthless: in social media management, engagement can be a sensible KPI while you’re building the brand. The trouble starts when reach is the only metric and the business expects sales. A KPI has to fit the goal: a sales campaign needs one kind (ROAS, CPA), brand awareness another (reach within your target audience, brand recall).
How many KPIs should you track?
In our client reports we stick to one rule: 2-4 KPIs per goal, with everything else treated as diagnostic metrics. With fifteen metrics on the table, nobody knows what to look at, and any decision can be justified with some number or other. A simple test: if a metric halved and that wouldn’t change a single decision you make, it isn’t a KPI.
Related terms: conversion, CTR.
