By Zieliński Jerzy

Key performance indicators – what is a KPI?

KPI just stands for Key Performance Indicator, or KPI. This is an important concept, because sales KPIs allow you to measure the effectiveness of achieving the adopted marketing goals. Read the article and learn more.

Key performance indicators – what is a KPI?

Reporting and analyzing KPIs is important for any business, as it not only informs about the effectiveness of the campaign, but most importantly allows to eliminate those activities that do not bring satisfactory results. You save budget, time and only target stocks that make money for you. Below you will read about which KPIs matter most in marketing.

  • Rejection rate – Bounce Rate

You can find it in Google Analytics. It allows you to find out how many users leave your website after visiting just one subpage. A high Bounce Rate should spur analysis and action – does the site meet the needs of users, is the content interesting and comprehensive, the content consistent with the key phrases on it? Perfecting these issues will help increase conversions.

  • Conversion rate

These are the basic indicators of e-commerce. A conversion is nothing more than a customer completing an action we expect – making a purchase, signing up for a newsletter, making a phone call. How do you calculate this KPI? Divide the number of people who converted by the number of visitors to your website. Low KPIs mean that something is wrong with the site or the offer, and it is worthwhile to make a
conversion optimization

  • Website traffic

This is a basic KPI to consider in online marketing. The more people you get to your website, the greater the chance of conversion. In addition to the sheer number of visitors, also analyze the time spent on the site, the number of pages viewed, the number of returning users. You can measure site traffic using Google Analytics, which makes it much easier to check KPIs. Examples of KPIs that can be approached in GA also include conversion rate and attribution models, i.e. the relationship between user activity in different channels and sales.

  • Cost of acquiring a lead

In its context, the cost of acquiring a lead is crucial. Calculate the cost of acquiring a lead separately for each source within which you operate. How do you calculate this KPI? Divide the total campaign spending by the number of leads acquired.

  • KPIs in Google Ads

Key performance indicators are examples of the most important parameters of Google Ads. A Google Ads campaign consists of several elements, which are worth monitoring and optimizing to make it as profitable as possible. The basis for this is the conversion rate, but in addition to it, you can’t ignore the quality score, expressed as a number from 1 to 10, measured at the keyword level. With a higher quality score, the ad will be displayed in a higher position, and at a lower cost per click.

  • ROI

This is another very important sales KPI in marketing. ROI, or Return on Investment, is the return on investment. By monitoring ROI, you will gain information about which activities and campaigns are worth investing more in. You will determine it using the formula:

ROI = (revenue – expenses) / costs) x 100%

  • ROAS

Unlike ROI, you take into account in it not net profit, but revenue. So you learn about the level of profitability of the campaign. You can monitor it with GA from within your Google Ads campaign. Do you want to manually calculate ROAS? You can find the pattern below:

ROAS = (revenue / costs) x 100%

The ROAS formula is one of the easiest ways to test the effectiveness of marketing efforts.

Sales indicators – it’s worth using them

The examples of KPIs presented show that the effectiveness of marketing activities can be measured in many ways. Their number should also convince you that it is really worth monitoring the effects of the campaign. Need help fine-tuning your ads? Are their results not satisfying you? Get my help – together we will work out a higher return on your investments.

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