Like all things in business, the only way to make sure that a product is working is through a system of key performance indicators (KPIs) and analytics. KPIs and other metrics are going to help track the overall growth and effectiveness of any product making them vital to any business. But, where many companies fall short is not in designing their product, but in creating their KPIs. So, to help those of you out there establishing KPIs for your business, we have put tougher some tips and terms to put you on the right track.
What are KPIs? A KPI is an assessment tool that helps you measure the progress of a particular strategy, campaign, or initiative. At the most foundational level, a KPI measures how effective a company or organization is at accomplishing a certain goal. These indicators are essentially custom benchmarks, goals, and figures that will help you chart your strengths and weaknesses in the implementation of specific marketing strategies. So, when sitting down and establishing KPIs, it is important to ask a few questions. What goals might your business want KPIs for? What KPIs are associated with these goals? Would it be better to create a KPI for something like user experience or overall product development? As you consider the real goals behind your KPIs, it is also important to remember the value behind each customer. Are your KPIs helping you understand the lifetime value of users? Can your indicators really break down customer loyalty or forecast the possibility of future growth? All of these questions and more should be the motivation behind your KPI formation process. Don’t give in to the temptation of merely glossing over KPIs. Instead, try to analyze the impact of your indicators and what they mean for present and future strategies. KPIs are a part of an ongoing process of refining and marketing your product so that you are reaching the maximum amount of people possible.
Don’t Track Everything When measuring the success of your product, it seems natural to track all of the different aspects of it. However, this might not benefit you to analyze absolutely everything. Depending on you’re your actual product and business model, you need to decide whether goals, user lifecycle, or other similar factors are going to be the KPIs that you put stock into. This of course will take some decision making, but choosing the right KPIs is going to make a difference in the long run.
Understand How KPIs and Metrics Are Different Finally, it is crucial to understand the separation between KPIs and metrics. At their core, all metrics are KPIs, but not all KPIs are necessarily metrics. A metric is going to work to measure the overall health and success of your product (things like time, profit, costs, etc.) while a KPI is more strictly aligned to your business goals. Making this distinction will make your goals clearer and the analysis of your products more straightforward. They may not always be the first thing considered when measuring app success, but establishing KPIs is going to make any attempt at analytics simple and understandable. With any and all projects, make sure that you are starting off with a strong KPI foundation to better track your success. At JAS, we work with all kinds of businesses to develop the goals and strategies to help them succeed. For more on marketing and business tips, make sure to check out the other posts on our blog!