Key Performance Indicators are the most important metric for your online Business. It shows how well you are doing against your Business Objectives. The type of Business defines your objective.
If you are in a B2C Business then selling your product is one of the key Business objectives.
If you are in a B2B Business then downloading case study, downloading whitepapers, subscribing to your newsletter, signing up for a webinar and signing up for a free demonstration that will eventually lead to sales are some of the Business objectives.
If you are a content site then then interaction with advertisers’ Ads and content would be one of the key Business objectives.
Key Performance Indicators would help Businesses measure how close they are in reaching their Business objectives. For example:
B2C (Business to Consumer)
For an e-commerce site (B2C) the key performance indicators would be:
Conversion rate: The rate of sales to visits is a key metric in e-commerce sites.
If for every 1000 visits 10 visitors buy a product then the conversion rate is (10/1000)x 100 = 1%
To measure where the conversion is getting affected, other metrics like shopping cart abandonment rate can also be used.
Average Order Value: This metric is the ratio of total revenue by total orders
If on Mondays an e-commerce site earns $50000 with 100 orders, then the average order value is $50000/100 = $500
Revenue per Visitor: Another important metric for e-commerce sites is the revenue per visitor.
If for every 100 visitors you are earning $500 then revenue per visitor would be $500/100 = $5
B2B (Business to Business)
For a B2B Business lead generation is an important activity. Metrics that would help Businesses measure this activity are crucial. The key performance indicators for B2B Business would be:
Subscription (Sign-Up) Rate: This metric is the rate of subscribers (Sign-Up) to visits
If for every 100 visits 4 subscribes to your newsletter/ sign-ups to your webinar or product demonstration then the subscription(sign-up) rate is (4/100)x100 = 4%
Effective Subscription (Sign-Up) Rate: This metric is the ratio of active subscribers to total subscribers. This rate is an important metric as only active subscribers would eventually buy. Cleaning your lead database by validating the leads and evaluating whether the leads find your services relevant for their Business is crucial. Some leads might no longer be associated with the organization. For such cases, cleaning up invalid e-mail addresses (e-mails that have bounced) is crucial.
If for 100 subscribers, only 40 are active then the Effective Subscription Rate is 40%. An active subscriber opens your communication on a regular basis. If you are confused with what “regular” means then don’t worry. Mailing clients like Mail Chimp has a feature to rate the subscriber. Any subscriber having 4/5 rating is an active subscriber.
Effective Purchase Rate: Even for B2B Business the eventual goal is sales. Out of the active subscribers how many have purchased your product/service over the past 1 year. This means that after 1 year of regular communication, how many subscribers bought your service? For B2B Business, a one year time horizon is a standard time frame to measure the purchase rate. But remember, different Businesses have different buying cycles. You have to measure accordingly.
For 100 active subscribers you have communicated over the past 1 year, if 3 subscribers purchased your service, then the effective purchase rate is 3%
In content sites, the interaction of the visitor with advertiser’s assets is a key performance indicator. The assets can include content or ads.
Click through Rate: For Banner Ads, the rate of clicks to visits on your advertiser’s ads is a metric that would help you measure the success of the ad campaign.
Video Views: Video has become an integral part of content. The brand reach can be measured with the number of times your advertiser’s video has been viewed. The number of full video view is another metric that help you find the effective number of video views.
Time Spent on Page: The time spent on your advertiser’s news release or sponsored content is an indication of your ability to bring a qualified lead to the advertiser’s message. Depending on the length of the article, anything above 3 minutes is an indication that your advertiser’s message has been well received.
Scroll Rate: Another metric that adds validity to the time spent on the page is the scroll rate. Scroll rate measures how far the visitors have scrolled the advertiser’s pages. A scroll rate above 85 %( we expect a 15% footer in websites) is a measure of how effective the content was in engaging the visitor to the very end of the article.
If the one of the Business objectives of the content site is to capture leads then subscription rate are also considered as Key Performance Indicators.
Remember, Key Performance indicators for your Business will vary from the general KPIs mentioned above. It is important that you have a clear definition of what your Business Objectives are. Key Performance Indicators depends on that.
If you want expert help in translating Business Objectives to Key Performance Indicators, contact us or you can call us at: India (Ph): +91 9497189032, UK (Ph): +44 (0)20-3371-9976 or US (Ph): +1 650-491-0004
ByteFive provides comprehensive Internet Marketing Services and Training in Search Engine Optimization, Search Engine Marketing (PPC Campaign Creation, Management and Optimization), Developing processes and best practices for Internet Marketing, Managing and Analyzing Web Analytics, Landing page Optimization, E-Mail Newsletter Management, Competitor Research, Content Creation and Content Marketing.
The first step in Internet Marketing is getting visitors to your website, Facebook, Twitter or LinkedIn page. While it takes discipline and concentrated link building, keyword research and on-page optimization to get the right audience to your landing pages, all the efforts would be wasted if you are not focused on conversion. Too often businesses focus on the wrong Key Performance Indicators – Time on page, Bounce Rate and Browse Rate. Although the three factors are crucial for your ranking in Google Search Index, businesses should not forget the purpose of their Internet marketing campaigns.
Don't believe the hype about Social Media marketing and Search Engine Optimization if it doesn't add to your bottom line. A common mistake that businesses make is to focus on actions that don’t immediately add to the revenue. A better strategy would be to focus on non-revenue and revenue generating actions, simultaneously. You can boast about ranking 2nd for crucial keywords but what is the value for your business with that result. By rigorously focusing on the revenue with each Internet Marketing milestones, you will learn to focus on the bigger picture – “Why you are on the Internet”
Businesses have four purposes with their Internet Marketing campaigns:
1) Increase Sales
2) Lead Generation
3) Build Brands
4) Earn Evangelists
Increase Sales: Your primary focus should be on making the sale. It can be one of your products/services, your partner’s products or even products hosted by companies like Amazon and other third parties. Earning sale is not easy and you have to diligently follow the process of testing, refining and evaluating your landing pages. Each and every aspect of the landing page should be tested – Button’s shape, size and colour, the title of the landing page, the meta-description, images used to represent the product, the use of whitespace, alignment of the copy with respect to the product’s image, contrast of font colours used in AD Copy, the conciseness of the copy, testimonials, reviews quoted from reliable third-party sources and the page background.
Lead Generation: Not all your visitors on their first visit would buy what you are offering. It can because of lack of information, lack of trust, insufficient budget or because they are not from your target market. Understanding why the sale didn’t happen will allow you to optimize and create variations for your landing pages. Provide your prospects with the incentive to share their primary information (Name, E-Mail and Phone Number). Nurture the relationship by providing value for their Businesses. It can be through a newsletter that provides actionable tips and strategies or through one on one conversation.
Build Brands: Building brands is not a short-term goal but a by-product of your focus on creating lasting value for your target market. Often Businesses, especially Internet Businesses focus on the wrong thing. The number of likes, followers and fans are good indicators of your brand reach but they are not the only reasons why you should be using the tools. Use the social media tools to communicate with your target market. Although your influence and your potential to create brands are impacted by Social Media, it is the value that you create with your services that will help you create a lasting brand. In the future, Facebook, Twitter and LinkedIn will not be the only communication channels that will allow you to engage with your potential customers.
Earn Evangelists: The last but often a key proponent of building brands is the process of earning evangelist. They are the most valuable assets for your brand. You cannot directly quantify the impact that your brand evangelists will have for your bottom line, but you should be aware that visitors to your site can be one. Even if they didn’t buy your products/services or share their primary information with you, they might help you spread the word about your brand through blogs, social media or through review sites.
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Blogs, Internet Marketing
•on December 29th, 2011
1. Death of Content Farms
On 24th Feb 2011, Google made a seemingly low change that affects only 12% of all queries, the Panda Update, primarily targeted to weed out low quality content farms and e-zine sites. The algorithm is not perfect but has been effective in removing low quality e-zine and e-how type articles from the top 10 search results. Google’s primary purpose with weeding out low quality articles is to encourage advertisers to spend more money online in portals managed by expert contributors and reputed editors.
2. Rise of Google Plus
On July 7th 2011, Google invited select bloggers and users to take a trial run in Google Plus. The concept although not new was a step to reduce the noise to signal ratio in social media content sharing. We suspect that the panda update was to weed out all e-zine type articles and show Google Plus articles in search results in the long run(as a separate section, like how twitter updates were used to be shown) or under general search results for profitable keywords. Of course, it would take more incentives for marketers and SEOs to share their articles and build an audience for Google Plus.
3. Author Rel Tags
In July 2011, Google started showing Google+ Profile Photos as Rich Snippet in Search results. This was because Google introduced two rel tags (rel=author and rel=publisher) to handle content scrappers, use author reputation to rank web pages and to get more visitors to Google Plus profile pages. We have to wait and see how widespread the adoption of G+ profiles would be and what the differentiating factors would be once majority of webmasters starts to adopt these tags.
4. The +1 Button
From July 2011, the +1 Button has been another feature that has been widely adopted by publishers and bloggers. Google has hinted that the +1 button improves ranking for web pages. It also improves click through rates in search results. Google Advertisers can also opt for +1 button in their Ads, providing another opportunity for them to differentiate from the competition.
5. Schema – Search Engines Unites
On 2nd June 2011, Google, Microsoft, and Yahoo united to announce a common framework to support micro data – schema.org. This would enable search engines to create semantic web, where the search results would have much more information than regular Title, Description, Link and Preview. Depending on the query, users will have additional information on what the web page would be about. For example, you might have already noticed “Star Ratings” visible in search results, when you search for product/restaurant reviews. The major search engines will accept a format that will allow webmasters to provide additional information about their web pages. This would not only allow additional formatting of search results but will give search engines an extra context on the information in their index. 2012 will be the year when most of the Businesses will adopt micro data in their web pages.
6. Hiding Keyword Data
On Oct 19, 2011 Google announced a shocker. To protect user privacy, Google has enabled SSL URL in all default searches, hiding “keywords” from visits originating from logged in Google users. This move has been seen as a step to force webmasters to increase the spend in Google Adwords, where you can access the keyword used by logged in users. Although it improves the revenue for Google, SEOs will have a harder time providing a greater user experience and better product targeting with this move. Some Businesses has seen 20-30% of their search traffic being unaccounted for, a frustrating experience if 60-70% of visitors to your website is comprised of search traffic.
7. Conversation Rate Optimization Matters
The focus from increasing traffic to improving conversion began in 2010 and has picked momentum in 2011. A number of conversion rate optimization tools have sprung in the market. We failed to understand how Google Website Optimizer has yet to include a WYSIWYG editor and an effective plugin for WordPress, Drupal and Joomla. Maybe Google is missing a chance to dominate this market. We believe that online Businesses will embrace third party website optimization tools in 2012 and tools like Visual Website Optimizer (very easy to use but the editor needs some easy to access functions like undo, redo and keyword shortcuts) and optimizely (very easy to use but has some major bugs that need fixing. The code doesn’t work with some CMS)
8. Ad Re-targeting
There has been widespread criticism on data used by Facebook and Google to identify user. In our opinion, it is better to show ads that are relevant to us than showing ads that are inappropriate and no way related to our preferences. If you have noticed products (that you had earlier shown interest) following you around in various Banners Ads, it is the new re-targeting feature available in Google Adwords that is responsible for the new phenomenon. Although this feature has been introduced in 2010, the widespread adoption began in July 2011. Re-targeting will allow advertisers to target users based on their previous interaction with your website.
9. LinkedIn – Most Valuable Social Network
We believe LinkedIn is still the best tool to get partners and sponsors. Businesses that cater to B2B market should focus their marketing efforts in LinkedIn. Twitter continues to be the best tool for one on one communication with users and customers, especially for B2C market. Users spend a considerable time logged in to Facebook. The open graph data is useful to get user preference and show ads according to customer’s preference. Also, Facebook users are highly engaged and are more likely to perform action (share information or buy products).
10. Rise of Tablet Users
Although the increase in use of mobile phone to access internet has been on the rise, 2011 saw the rapid adoption of tablet devices. This has introduced a new set of users to websites, a much more engaged users than mobile users. Tablet users spend 43% more time reading articles online. Technology, Applications, themes, Content and Products are being customized for this section of users. 77% of tablet users read in-depth stories and news releases. Although apps are on the rise, 44% of the tablet users still use web browsers to access pages.