KPIs and Metrics

Today, I want to talk a bit more about the differences between KPI’s and Metrics and why they are so important for online performances. Everyone who works in or for an online company or has dealt with Web Marketing previously has probably heard about these specific terms before.

However, what is a KPI and what are Metrics?

KPI is short for Key performance indicators that determine the targets, goals and measuring performance of a company (Twin, 2019).

Metrics are measures that help Web Managers to track the performance of their campaigns and channels and assist as a control mechanism. (Solomon, Marshall, and Stuart, 2017, p. 174).

The measurement and controlling process of the marketing campaigns is one of the most important processes that enable Web Managers to fine-tune their actions before it is too late, and the campaign fails (Solomon, Marshall, and Stuart, 2017, p. 174).

Mortensen (2008): https://www.slideshare.net/dennis.mortensen/the-difference-between-a-kpi-and-a-metric

According to Dennis Mortensen (2008), every KPI is automatically a Metric but not every Metric is necessarily a KPI. Nevertheless, KPIs are necessary for every online performance, if a company doesn’t use KPI and thus metrics, it won’t be able to perform its maximum.

One of the most used metrics is the ‘click-through rate’, this metric “indicates the percentage of users (…) who have decided to click on the advertisement to visit the website or web page associated with it” (Solomon, Marshall, and Stuart, 2017, p. 175).

But how reliable are these Metrics and KPIs, is it enough to just look at one at a time?

Well, no! If you really want to have an outcome of your KPIs and Metrics, you need to look at several KPIs at the same time and draw conclusions of it.

I mean, if you think about the ‘click-through rate’ it might tell you how many users actually clicked on your advertisement you might have paid for.

But what’s next? Did they only click on it and left your website straight away? Did they also look at your products or the services you offer? Did they purchase something?

You don’t know right? That’s the thing!

The ‘click-through rate’ won’t give you this information, therefore you need more specific KPIs to answer the questions above.

So, in my opinion, KPIs and Metrics are very important for companies to look at, but everyone needs to bear in mind that several KPIs are needed to draw a helpful conclusion out of it. Focusing on just one KPI won't help and could even be misleading.

Stay tuned!

Reference list:

Solomon, M., Marshall and G., Stuart, W. (2017) Marketing: Real People, Real Choices, Global edn. London: Pearson Education. Dawsonera [online]. Available at: https://www.dawsonera.com/abstract/9781292221106 (accessed: 03.10.2019)

Mortensen, D. (2008) ‘The difference between a KPIS and a Metric’, Slideshare. Available at: https://www.slideshare.net/dennis.mortensen/the-difference-between-a-kpi-and-a-metric (accessed: 03.10.2019)

Twin, A. (2019) ‘Key Performance Indicators’, Investopia. Available at: https://www.investopedia.com/terms/k/kpi.asp (accessed: 04.10.2019)