Why your KPIs mean absolutely nothing
Key Performance Indicators, also known as KPI’s are almost always meaningless. Not the fact that they exist, but because the ones chosen by businesses are often internally focused and do not link to an objective.
Let’s look at an example
If we take email marketing, history tells you to send your email to as many people as you are legally allowed to. So you either have your own database, use a third party, or both. Blast that message out and boom, we have sent an email to 20k people, we got an average open rate (OR) and an ok click through rate (CTR).
Hmmmmm, who are those 20k people? Are they important to your business? After clicking through to somewhere, did they complete the conversion item? Did they attempt to, but actually at that point, they were stopped because they don’t qualify?
Do you care about any of the above questions? Maybe, but you probably don’t have enough time to do anything about it because the high pressure business you work for see a fantastic reach of 20k and that you are hitting industry benchmarks in the basic email measures. Phew, pressures off because you have nailed ‘digital marketing’ and you have plenty of other deliverables to get on with.
What the email recipient is thinking
Following the above example through, let’s say 75% of that list had no relevance to what was sent to them and this was the second or third email they’ve received that falls into this category. They’re probably thinking that this company offers nothing for them and if they can muster up the effort, they will either unsubscribe or just tag the sender as junk.
What’s the lesson?
A key point at the heart of KPI setting is defining your objectives – the two go hand in hand.
Whilst we use OR and CTR as benchmark measures for the email channel, each email may have different measures depending on its purpose (e.g. for an information email we would look at OR and for an action based email we would look at the number of those actions taken – i.e. clicking through and completing a website transaction. Ultimately what we want to understand is does the user who engaged with the email do what we wanted them to.