‍What are KPIs and why are they so important?

‍

KPI translates to Key Performance Indicators.

‍

We all know that digital solutions are absolutely essential in today's world. To be able to manage and scale these solutions we need to track our data so we can act on it later. Having reliable KPIs and understanding them often gives us the advantage we need to crush our competition. 

‍

We live in an information age and KPIs are the representation of this information. Without KPIs you have no strategy, and eventually no future, as you are just drifting around trying to find out what is wrong, where to pivot and how to budget ad spending.

‍

Website traffic and performance

‍

On the website, you can track thousands of values and mostly it is individual. I'll try my best to not go into much detail and to give you an overall overview of what you should be looking and assessing.

‍

My advice is always not to follow everyone else. Think about your business. What does really matter to your success?

‍

For example if you are selling a product that customers usually buy a few times a year, a User Retention KPI is not as important for you as it is to a news reporter whose goal is to attract users daily to generate ad profit. 

‍

Here are a few broad KPIs everyone should look at:

‍

• Average Session Duration: Time spent on site indicates engagement and in terms of SEO, Google takes it very seriously as well, so you should too. :)
• Conversion Rate: How many visitors take action? Did they sign up, buy, fill out contact information? This is likely the most important metric.
• Bounce Rate: Are people leaving without engaging with your content? A high bounce rate may signal poor UX or irrelevant and invaluable content. To learn more visit here.
• Traffic Sources: Understand where your traffic is coming from. Organic search, paid ads, social media…

‍

To understand how this applies to SEO visit our blog What is SEO.

‍

Digital Marketing and Campaigns

‍

In digital marketing, KPIs are absolutely essential. To be honest, doing any kind of digital marketing without understanding at least the key KPIs is pure guessing. 

‍

As with websites, again, there are hundreds of metrics we can look at, which can be very individual, but let's look at the few key KPIs everyone should know:

‍

• Click-Through Rate (CTR): How many people clicked through from the amount that had the option. Looks at the effectiveness of your ads, emails, and CTAs. It is measured in percentage.
• Cost Per Click (CPC) & Cost Per Lead (CPL): How much did it cost you to get a “click through” or to get your lead. Are you getting good value from your ad spend? 
• Email Open & Engagement Rates: Emails are far from dead. Track email metrics and compare them to your website. You will find out that they can generate high quality traffic.
• Social Engagement: Track likes, shares, comments, but prioritize metrics tied to traffic and conversions.

‍

Learn which KPIs help you to generate sales and improve your business.

‍

Ecommerce metrics (if necessary)

‍

Ecommerce can be tough. If you have a great product, these KPIs are a great way to track your performance and improve.

‍

• Customer Acquisition Cost (CAC): How much are you spending to acquire a new customer? Overlap this metric with your traffic sources and find out which one needs improvement.
• Customer Lifetime Value (CLTV): Predict future revenue per customer. Important metric to understand in order to distribute your budget correctly into customer satisfaction. To understand the calculation visit here.
• Cart Abandonment Rate: Identify friction points in the buying process. Some businesses can even reach 80% CAR, which makes you realize how important it is to be able to learn how to convert your customer even at the checkout with some upsell.
• Average Order Value (AOV): Encouraging upsells and bundles can increase this metric. To understand the calcultation visit here.

‍

Customer retention and experience

‍

I think we can all agree that in 2025 loyalty beats reach in most industries. That is also why we can see such a boom of personal brands on social media. 

‍

Obviously we know that we have to take care of our customers and make them feel like “at home”, but it is important to understand these KPIs to have data to track our performance at doing so: 

‍

• Net Promoter Score (NPS): Measures customer loyalty and satisfaction. To understand further visit here.
• Customer Satisfaction Score (CSAT): Based on short post-interaction surveys usually after checkout or through email after x time. 
• Churn Rate: The percentage of customers who stop doing business with you—especially critical in SaaS or subscription models. Try to find out why… To learn more visit here.
• Resolution Time: The faster you solve issues, the happier your customers. Make sure your support works effectively. Does it need chatbots or even video calls? Do your best to not break your customers' loyalty.

‍

Product health

‍

To be successful in the long-term view your product has to be amazing and working smoothly.

‍

Make sure these KPIs are taken care of:

‍

• Daily Active Users (DAU) / Monthly Active Users (MAU): Engagement over time. 
• Feature Adoption Rate: Are users actually using what you’ve built? 
• System Uptime / Downtime: Downtime means that your product is not available, which costs you both revenue and trust. 
• Error Logs & Crash Reports: Stay on top of bugs before users find them and compensate them if they are reported.

‍

How to choose KPIs?

‍

As I said multiple times, KPIs are very individual, but these principles apply to all:

‍

• Align with business goals: Your KPIs should reflect growth, efficiency, and customer satisfaction. 
• Avoid “ego” metrics: 100K followers mean nothing if the engagement on your posts is dead. 
• Benchmark, analyze and keep everything up-to-date: Set goals and reevaluate quarterly to keep metrics aligned with strategy.

‍

Making sure you understand some of the “numbers” is really important to ensure success in the digital world. I hope this short blog helped you understand the key KPIs and improve your business.

‍

Thank you for reading,

Damian from Visio.

‍