KPI or Key Performance Indicator metrics translate complex measures into simple indicators, which allow decision makers to quickly and efficiently assess the situation and give a response. In order for them to run smoothly in your business, you need to keep one uniquely key point in mind: all KPIs need to be actionable. Which means they should report on the metrics that are important to your organization. While the decision maker may have the final say in deciding which KPIs to select (and which to reject), all department heads should be involved in suggesting strategic indicators that would work best for their department.

To understand what type of KPI would work best for you, you must first define the site you have. Keep in mind that if your business has a website that serves multiple functions, it may be more difficult to identify the site’s measures of success. Similarly, if your business has more than one website, each website must be treated as an individual entity. It’s also important to remember that KPI metrics should cover a broad spectrum of both financial and non-financial goals.

The following are some of the most popular types of commercial websites we come across today:

Commercial sites

In this type of environment, the goal is to get customers to buy goods and services directly online. An example would be amazon.com or expedia.com.

The KPIs for this site are fairly simple to identify as they match the ultimate goal of the site – to earn revenue. They should include the following:

• Conversion measures – While there are several ways to measure conversion rates, the most common is the order conversion rate, which is the ratio of visitors to orders, and paid conversion rates, which is the proportion of visitors who start the order payment process.
• Average order value – This is the ratio of site revenue to orders and has a direct impact on the sites’ profit margin, so it is an important metric to consider.
• Customer loyalty – The proportion of new clients with respect to the oldest ones. Use this to keep track of how many new customers you attract and how many loyal customers keep coming back.
• Search engine referrals – Search engines like Google, Yahoo and Bing will send customers to your site. Do you know how many come from there and which search engines send the most visitors?

Content sites

Content sites generally rely on online advertising to generate income. Alternatively, they can be built to promote a business offline. Either way, your purpose is to attract the widest possible audience and keep them coming back. News sites like Cnn.com and ABCNews.com and sites like WebMd.com are examples of content sites.

The goal of the site is generally to attract more visitors, thus increasing the site’s advertising revenue. If this is the case, the KPIs should include:

• Unique visitors and recurring visitors – This will give you a quantifiable idea of ​​how many visitors your site attracts, as well as measure the effectiveness of attracting returning visitors. It forms a large part of your customer loyalty strategy.
• Percentage of new visitors – The ratio of new visitors to returning visitors and how you focus your energy can largely depend on who your site is targeting.
• Visit depth – The proportion of visits to a page. If your visitors appreciate your content, they spend time on your page, and in the long run it increases your advertising revenue.
• Duration of visit – How long a visitor stays on the site will also determine how your brand is perceived and, in turn, marketed. The longer the stay, the more people talk about the effectiveness of your brand.

Lead Generation Sites

Sales sites typically fall into this category. The idea is to get visitors to submit as much information (not too much, as that would put them off in the first place), so that sales reps can follow up with them.

The KPIs here may overlap with those described for an ecommerce site, however there are other indicators. These include:

• Sales conversion rates – It refers to the number of leads that are converted into sales and also takes into account the sales campaigns that can be carried out. How is the conversion rate different now? Another indicator could be the calls made by sales reps each day. How do you turn that into leads? Is it worth the salary paid?
• Cost per lead – What is the cost of marketing and advertising that your company has incurred and how does it compare to the sales generated?
• One-time access fee – Do your visitors go from the entry page to the purchase page? If not, this could be another important indicator that your front page needs to be more robust.

Site support

The purpose of the support site is to provide answers to its users. Forums work in a similar way, and a good example is the Sears Community Page. The site can also be the online customer service presence for a business or service. Some of the KPIs for such a site include:

• Customer satisfaction metrics – This is information collected through online surveys and response forms. Is the customer satisfied with your products and services? Would you continue to use them? Recommend them?
• Time spent on the site – This is, of course, a great indicator of how much the customer enjoys your site, uses it, and returns to it. The goal is to make it as fast and easy to use as possible.
• Returns and complaints – Does the site receive a lot of complaints, negative feedback and comments, a request to return products? By measuring them, you will have a good idea of ​​how your customers feel about your products and services.

While there are many free and paid tools available, take some time to see how you can better identify, implement, and track KPIs for your own business.

© 2011 Usha Krishnan Sliva