Key performance indicators (KPIs) help us cut through the noise and get right to what matters most to our businesses. However, there are many factors to consider before elevating a metric into the almighty KPI slot. And, even after you’ve decided which KPIs will guide your strategic decisions, there are supporting metrics that can help ensure your business is on track to meet your KPI targets.

Not all metrics are KPIs

Although both KPIs and metrics are used to measure some aspect of performance, and KPIs fall within the greater definition of a metric, the distinction is important because KPIs are more significant to the overall success of your campaigns. At SMX Virtual in December, Tanu Javeri, global digital analytics enablement lead at IBM, defined metrics and KPIs as follows:

• Metric: A quantifiable measure that is used to track and assess the status of a specific process. In other words, a measurement you record to track some aspect of your business activity.
• KPI: This is also a measurement, but it’s related to a specific strategic business goal and reflects how successful your business is at achieving that goal.

“Metrics reflect how successfully an activity is completed to support the KPI,” Javeri said, “Simply put, KPIs are strategic, while metrics are tactical.”

Determining the right KPI for you

Understand what stage of growth your business is in. Knowing which stage of maturity your business is at and its current goals are key to determining your KPIs (there may be more than one).

Ask yourself: Are you working towards building greater awareness or capturing more conversions? Is your business sensitive to external factors such as market demand or seasonality? If you’re a startup looking to crowdsource funding for a new consumer product, your return on ad spend to get in front of potential backers is probably more important than time spent on-page.

Ask yourself the mandatory questions. Many metrics may seem equally important to your goals, but your KPI must cut through the noise. To help single out that KPI, ask yourself the following:

1. What is a measurable activity that can get you closer to your goals?
2. How can you measure how effective you are at that activity?
3. What numbers signify recent or long-term business performance?

It’s important to delineate between short and long term goals — think about how frequently you need to evaluate performance or make changes, as this interval will depend on the nature of your business and the sector it operates in. For example, monthly recurring revenue is probably more important to a company like BarkBox than it is for, say, Spirit Halloween.

Narrowing down your list. Shifting priorities in one direction means that focus may be taken away from other areas, so consider how these new goals may affect your operations before formalizing your KPIs. For example, making your organic search rankings your main KPI may downplay the importance of your social channels, which can result in siloing your social teams.

As you narrow down your list of potential KPIs, remember that the ones you ultimately commit to should be significant, contribute to an overall objective, and thus, translate to business benefits. And, from an organizational standpoint, having an easily understood set of KPIs can help you align goals across teams.

Bolstering your KPIs

A metric for each part of the user journey. “Breaking down the user journey, phase by phase, aligning each step with a goal, and restructuring your touch points accordingly are essential steps towards maximizing customer success,” Javeri said. This process can also help you monitor your various marketing channels and better appreciate how those channels affect your KPIs.

This process also helps you correct course by identifying extraneous steps or bottlenecks that your customers may be encountering. Once these issues are identified, you can take steps to remedy them by streamlining your journey or providing content or services that helps them along.

Take, for example, a services page for a food delivery platform that gets a lot of visitors but has a high bounce rate; safety might be a top priority for your customers, so adding details about contactless delivery and the personal protective equipment your employees use might have a positive impact.