Get Cozy with Your Company’s Key Performance Indicators (KPIs)
How often does your team talk about key performance indicators (KPIs)?
Hopefully, it’s often. At 9 Clouds, we throw around the term all the time because our KPIs are the heartbeat of everything we do for our own marketing strategy and for our clients’.
KPIs are our vital signs.
You could say our whole team is pretty cozy with our KPIs — meaning that each of us knows exactly what they are, and every strategic conversation centers around them.
Do you feel the same at your dealership or company?
If not, it’s time for you and your KPIs to go beyond first-name basis and settle in for some “Netflix and chill” instead.
What Are KPIs?
A key performance indicator (KPI) is a measurable metric or value that determines how effectively your company is achieving business objectives.
A KPI is not the objective itself. It’s the guiding light along the path to your objective, letting you know whether or not you’re going the right direction.
For example, when we do digital marketing for auto clients, our objective is for them to sell more vehicles. The KPIs we measure include:
- Vehicle description page (VDP) views
- Search result page (SRP) views
- Organic search traffic
- Facebook Offline Events
- Internet leads and customers in the CRM
We measure and track these KPIs month over month to make sure our efforts keep the client on track to sell more vehicles.
In addition, we provide our clients with a monthly report on these KPIs, along with several other data points that impact them. We compile, analyze, and share this data because we believe in transparent services based on data — a testament to our company manifesto.
Why You Need to Establish KPIs
What gets measured gets improved.
You can only measure how things are improving (or worsening) if your results are quantified. Your KPI numbers will help you understand the health of your business and make adjustments to your strategy when needed.
Plus, you have a finite amount of energy. When you have KPIs, you know exactly where to spend it.
For example, say you decide to test out dynamic retargeting ads on Facebook for your business. If one of your KPIs is product page views, then you can analyze that metric to see if this new Facebook strategy will contribute to your objective of increasing sales by 10% in the next quarter.
After a few months, are your product page views trending upward? Great — continue running dynamic retargeting ads with confidence. By measuring your KPI in relation to this change, you have the data to show whether the new idea is beneficial or a flop.
Also, KPIs create unity. They unite your team toward achieving a common objective — but only when they’re clearly defined.
How to Identify Your KPIs
First, understand that your KPIs should measure your progress toward your overarching company goals. Less is more — our friends at HubSpot recommend focusing on four to 10 KPIs.
Of course, you can reference KPIs from others in your industry as a starting point, but ultimately, choose the KPIs that are most relevant for your specific situation. So, break it down for your company.
And trust us — it’ll take time. You won’t define your KPIs in just one meeting! Just ask our CEO, Sarah:
“We realized we needed a common language for our goals, and that is where our KPIs began to be developed. Through a lot of discussion, we eventually came to a consensus for our KPIs at 9 Clouds. . . . Without this, we were stuck recreating the wheel every single day, trying to get on the same page and arguing about expectations. Believe me, it wasn’t enjoyable.”
— Sarah Carnes, 9 Clouds CEO
So, take a company retreat, and get your sticky notes ready. Here are three suggestions for defining KPIs.
1. Focus on What You Can Control
Your KPIs need to be metrics you can actually impact. You’ll never make improvements by tracking metrics over which you have absolutely no control.
I can’t control how many vehicles an auto dealership client sells this month. I can’t control if Dan the Car Salesman picks up the phone to call the hot lead we just sent to his CRM via our lead tracking software. So, it wouldn’t make sense for a 9 Clouds KPI to be “number of phone calls made to leads.” That’s out of our hands.
But, our team can affect how much traffic ends up on the dealership’s VDPs. That’s why VDP views are one place where we focus our efforts with auto dealer digital marketing.
2. Work Backward from Your Objective
Think about your objective — for example, increasing online orders by 10% this year, or increasing vehicle sales from last quarter — and work backward from there.
What needs to take place for this to happen? Thinking backward from your main objective could look something like this:
More vehicle sales > more phone calls to leads > more online leads > more product page views > more website traffic > increased digital ad impressions.
In this example, you can’t control how many people walk into a dealership and buy a vehicle. But, you can control your Facebook ad spend or targeting strategy to get people started in the right direction. This is a good starting point for thinking about an auto dealership marketing KPI.
3. Understand Your Story
There’s a piece of advice often told to playwrights and authors:
Before you sit down to write, walk into a bar, approach a stranger, and tell them your story from beginning to end. If you’re not able to get through the synopsis, if it doesn’t make sense, or if the stranger can’t follow along, you’ve got work to do before you start writing.
Do you know your company’s story from beginning to end? Do you understand each of the pieces that must fall into place to make your business work?
If not, back up. Map out each step of the process that’s going to get you to where you want to be, whether that’s selling cars or lattes or T-shirts or software.
You must understand the overall story of your business in order to know which metrics (KPIs) are going to determine your success.
Know Your KPIs? Now What?
Once you’ve identified your KPIs, you’ll want to go from the “friend zone” to “Facebook official” with them.
In other words, you need to know your KPIs — and so does every single person on your team. Your marketing KPIs must be the heartbeat of everything you do.
I’ll let you in on a secret I’m a little embarrassed about. During my first few months of working at 9 Clouds, I didn’t really understand KPIs or why they were important, and most of the time I couldn’t remember what they were.
Then, one day, I wrote them on a Post-it note and put it by my desk. That’s when everything changed. Suddenly, I had a reference point for contributing to strategy meetings. I knew what I was looking for in Google Analytics. I started being a more valuable member of the team, simply because I got “cozy” with our auto dealership marketing KPIs.
So, what’s the status of your KPI relationship? Are you still in the “friend zone”? Have you even met?
It’s time to get cozy with your KPIs. Your business depends on it.
Let Us Know If You Need Help!
If you’re feeling lost with your business objectives and the KPIs you need to reach them, reach out to us, and let us know how we can help. We’re happy to discuss your auto dealership marketing strategy.
Want to see what KPIs look like in action?
Download our 2021 Performance Benchmarks Report to see the industry standard for a variety of marketing metrics, like website bounce rate, Facebook advertising click-through rate, Google Ads cost per click, and many more.