Aligning Key Performance Indicators With Organizational Goals

Key Performance Indicators (KPI’s) are used to assess performance, and are a special subclass of quantifiable metrics that are most closely aligned with your critical business objectives (Establishing Service Metrics and Key Performance Indicators (KPIs) | University IT, n.d.). Defining an organization’s business goals, identifying which KPI(s) can measure those goals, and monitoring and adjusting tactics is an effective way to make impactful data-driven decisions that result in meeting business objectives.

“If you can’t measure it, you can’t improve it”
–Peter Drucker

There are two types of KPI’s: Visionary and Tactical, which are most easily defined by referencing the Hub-and-Spoke method. A Visionary KPI reflects what your company is trying to achieve — the whole ‘wheel’, the big goal. A Tactical KPI refers to the smaller individual goals and objectives from the spokes (Jackson, 2015).

Aligning KPI’s With Business Goals

For metrics that are impactful towards business goals, using the REAN framework (Jackson, 2015) will ensure marketing efforts are structured to reach users in any stage of the customer journey. Lets say that a company wants to increase their brand awareness and they have determined the most effective way to do so would be to increase engagement with new website visitors. The REAN framework consists of:

• Reach: how you will attract customers/reach them. Example: social media, paid Google ads, direct mail, etc.
• Engage: once you reach them, how you keep them interested — interaction on the channel they reached you at. Example: getting website visitors to click to other pages and continue reading.
• Activate: a pre-defined first action you want the visitor to take — a conversion. Example: complete a form to download a free ebook.
• Nurture: activated visitors who return to consume more of your content. Example: a user loves the ebook they downloaded for free. At the end of the ebook they see a CTA for another free ebook and then click to your website to download a second ebook.

Developing KPI’s

After identifying REAN objectives, ensure that your KPI’s reflect company goals and are actually integral to success (How to Use KPI’s to Grow Your Business, 2017). To achieve an actionable KPI, four attributes must be assigned to the metric:

• Timescale: metric reported over a period of time. Example: hourly, monthly, quarterly, annually.
• Benchmark: metric has a standard or benchmark to compare future metrics to. Example: if page views per user is your metric, the benchmark could be the average page views per user over the previous 365 days. An increase or decrease from this benchmark would determine the deviation.
• Actor: the person retrieving this metric and who would take action to alter it’s trajectory, if needed. Example: if page views per user deviated by -30% (standard deviation being 20%), this actor would take an action to fix the deviation.
• Action: the action the actor will take to remedy the metric that needs attention. Using the page view example above, this action could be the actor researching and finding that declining page views per user is the result of a 404 error, causing users to leave the site. The action could be to bring the dead page back live or update the link to another page that is live.

After defining how you will Reach, Engage, Activate, and Nurture your customers, map the REAN stages to the KPI’s that will contribute to those objectives.

Real World KPI’s

An example of a business objective with REAN-defined KPI’s could be that an organization wants to increase website visitors and their level of engagement by 20% by the end of the year. To do this they would:

• Reach: use paid social media ads to attract new visitors.
• Engage: incorporate “a similar article we think you’d like…” copy and suggested articles, on all articles.
• Activate: add a free pdf or ebook download, with a topic relevant to the articles they were engaging with.
• Nurture: setup a sequenced autoresponder to send 5 days after the download, suggesting an additional pdf/ebook to download

To monitor their KPI’s, they would:

• Timescale: monitor the number of unique visitors and page views every week.
• Benchmark: look at the number of unique visitors and page views for the previous calendar year and divide by 52 to determine a weekly average to use as the benchmark.
• Actor: the digital marketing employee who reviews at the analytics each week to determine if they are above or below the benchmark.
• Action: if below the benchmark, the actor will change which content is recommended to users. If above the benchmark, the actor will add the popular content to more locations that recommends content throughout the site.

In summary, utilizing the REAN Framework to reach customers at any point in their journey, developing actionable KPI’s, and mapping the two together are the foundation to successfully align KPI’s with business objectives.

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