Boosting Online Success: SMART Objectives & Effective KPIs

Setting Objectives and KPIs

Before embarking on any measurement strategy, it is crucial to define objectives and KPIs clearly and effectively.

Objectives form the foundation of digital analytics and strategy, allowing our actions to be successful. To do this, it is necessary to answer questions such as: 

What is the purpose of this website or application?

What do we expect visitors to do?

What do we want to achieve for the company? 

What is a metric

A goal must be measurable and related to a metric, which is the quantitative value we seek, such as: number of users, number of sessions, pages per session, bounce rate, conversion rate, ROAS. These metrics tell us how close we are to achieving our goals. 

Users, sessions, and page views

It is essential to differentiate between users, sessions, and page views, as these three terms often cause confusion.

A session is a set of events or interactions that occur when a user visits a web page. 

Within a session, the user can visit multiple pages and perform various actions, all of which are considered part of that session. 

Behavior Metrics

There are behavior metrics associated with the quality of visits, among which stand out:

• Pages per session: the average number of pages visited per session. In theory, the higher this number, the better, but be careful not to force the user to navigate unnecessarily.

• Bounce rate: the proportion of users who arrive at our site and leave without interacting. A lower percentage is preferable, although not always negative, as in blogs or news sites where a high bounce rate may indicate that the user fulfilled their goal.

• Average session duration: the average time a user spends on our site. In general, the longer they spend, the better, but always consider the context of our website.

KPI vs Metrics

A KPI must be measurable and is a primary indicator of how far or close we are to meeting our goals.

A KPI is a metric, but not all metrics are KPIs. To better understand the difference, let's look at an example: If in an imaginary company we have to increase the profitability of all Google Ads campaigns, we could summarize it as:

Objective: Increase Google Ads profitability by 20% during 2023.

KPI: ROAS (Revenue/Costs) is the return on advertising investment. It is the metric to use to see how far we are from increasing profitability by 20%.

Metrics: Cost, clicks, CPC, revenue, conversion rate, average order.

In the example, we can use the cost metric, the lower the cost, the better the KPI will be since the ROAS is the income between the cost, the lower the cost, the more positive the KPI and the closer we will be to achieving the goal. The same with clicks, the less we pay per click, the better results we will have. Although we have a clear KPI, we also have to take into account which metrics we need to follow. 

Importance of Macro-conversions and Micro-conversions

It is essential to distinguish between macro-conversions and micro-conversions. The macro-conversion is the main goal of a website, while micro-conversions are the intermediate steps users must follow to reach that goal.

Here an example:

Macro-conversions: Make a sale

Micro-conversions: All intermediate steps.

Microconversions are smaller, incremental actions that users take on a website or within a digital product that contribute to the overall conversion goal. They are important because they allow businesses to measure user engagement, understand user behavior, and optimize their conversion funnel. Microconversions can be used to identify bottlenecks or opportunities to improve user experience and ultimately, increase the likelihood of achieving the primary conversion goal.

Examples of microconversions include:

1. Newsletter sign-ups: Users who sign up for your email newsletter are expressing interest in your content and may be more likely to convert in the future.

2. Time spent on the website: The longer users spend on your website, the more engaged they are with your content.

3. Social media shares: Users who share your content on social media are helping to increase brand awareness and reach.

4. Adding items to a shopping cart: Users who add items to their cart have shown purchase intent, even if they don't complete the transaction.

5. Video plays: Users who watch your videos are engaging with your content and may be more likely to convert.

6. Downloading a whitepaper or e-book: Users who download informational material are expressing interest in your product or service.

7. Completing a quiz or survey: Users who participate in quizzes or surveys are interacting with your brand, providing you with valuable insights and data.

Tracking microconversions allows businesses to better understand user behavior and make data-driven decisions to improve the user experience and optimize conversion rates.

It is important to note that the macro-conversion of a company may be different from the macro-conversion of a website. For example, in the case of a solar panel installation company:

Company macroconversion: Sale of solar panels

Website macroconversion: Lead generation

Microconversions: Website visit, Form completion, Product page visit.

This example clearly illustrates that the company's macroconversion is completely different from the website's macroconversion.

Conversion Funnel

The conversion funnel visualizes the various micro-conversions that users make on their way to reaching a goal. It starts with a wide range of potential customers and gradually reduces down as users take specific actions.

By understanding how the funnel works and analyzing user behavior, businesses can optimize their strategy and increase the final conversion rate.

Mastering the art of the conversion funnel is key to driving success in today's competitive digital landscape.