Whenever you do any business or do any work, then you need to know where your business stands. Is it giving you any benefit or not?
And to know this you need to have a measuring scale or some measurable metrics to measure the performance and success of your business.
These barometers will tell your actual position and also you can improve where you are lacking.
So straight to the point, this article is all about the KPIs which stand for Key Performance Indicators. Further, these indicators help businessmen to make better and smart business decisions.
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Defining Key Performance Indicators.
Types of KPIs
Some Essential KPIs to Track for Business Growth
Defining Key Performance Indicators.
‘Key Performance Indicators’ is the abbreviation of KPIs, which are performance metric of a business that tells whether the business is achieving its goals or not.
Companies or industries use these indicators to improve the points or drawbacks where they are lacking so that they can achieve their key objectives over time.
In simple terms, KPIs are the quantifiable metrics or values of your business that you have to track to meet the desired target. For example, measuring the total engagement time, traffic coming to the website, total conversions, bounce rate, and many more.
Also, to know more about KPIs, read one of our top articles “12 Top Essential KPIs and Metrics to Track in SEO“.
Types of KPIs
There are 12 types of KPIs that measures the progress of a business:
- Quantitative Indicators
- Qualitative Indicators
- Leading Indicators
- Lagging Indicators
- Input Indicators
- Output Indicators
- Process Indicators
- Practical Indicators
- Directional Indicators
- Actionable Indicators
- Financial Indicators
- Outcome Indicators
1. Quantitative Indicators
These indicators represent the performance value by continuous or discrete numbers. For instance, in the form of percentages, ratios, whole numbers, etc.
Following are some examples of quantitative indicators in business are:
Sales growth.
Customer Lifetime Value.
Customer Acquisition Cost.
Monthly Recurring Revenue, etc.
2. Qualitative Indicators
The qualitative indicators are measured on the basis of the employee’s feedback or opinions instead of expressing numerically.
Further, some qualitative indicators are:
Level of employee satisfaction;
Changes in knowledge and attitudes
Knowledge about the Competition
Knowledge about the Sales Cycle and others.
3. Leading Indicators
These indicators define the actions that predict successful future outcomes for your business.
Furthermore, leading indicators examples are:
Index of consumer confidence,
Purchasing managers’ index,
Initial jobless claims,
Average hours worked, etc.
4. Lagging Indicators
Lagging indicators are used to compare the company’s current situation in a specific field with its past situation in the same field.
The following are the Lagging key performance indicators examples:
Sales Revenue,
Unemployment rate,
Corporate profits and many more.
5. Input Indicators
These indicators are used to identify the inputs or resources that are needed to produce the desired result.
Moreover, some examples of input indicators are:
Human resources,
Extra Staff
Materials,
Financial resources, etc.
6. Output Indicators
As the name clears itself, output indicators are used to describe the final progress of the outcomes.
For example, new customers acquired,
total revenue, and profit
Total number of goods created by a single process,
Net sales percentage growth, etc.
7. Process Indicators
Process indicators are the measurement values that describe the productivity of a particular process and also about its functioning.
The following are examples of process indicators:
8. Practical Indicators
Practical indicators look out at the company’s existing functions and give a report on how that process affects the company, usually involving observation or feedback on that process.
9. Directional Indicators
These indicators are used to compare the company with its competitors to determine its success.
Moreover, directional indicators can help in evaluating your company’s position.
10. Actionable Indicators
Actionable key performance indicators measure the effectiveness or impact of changes that are implemented in the company over a period.
11. Financial Indicators
Financial indicators are the measurement values that account for the company’s financial health, stability, growth, and business viability.
Further, the examples of financial indicators are:
Growth in Revenue.
Net Profit Margin.
Gross Profit Margin.
Operational Cash Flow.
Current Accounts Receivables.
Inventory Turnover, etc.
12. Outcome Indicators
Key Outcome Indicators are reports of whether the project or company is meeting its goals in the short or long term.
Some Essential KPIs to Track for Business Growth
If you don’t wanna know only your winning factors but also want to know where your business is lacking. Then, you should focus on improving the following factors or KPIs that are essential to increase your sales and leads.
The total number of KPIs is not fixed because they are specific to each type of business. So you will get different answers on asking about the KPIs of different organizations. Some of them are:
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1. Conversion Rate
Conversion rate is Key KPI to measure SEO performance or success in a business. Further, via this indicator, you come to know how many total potential customers not just opened your website site but also buy products or services from you.
2. Organic Traffic/Organic Sessions
Organic traffic is another vital indicator that depicts how much traffic comes from the search engines like Google, Yahoo, Bing, etc.
Further, the traffic driven from unpaid sources like search engines is referred to as organic traffic. In other words, you don’t have to pay any money to attract organic traffic to your site.
3. Customer Lifetime Value(CLV)
The customer lifetime value (CLV) indicator gives you a customer experience program that helps to acquire new customers and retain existing ones while maintaining profit margins.
CLV is defined as a measurement of how valuable a customer is to your company, not only based on a purchase-by-purchase but across the whole relationship.
4. Average Engagement Time
Average engagement time is another measurement indicator that shows the amount of time that a user spends on your site or how much time your site remains open.
Moreover, according to a report, the good average engagement times should be between 0:27-1:30, for an average of 46 seconds.
5. Click-through Rate(CTR)
Another significant KPI(Key Performance Indicator) is the Click-through rate. Additionally, CTR is the ratio of the number of clicks your site received to the number of times your site is shown.
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6. Bounce Rate
Bounce rate is another essential key indicator that tells you the percentage of visitors that visit your site but only after viewing the first page, do they leave your site.
7. ROI
Return on Investment (ROI) is a profitability key performance indicator. It also evaluates how well an investment of your company has performed. Furthermore, ROI is expressed as a percentage and is obtained by dividing an investment’s net profit (or loss) by its initial cost.
8. Page Load Time
Page Load time is the total amount of time, a website’s page takes to load. Further, a good load time gives a user a positive experience.
Moreover, the ideal load time should be about 2 to max 5 seconds. Also, the longer the load time, the higher will be the bounce rate.
9. Keywords Ranking/Search Ranking
The other essential indicator(KPI) is keyword ranking. Further, this indicator tracks the specific keywords or search queries that the target website or web page ranks in SERPs(Search Engine Results Page).
Additionally, the keyword ranking or search ranking is the position or rank that your site got in Google for a specific search query.
10. Organic Visibility
Organic visibility or search visibility is another important key indicator that tells you about your organic ranking performance in brief. This factor also helps in determining the online performance of your site in different domains.
Conclusion
Finally, the complete article is all about Key Performance Indicators(KPIs) you need to know. After reading the complete article, you will come to know about the types of KPIs, and also essential KPIs you need to track the SEO performance in business growth.
For further details on different key indicators, contact the best SEO company in Delhi/NCR.
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