How To Set The Right Digital Marketing KPIs For Your Business

Understanding the user lifecycle and its relation to each digital marketing channel makes your digital marketing KPIs much smarter and more effective.

Kenya has skyrocketed to become a digital powerhouse in a short amount of time, which means plenty of opportunity for businesses here. Experts note that Kenya is now actually beating out countries like Nigeria in terms of percentage of connected devices, and it’s estimated that the e-commerce market in the country is going to hit billions by 2020, which will be roughly 45.6 percent of the entire East African market.

What does this mean for companies trying to reach that market? For one thing, the potential is there for them to succeed, but this is also a very unique market to penetrate. Key in any marketing initiative is knowing your proper KPIs, also known as Key Performance Indicators. In essence, these are concrete goals that you should be setting for your marketing initiatives to guide your strategy. Here are some key things to look out for.

Understanding the Nature of Each Digital Marketing Channel

Digital marketing offers a wide range of channels; search engine optimization, Google search and display advertising, social media marketing, email marketing, SMS marketing, user experience. The key thing in managing all or some of these channels is to understand the role that each one plays in your overall marketing efforts. We cannot expect each channel to perform and produce the same results. Email marketing will not necessarily produce the same results as social media marketing, or SMS marketing will not perform similarly Google advertising. It’s important to understand that each channel plays a different role in your user’s life cycle.

For example, in most cases a user that has never heard of your brand and sees your display advertising on a website, will not immediately buy your product/service because they are not ready to buy yet. They are simply browsing the internet and stumbled upon your ad which means they are in an “awareness” stage.

At the same time another user that already knows what they’re looking for, searches for your product on Google and sees your ad, is likely to buy your product because they are in an “interest” or “consideration” stage in their lifecycle.

 The User Lifecycle

This brings us to the topic of user lifecycle. This is crucial in understanding the role of each digital marketing channel and in turn how to set the right KPI for each channel.

Any consumer in any market goes through similar stages in their minds before they buy a product or service from any company. Those stages are almost the same across any consumer. The diagram below shows the typical stages that consumers go through and the digital marketing channels that typically correspond to each stage.

Understanding how each channel fits into the user lifecycle, gives a better understanding of the nature of each channel and what to expect of it.
Keep in mind that what varies from one consumer to another is how fast or slow the consumer goes from one stage to the next. For example, one consumer can see a brand advertising for the first time and immediately buy the product because they had an urgent need for that product. This means this consumer went from the “awareness” stage all the way to the “customer” stage instantly. While another consumer might see a brand advertising online for the first time but buys only after 3 months. In this case the consumer took 3 months to move from the “awareness” stage to the “customer” stage.

How long or short this process can take for every single consumer with every single brand is influenced by multiple factors including the consumer’s needs and wants, their financial situation, how effective the brand is in marketing themselves, etc. For example, if a consumer had an urgent need to buy a dishwasher and they had the financial means to buy one and they see an effective advertising from a dishwasher company, they are likely to buy from that company. While a consumer that has no need to buy a smart TV and sees an advertising from a brand selling smart TV’s is not necessarily going to buy that product immediately.

 Setting the Right Digital Marketing KPIs

One of the biggest advantages of digital marketing is data!

A digital marketer is a data-enabled decision maker. If you have the right tracking in place, you can measure and track every single customer interaction with your brand on and off the website.

But with all this data, it can be difficult to choose the right metric for the right marketing activity. But when you have a good understanding of the user lifecycle and how each digital marketing fits into it, you can be smarter with your setting your KPIs. For example, you wouldn’t use conversions (or leads) as your KPI for a Display advertising campaign because you know that Display advertising serves the awareness stage. You would instead use “impressions” or “website visits” as your KPI for Display advertising. On the other hand, with Google advertising for example you wouldn’t set “impressions” as your KPI but instead “conversions” or “website visits” because you know Google advertising typically serves the “intent” or “decision” phases. Email marketing on the hand might have “open rates” or “click-through rates” or “conversions” as KPIs.

 While these are some key things to look out for, the fact of the matter is that not every KPI is going to be relevant to every business and there is no rule book for what KPI goes with what channel. To try and figure out the ideal option for a KPI, you’re going to want to focus on any sort of measurement that is actionable, relevant to your digital marketing goals, and trackable based on the tools that you have. Keeping in mind the user lifecycle and its relation to each channel makes your digital marketing KPIs much smarter and more effective.