The word “KPI” is often seen in business and marketing books.
Honestly, I feel uncomfortable even hearing words that many people use on a daily basis.
This time, we will carefully explain “KPI” in
web marketing
from the beginning using specific examples, and we will also introduce how to set it and how to do it all at once.
What is “KPI”?
“KPI” is an abbreviation that collects the initial letters of each of the Key Performance Indicators, and is generally explained as “Key Performance Indicator.”
However, there are probably very few people who understand the meaning just by saying, “Oh, that’s right.” At this point, most people probably have an image of “Is this an important indicator?”
I’m also curious about the difference between “KPI” and “KGI,” which always appears in a set.
“KGI” is an abbreviation for Key Goal Indicator, which is generally explained as “Key Goal Indicator”. However, “KGI” has the word goal in it, so it may be easier to understand.
As the name suggests, it refers to the numbers needed to achieve the final goal.
Now, returning to the explanation of “KPI” (Key Performance Indicator), it is important to note that “KPI” is not just a profit target.
In fact, it is sometimes used within a company to mean a simple profit goal, but originally it is used to select “important items that hold the key to success” from among the many processes that lead to achieving the goal numerical value. And that’s the value we set.
If the KPIs can be achieved, there must be a relationship in which the final goal can be achieved automatically.
Therefore, setting the KPI is the most difficult, and if you can set it correctly and clear the numerical value, you can say that you are making steady progress toward realizing the KGI.
Characteristics of “KPI” in BtoB web marketing
So what kind of numbers should we use as “KPIs”?
As a premise of looking at specific examples of “KPI”, it is necessary to consider the special characteristics of BtoB web marketing.
First of all, web marketing requires collaboration with multiple departments.
For example, the sales department is in charge of the closing, so it can be said that web marketing alone rarely produces results.
In other words, whether or not you ultimately receive an order for a project depends on factors other than the original elements of web marketing, such as negotiation skills during business negotiations, relationships of trust with customers, and product appeal.
Therefore, when setting “KPI”, it is necessary to set numerical values that can be controlled in web marketing.
Also, unlike BtoC, BtoB is characterized by the fact that it takes time to close.
The reason why it takes time is that multiple departments are often involved in making decisions as an organization, and compared to B2C, where individuals make decisions on the spot, it often takes more time.
Therefore, it is necessary to steadily build a relationship of trust, and it is important to consider such special characteristics when setting KPIs.
Specific examples of “KPI” and how to set them
So how should we set KPIs?
Let’s take a closer look at how to set it up, using a specific example of “KPI”.
The key is to repeatedly calculate backwards from your goal number.
・Confirm the “final goal” and set a specific “KGI”
First, we confirm the final goals common to the entire company and the annual goals unique to each department.
For example, let’s say that a company that designs human resources systems has a company-wide goal of generating 1 billion in sales.
“Sales = Number of orders x Average unit price” However, it is difficult to increase the average unit price, so basically you will aim to increase the number of orders.
Here, a specific target value is set as “KGI”.
If the average unit price is 10 million yen, the number of orders will be 100.
In the case of web marketing, the numbers will be narrowed down to those via the web.
For example, if 20% of orders are received via the web, the number will be 20.
Final goal: Achieve 1 billion sales for the entire company
KGI: Number of orders received via the web: 20
・Process analysis and narrowing down
With BtoC, you may visit the company’s website and make a decision on the spot, but with BtoB, it is common to go through several steps before receiving an order.
In line with this, the following trends can be considered in web marketing.
Attracting customers (visiting your own website) ⇒ Acquiring potential customers ⇒ Training ⇒ Business negotiations ⇒ Receiving orders
Analyze past data and calculate the rate of transition to each process in advance.
Attracting customers (visiting your own website) ⇒ Acquiring potential customers ⇒ Training ⇒ Business negotiations ⇒ Orders 50% 80% 50% 50%
At present, the only setting is “KGI = number of orders received” is 20.
Attracting customers (visiting your own website) ⇒ Acquiring potential customers ⇒ Training ⇒ Business negotiations ⇒ Orders 50% 80% 50% 50%
20 items
From there, repeat the calculation backwards to the previous step and fill in the numbers for all steps.
Attracting customers (visiting your own website) ⇒ Acquiring potential customers ⇒ Training ⇒ Business negotiations ⇒ Orders 10% 50% 50% 50%
1600 items 160 items 80 items 40 items 20 items
Set this as a “KPI”. Specific examples are listed below.
- Acquisition of potential customers…Number of downloaded materials, number of e-mail newsletter registrations, etc. 160
- Nurturing potential customers…Number of quotation requests, number of seminar participants, etc. 80
- Business negotiations…Number of business negotiations 40
In web marketing, this may involve directing customers to the department in charge of closing (negotiations).
It is important to set “KPI” up to this step and use it as an indicator for achieving “KGI”.
The only thing left to do is to come up with and implement various mechanisms and content in order to clear the KPIs.
Determination of “KPI” and verification of operation
Finally, once the “KPI” is finalized, the following items need to be verified in multiple ways.
- Are “KGI” and “KPI” consistent?
(If the KPI is achieved, will the KGI goal really be achieved?)
- Is it stable?
(KPI values need to be measured regularly, and is it possible to stably obtain data?)
- Is there simplicity?
(Whether the KPI itself is not complex and simple enough for the workplace to understand easily.)
Furthermore, it will be smoother if you consider in advance the measures you will take if the KPIs are not achieved.
In web marketing, speed is a big factor, and if you decide on multiple measures and reach an agreement in advance in case you can’t reach the KPI, you can immediately start implementing measures to recover. can.
We recommend running the PDCA cycle quickly because it makes it easier to correct your trajectory.
summary
“KPI” is a very important indicator that is indispensable for achieving “KGI”. If you set it correctly, achieving KGI will become a reality.
Rather than just chasing numbers, it is important to identify the process that is the key to success, work backwards, and apply it. Why not take some time to set these KPIs?