How can we determine if a digital business will deliver effective results?

“How can a multitude of numbers be interpreted as a measure of success?”

 

For a digital business to be efficient, it’s crucial to establish Key Performance Indicators (KPIs). These metrics, regardless of business type or department, are set to define standards for achieving goals and providing a benchmark for success. Not just for digital businesses, but all organizations and sectors need to set these performance indicators.

 

“But for different digital businesses, what are the most important KPIs?”

 

KPIs are used to evaluate the results against set objectives, typically visible as clear quantitative figures or specific goals we aim to measure. For digital businesses, there are four main types of important KPIs:

 

KPIs in E-Commerce

E-Commerce Platforms are crucial for many businesses. Some organizations create their systems on their websites or use renowned platforms like Shopee, Lazada, JD Central. Key indicators here include Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), Average order price/size, Conversion Rates like purchase, add to cart, or registration, Sales per Day, Number of Visitors, Cart Abandonment Rate, and Sign-Up Rate.

 

KPIs on Content Sites

Tracking news or articles on social media is rising. Many organizations create their websites for content dissemination or offer monthly or yearly subscriptions. Important metrics here include Page views per visit, Time Spent on Website, Comments per Post, Page Depth, and subscription and registration rates.

 

KPIs on Social Media

Everyone uses social media, including marketers, organizations, and advertisers, creating spaces to connect with their audiences on Facebook, Instagram, YouTube, Twitter, LINE, TikTok. Key results include Comment counts, Channel ratings, response or message volumes, shares, retweets, mentions on Twitter, and registration rates through social media.

 

KPIs in SaaS (Software as a Service)

Services offered via software or programs accessed through the internet, such as Dropbox, Google Drive, Netflix, have significant indicators. These include Churn Rate, Monthly Recurring Revenue, Trial Activation Rate, Time to Close, and Subscription Rates.

 

With these four types of KPIs, organizations must remember that solely measuring digital media KPIs or Vanity Metrics might not always suffice. We need KPIs that test the efficiency of digital businesses, known as Actionable Metrics. For example, if a social media campaign has high Engagement, we need to delve into each Content piece to understand what we communicated, which Content resonated and positively impacted the organization. This understanding helps in creating new Content that aligns with previous successful ones and possibly stimulates future sales. It’s important to determine if people are buying or using services as a result of this content.

 

When we have clear and comprehensive KPIs covering both online and offline, good results will follow, and every investment will become more valuable.

 

“Numbers will no longer be just numbers.”