3-1 Blog: Defining Key Performance Indicators


Discuss the importance of defining key performance indicators (KPIs) that align to an organization’s business goals. Provide examples of how KPIs are used.

Key performance indicators (KPIs) are the critical sources of information that allow a company to track, evaluate, and understand how effectively it is reaching its desired targets. And an organization needs to establish KPIs that align with its business goals. Doing so will ultimately allow a company to understand its health and performance so that it can make critical adjustments in its executions to achieve its objectives. Using the two together in a coordinated effort, the company will also know when it’s in danger of missing its targets before it’s too late. As equally important, when KPIs are not linked to business goals, the company will likely waste an enormous amount of time and money gathering data that isn’t going to benefit it (All KPIs, 2020). And today, some companies are still making the mistake of measuring everything because they assume a lot of information will help them reach their goals. But that’s not the case. In fact, having too much data can be as useless as having too little. This information overload does nothing but waste valuable resources and attention that could be better spent elsewhere, which can be downright damaging to the business.

There are many key performance indicators that an organization can use to evaluate its success at reaching its goals. But to keep this post as clear and concise as possible, I will only focus on two of them (click-through rate or CTR and bounce rate). The click-through rate measures how many people click on a link or advertisement. And it can be used to gauge how well your keywords, ads, and free listings are performing. Also, it’s important that this KPI be used with others to measure a campaign’s effectiveness. Using SuperOffice’s email campaign as an example, it had a higher than average email open rate of 40%, but its CTR was only 4%. A low rate like this can be caused by overwhelming content in which everything in the email is fighting for the consumer’s attention. It can also stem from images that don’t display correctly, inactive subscribers, broken links, irrelevant content, not engaging the target audience during the days when they are most receptive to the brand’s messaging, etc. The latter was the case for SuperOffice, and it used this insight to improve its CTR by simply changing the days it sent its emails. As a result, this company increased its click-through rate by more than 100% on Saturdays and Sundays (Little, 2019).

 A bounce rate measures when a person enters a website at an entry page and leaves from it without interacting at all (Jackson, 2016). Anything over 70% is considered a high bounce rate (Little, 2020). And several factors can cause this, such as slow-loading pages, visitors aren’t getting the information they expected, low-quality or under-optimized content, etc. Also, this KPI can be used/evaluated alongside other metrics to gain valuable insights. For example, if there is an increase in the bounce rate and new visitors vs. returning, a marketer could dig deeper to see what content is driving traffic to the page. They could also see what impact it’s having on how long people are staying, which would shed light on the effectiveness of the company’s content. Of course, if the content isn’t working, it must be revamped because every customer journey begins with it.


All KPIs. (2020, November 3). When KPIs become useless- how to avoid mistakes.  https://allkpis.com/when_kpis_become_useless

Jackson, S. (2016). Cult of analytics (2nd ed.). Routledge. https://mbsdirect.vitalsource.com/#/books/9781317561880/cfi/6/28!/4/126@0:99.6

Little, J. (2019, February 21). What is click-through rate? Learn how to increase it in six steps.  The Daily Egg. https://www.crazyegg.com/blog/click-through-rate/

Little, J. (2020, May 11). High bounce rate? Here are the reasons & what you should do about it. The Daily Egg. https://www.crazyegg.com/blog/high-bounce-rate/

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close