KPI Paradigm® can help you identify appropriate Key Performance Indicators and build a framework for calculating and distributing them.

Measures, which illustrate visitor behaviour and traffic volumes, are not indicators of web site success. Increasing hits, page views, and visitors may show that marketing campaigns are driving more visitors to your site, but not whether it’s performing well or not. No organization, with the possible exception of media firms, should fundamentally care if page views and visitor numbers increase. To extract real meaning from increases in raw numbers like page views or visitors it must be put into some context.

Instead, focusing on conversions is the key to success. Conversions are much more than tracking successful shopping cart check-outs. Conversions extend to non-commerce activities such as:

• filling in a form
• downloading a document
• signing up for an event
• registering for a newsletter
• responding to an email campaign
• purchasing goods or services (offline as well as online)
• consuming key content (measured by how long visitors spend on a specific page)
  

However, it’s still not enough to just measure the number of conversions. We have to somehow compare or relate the conversion counts to something else. The best way to accomplish this is to use Key Performance Indicators (KPIs) which are numbers that describeratios, percentages, rates, or averages. Well designed KPIs quickly inform how your site and organization is performing.

Determining KPIs and calculating them is not always easy and obvious. The KPI Paradigm® offers a methodology for identifying persons, departments, and information sources for creating and supporting KPIs. The resulting well-designed KPIs provide feedback that directly drives business goals.
The KPI Paradigm® asserts three main principles:

1. KPIs are part of a business structure of decision making and are decided upon from the top down. The top being business goals and down into CSFs (Critical Success Factors). Howver, to calculate KPIs, you need to start from the bottom up and look at raw measures including such things as web analytics reports, internal call center figures, online and offline sales, and other enterprise data. Measures will in turn combine into metrics, or relationships between numbers. Some of these metrics are your keys to the success of your goals; these are your KPIs.
2. The levels of the KPI Paradigm® align with the organization structure. Senior management is involved with Goals, middle management with CSFs, while technical staff (e.g., the analytics team, or person) is in tune with the Measures and Metrics offered by your web analytics platform.
3. The drivers of the KPI Paradigm® include both business and technical teams. Business goals and CSFs are driven by the business side of the organization, while Measures and Metrics are supplied by the technology and technology teams. These two drivers converge and bridge the needs of each, at the KPI level.

Definitions:
Goals & Objectives
Goals & Objectives are the overall ambition that motivates the organization, and is the measure of performance and achievement for those in the organization. For example, decrease Support Services costs, increase sales, etc..

CSF (Critical Success Factors)
CSFs are specific conditions that must be achieved in order for a business goal to be considered met. They have a timeline and a specific value that must be met. For example,  decrease Call Center calls by 20% over next 12 months, increase leads from high quality sources by 10% in the next 6 months, etc.

KPI (Key Performance Indicator)
KPIs are simply Metrics which are important enough to inform us how the business is doing against CSFs. For example, ratio of call Center calls to online support incidents, change in self-service registrations per month, leads per visitor for high quality sources, etc.

Metrics
Metrics are relationships between Measures and are almost always described as ratios, averages, rates, or percentages. For example,  average pages viewed per visit, downloads per visitors, revenue per order, etc.

Measures
Measures are raw numbers found in web analytics reports, corporate databases, call center reports, or various other data silos.

Unilytics uses the KPI Paradigm® to assist clients in identifying measures and metrics that matter when building meaningful KPIs. These well-designed KPIs provide the organization reliable, measurable progress reporting against enterprise objectives.

Contact us to learn more.