How Often Should You Revisit Your KPIs?
The need to define your Key Performance Indicators is an old, tired concept. Been there, done that, we get it.*
But how many of us think about the need to revisit those KPIs? Perhaps you went through an extensive definition exercise. . . three years ago. Since then, you have redesigned your website, optimized via A/B testing, introduced a mobile app, and created the ability to sign up via phone. Do those thoroughly discussed KPIs still apply?
On the one hand, your true “Single Performance Indicator” should stand the test of time, since it measures your overall business success – which ultimately doesn’t change much. An ecommerce or B2B company still wants to drive sales, a content site wants ad revenue, a non-profit wants donations.
However, for the majority of businesses, digital does not encompass their entire customer interaction. It is common for digital KPIs be a leading indicators of overall business success. For example, submitting a lead or form, signing up for a trial, viewing pricing, downloading a coupon or comparing products can be online KPIs. They may not involve money directly changing hands (yet), but they are a crucial first step. These digital KPIs are even more likely to change as you add new site or mobile features.
So how often should you revisit your digital KPIs?
This can depend on two things:
- How fast your development is. If it takes you two years to redesign a website or launch an app, you can probably revisit your KPIs less frequently, since your action is generally slow moving. (If nothing has changed, then it’s unlikely your KPIs need updating.)
- Your customer purchase cycle. If you have a short, frequent buying cycle, you may want to revisit your KPIs more often. If you are a B2B company with a two-year buying cycle, this may be less critical.
My recommendation is to conduct a review of your KPIs and leading indicators at minimum, once a year. If nothing else, a review where nothing changes at least assures both the business and the analytics team that their efforts are appropriately directed.
If you have a short purchase cycle, and/or typically iterate quickly as a company, this might be better done every six months, and/or while planning for big projects that will may materially change your KPIs. For example, let’s say your signup process was previously all online. Now, a new project is introducing the ability for customer service representatives to help customers sign up via phone. A project like that could have a huge impact on your existing KPIs, and a reassessment is critical.
Now, keep in mind this applies to your overall business KPIs. Individual campaigns should still begin with consideration of what KPIs will be used to measure their success, every time.
Analytics is continually evolving, and performance measurement must assess your business against up-to-date objectives. However, KPIs are not only important for reporting, but also for analysis and optimization, which ultimately seeks to drive performance. By revisiting your KPIs, you can ensure that both the business and your analysts are focused on the right things.
* And still, it’s not always done. But that’s a topic for another day.