What Are KPIs? Why Are They Important? Marketing 101

Have you ever played a game and kept track of your score to see how well you’re doing?

In marketing, businesses do something similar by using “KPIs.”

But what are KPIs, and why do they matter?

KPIs help companies know how well they are doing with their business goals.

Like selling more products. Or getting more customers.

They sound like they are only reserved for large businesses. But they’re not. Any business of any size can use them to improve the results of a marketing campaign.

Let’s learn more about KPIs and why they are important!

What Are KPIs?

So what does KPI stand for?

It stands for Key Performance Indicators.

That’s a fancy way of saying “important scores” that show how well a company is doing.

Think of it like the scoreboard in a game.

It’s like you check your points to see if you’re winning.

Companies check KPIs to see if they are meeting their goals.

But KPIs can track performance at a granular level too. To see if the moving parts of a business are performing well. And working toward those bigger goals.

For example, if a company wants to sell more toys, one of its KPIs could be the number of toys sold each month.

Another KPI might be how many people visit their website to look at the toys.

These scores help the company know if they are doing a good job.

Why Are KPIs Important?

They are important because they help companies understand how well they are doing.

Or how well different parts of a business are working.

They act like a report card.

If the scores are high, it means things are going well.

If the scores are low, it means the company needs to make some changes to improve.

By looking at KPIs, companies can see what they are doing right and what needs fixing.

Let’s use KPIs in a marketing context.

For instance.

If a store sees that lots of people are visiting their website but not buying anything. They might change how their website looks or make their ads better.

It could be a case of something on the site not working. Like the add to cart button.

But you won’t know what it is. Unless you have a way to track performance.

KPIs help companies make smart decisions to keep getting better.

Examples of KPIs 

It would be impossible to give you a comprehensive list of examples.

As well as giving the best ones for your business.

Here are some simple examples of KPIs that companies might use:

Sales Numbers

How many toys, books, or games a company sells.

Website Visitors

How many people visit the company’s website?

Customer Reviews

How many stars or positive comments do people give to the products?

Email Sign-Ups

How many people sign up for the company’s emails or newsletters?

Social Media Likes

How many likes and shares do their posts get on social media?

These KPIs act like different scores that help the company know if they are doing well. Or if they need to make changes.

Real-World Example

These KPIs act like different scores that help the company know if they are doing well. Or if they need to make changes.

For me. I like to set a baseline for a KPI.

This then helps make decisions off the back of the results.

Here’s an example of how we use KPIs inside Elementary Analytics.

We have a free Excel report generator that people can download from an opt-in page on your website.

I’ve set a KPI of a 20% conversion rate.

Our baseline.

So, if 100 people visit the page. The goal will be to get 20 or more people to give us their details to download the page.

If 20% or higher. Great. It’s working. Don’t touch it. We know we can focus on other areas of the funnel.

Between 10% – 20%. Well, this isn’t ideal. But it’s not bad either. We would tweak and test small parts of the opt-in page to see if we can move towards the baseline.

Anything less than 10%. Or worse still zero. Then we need to do a complete review of the page. Even test a completely new page.


KPIs are like scores in a game.

They show how well a company is doing with its goals.

They also help businesses understand what’s working and what needs improvement.

By keeping track of these important scores. Companies can make smart choices to make their customers happy. And grow their business!

If you’d like to find out more about using KPIs as part of a larger data-driven marketing strategy. Then check out our guide to getting started with data-driven marketing.

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Picture of Phil Hughes
Phil Hughes
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