What is a KPI?
Well, let’s start with definition. You probably have heard about this in university or faced it in your business.
KPI stands for key performance indicator. It is important to understand whether your strategy is efficient and to define aspects you could change to see whether a different approach would gain more results. From this we are able to conclude that these indicators can tell us something important about the performance of our product or company. There are a number of KPIs, more than 1,000 in fact, and they differ for each business and task. So which ones are yours and how are they defined?
How do we define a KPI?
KPIs are often confused with metrics. A metric is just a number while a KPI helps track performance and progress. Some blogs may define a specific KPI you should use, but the truth is that your KPI depends on your goals and business. The indicators need to be defined according to your core business goals. The first step is to consider these questions:
- What is your desired outcome?
- Why does this outcome matter?
- How will you achieve your outcome?
- Which metrics will inform you that you are on the right path?
How do I use it?
The next step is to compare your goals with an outcome. What we can do is provide an example of how it works.
Let’s look at campaign A, which is a row of events for an alcohol brand. The goal was mentioned twice before event 1 and event 2 (columns 1 and 4). After the event, each position was measured. Here is what we see in the Week 1 and Week 2 columns (columns 2 and 5).
It is time to make conclusions for the next event. To do so, we should compare the goals and the results (Columns GOAL VS FACT), and we start thinking about which actions lead us to our goals.
For the moment, let’s imagine that we just have had event 1. Here we see that goal and fact differ, and we create extra actions to reach our goal, such as better training staff for the next event to sell more products.
A few weeks later we organize another event for the same brand but with these improvements implemented. The results of event 2 show us that our goals are still different, but now we can compare these two events and see whether our actions affect our performance.
The orange column is an indicator of efficiency, and that is how we know whether we should continue with this strategy or we should change something. Based on these KPIs, the strategy for event 3 will be corrected. That is how it works.
KPIs differ in each situation
For marketing, manager reputation of the brand is important. In this case, this person will pay attention to brand awareness and visibility metrics. Whereas a trade marketing manager is interested in sales, and for this person the most important metrics will centre around sales. For a business owner, the revenue will be the most important criteria. There is no one system for everyone.
In summary, KPIs are important for each business and even in your life when you set goals, as illustrated below:
- KPIs help clarify performance expectations and compare performance to meet your strategic and operational goals.
- When you have right KPI, it is easier to correct your strategy if needed.
- You can run business in more efficient way.
- KPIs focus your attention on what is important.
- KPIs help you manage more objectively.
- KPIs differ in each situation.
You can decide whether or not to use KPIs. It is your responsibility to know where you are going and how fast you will reach your goals.
Google ‘marketing’ and you will find more than 100 definitions. People call it an action, a message, a cause, a strategy and the like. In the last decade, marketing has become more than just an action or a strategy—it is a whole new world. If you understand how marketing works or if you are collaborating with someone who does, your business will sell things. As Peter Drucker observed, the aim of marketing is to know and understand the customer so well that the product or service fits him/her and sells itself. So far, no one has explained the core of marketing better.
You should understand that marketing is not an advertising. We are here not to explain theories like the 7Ps of marketing. Basics are important, but for now, it is better to understand what are we talking about and then learn the details. Marketing is a galaxy with more than 159 planets, and today we will discuss the most effective among them: direct marketing, social media marketing (SMM), affiliate marketing, guerrilla marketing, referral marketing, and experiential marketing.
Direct marketing is one of the oldest forms of marketing. It is when your customer receives a product proposal directly from you. This could take the form of a personal connection, an email with a discount proposal, a call, etc. The benefits of direct marketing are about clear statistics: you can see whether your proposed product is relevant by checking conversions. Using statistics, you can optimize your brand, proposal, buyer persona, etc. It is more cost effective to market to buyers who have been identified as likely to buy.
A good example of direct marketing is Skoda direct mail campaign. You can have a look here: https://youtu.be/LK3e505y0MA
SMM is essential because good companies need publicity nowadays. This is a form of marketing you see 100 times per day. Managing social media, writing posts and keeping your business page active is all about SMM. So how does it affect sales? By increasing brand awareness and brand loyalty, building brand equity and humanizing your brand. If you are new to the market, even if you have a great quality service or product without conversation with your clientele you will spend much more effort to become important at the market.
It is not really possible to find a particular example of SMM, but it can be explained by this picture. Or you can have a look at the Ibiza Essentials profiles on Facebook or in LinkedIn to have an understanding of what SMM looks like:
Affiliate marketing is all about partnership. There are four main elements/participants: a merchant (product offer), an affiliate (publisher), a traffic source and a client. Simply put, in this type of marketing, an advertiser picks your product (usually there are many who will do it) and then does everything it considers to be appropriate to sell your product. When the advertiser’s work is done, it receives a commission from sales. The benefit here is that the volume of traffic is quite large, which helps your company reach new customer bases in different countries and builds relationships with efficient affiliates.Affiliate marketing has a number of areas to work with but as examples, we will show you Pop up and Facebook campaigns.
Next is Guerrilla marketing, which is based on shock value: shock your audience, and you will stay in their memory. It must be something loud and engaging. Something that creates a lot of buzz ! This type of marketing is great for low budgets, as it goes viral, builds partnerships and is memorable.
One of the loudest Guerrilla campaigns by Richard Branson dressed up to promote Virgin airlines.
Referral marketing is a way to promote your product through your client. This is pure word-of-mouth, which can range from a person who shares an experience with another to a person who has some benefits through sharing a specific link. This means of gaining publicity is low in budget, based on trust between a non-client and a current client, an easier means for gaining and retaining customers, and high in engagement. Uber may be an example of how to use referral marketing.
Last, there is experiential marketing, also known as engagement marketing, which is based on experience. Through experiential marketing campaigns, users or potential users interact with a product in a real-world situation. This is an event-centric industry, but these events are unique for each brand and each product. The aim of these events is to make an offline interaction between brand and consumer. There are a number of benefits to using experiential marketing: it creates a specific connection between a customer and a brand; it is memorable; before, during and after a campaign there is increased publicity through online and offline buzz, such as photos, videos, discussions, hashtags and talks about the upcoming/passed event; and 65% of brands that use experiential marketing say that it positively correlates with sales.
Here is a campaign from Coca Cola company which may be considered the best in their marketing strategy.
Marketing today is so big there are more than 100 definitions floating around. All of them have the same aim, and it is greater when you incorporate all types of marketing into your strategy. If you know how to use marketing efficiently, then you will not lose money. Whether you self-learn marketing or use professionals is your choice, but as to the question of whether you should use marketing—if you want your product to be profitable, then you know the answer.