The Importance of Understanding KPIs in Marketing

– Quality traffic is more important than the conversion rate on sign up forms.
– A proper test should consider audience segmentation, ad campaigns, ad copy, creative, and the customer journey.
– Many businesses focus on easy metrics and brag about outperforming baselines without considering the whole story.Segment your audience, analyze ad campaigns, ad copy, and creative, and consider where sign up forms fit in the customer journey to truly understand the factors driving conversion rates.Brand: “So what’s the conversion rate on your sign-up forms?”
Me: “A form doesn’t determine the conversion rate, quality traffic does.”
Brand: “But we A/B test our sign-up forms based on conversion rate.”
Me: “Great! Are you segmenting by audience? Are you analyzing the ad campaigns that drive them, the ad copy, and the creative? Where do you display the form in your customer journey? Is your offer focused on collecting emails for sales or building relationships?”
Brand: “Ummmm”
As marketers, we have been told to track certain KPIs without fully understanding how to conduct proper tests, isolate individual variables, and truly comprehend the underlying factors that drive the results.
Why? It’s an easy metric to compare. It’s all their boss needs to hear because they don’t have a deep understanding either. As long as the results are decent, around 5-10%, everyone is satisfied.
Most businesses struggle with baselines, the standards accepted across the industry. When they surpass these standards, they boast about it, even if they are spending more on targeting people. Because telling the whole story doesn’t support the narrative.
If you’re measuring KPIs just for the sake of it, without understanding how they work, you’re going to encounter problems. #marketing #ecommerce #customerjourney

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