Also known as KPI (Key Performance Indicator), performance indicators are important allies so that companies can assess the performance of tasks, verifying if they are being performed in order to meet the established objectives.
That is, they help to identify whether your company is adopting effective strategies or not. However, there are many options for performance indicators and it is not always recommended to adopt them all.
After all, each of them has a specific function, so you must select them according to what you want to evaluate within the company.
With that in mind, we designed this article to help you in this process. Read on and learn more!
If you are concerned about sales strategies, you need to adopt one of the fundamental performance indicators which is the CPA, the Cost Per Acquisition.
This means, therefore, measuring how much is being paid for a conversion, which can be a sale, registration in a form, newsletter subscription, download of an e-book, viewing in a video, among others.
Suppose you had a cost of $2,000 for ads on Google, but only one person bought a $100 product and another for $50.00.
To do the calculation, use the formula:
Total cost / Number of conversions.
In this case, = BRL 2,000.00 divided by 2, generating a CPA of BRL 1,000.00.
Therefore, your CPA is too high, causing you to lose more money than you make. Therefore, it is necessary to review this strategy, either by decreasing the investment or modifying the ad.
Therefore, the purpose of the CPA is to allow it to be possible to assess how much each action is costing, verifying whether the indicator is profitable or better than in older campaigns.
CPC (Cost Per Click) is a metric commonly used in online advertising and is the default charge for Facebook and Google ads.
This way, for each click, you will be billed; unlike CPA, whose collection only happens when the objective is reached, that is, when the conversion takes place.
Even so, you can manually set how much you want to pay for each click, giving you greater control over your campaign budget.
With this, you can create a fixed value for a CPC and even increase another one for a specific keyword.
This is one of the most important performance indicators because it allows you to find out which campaign is getting better results and, thus, being able to direct the investment to just one of them.
The CPC calculation is done as follows: Total cost of the campaign / Amount of clicks received by the ad.
The largest digital ad platforms, such as Google Ads and Facebook Ads, use the CTR (Click Through Rate), which stands for click through rate, and is also a very important indicator.
Therefore, this metric calculates the number of times your ad or website has been displayed and accessed, indicating how interested people are in a given result.
To calculate the click rate, use the following formula: (Number of clicks / Number of impressions) x 100
Assuming your ad had 5,000 views and 1,000 clicks, the total would be 0.2, which, multiplied by 100, would give you a 20% CTR.
One of the most popular performance indicators is the ROI (Return on Investment), which can be used in training, marketing campaigns and services.
This metric displays the amount invested and the amount returned, generating data for calculating the profit margin.
Thus, it must be used in any action that promotes profitability for the company, even in the long term, bearing in mind that, to calculate it, all revenues and costs must be considered.
Therefore, you should even calculate the hours that were invested in this business so that you can get a realistic data on the return.
With this, the ROI helps to discover how many reais are obtained for each dollar invested. It is worth remembering that it can be calculated in relation to several actions, even in social media posts, for example.
To perform this calculation, the formula is as follows:
((Revenue - Costs) / Costs) x 100
As an example, imagine that you own a bookstore and ran a campaign to sell new books, making an investment of R$20,000.00, which generated revenue of R$50,000.00.
So, in this case, you subtract $50,000 by $20,000 and divide the result by $20,000, then multiply it by 100, which totals 150%.
It is also important to highlight that there is ROAS (Return on Advertising Spend), which is one of the performance indicators commonly used by agencies to identify the return on investments in advertising campaigns.
Regarding ROI, its main difference is that it does not take into account other variables when making the calculation, such as employees' salaries.
5. Bounce rate
To analyze your website's traffic and engagement, it is important to have one of the most useful performance indicators, which is the Bounce Rate, also known as the bounce rate.
It shows how many visitors accessed a page of your website and then left without interacting with the platform anymore, that is, visiting other pages. When this event happens, it is counted as a rejection.
If you can keep up with this rate, it becomes possible to think of improvements to reduce this rejection, either by modifying call-to-actions or producing content that is more relevant to the persona.
To make a thorough analysis on this, it is worth, for example, measuring the bounce rate of each of the top sites that drive traffic to your platform, the keywords and the most accessed pages on your site.
There are several tools that perform these calculations, but the best known is Google Analytics, which divides the sessions on a single page by all sessions.
By analyzing all these performance indicators, you are able to select the ones that best fit your business objectives. While we're talking about this subject, take the opportunity to also check out what the conversion rate is and how it's done!
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