How to Choose the Right Metrics for Your KPI Dashboard

When setting up your Key Performance Indicators (KPIs), it's crucial to select metrics that align with your business goals and objectives. A well-defined KPI dashboard can help you track progress, identify issues, and make informed decisions. Here are some steps and considerations to guide you through the process:

1. Identify the Problems You Are Trying to Solve

Begin by clarifying the pain points or challenges your website faces. For example, are your conversion rates low, or do you have high bounce rates? Understanding the underlying issues will help you choose the right metrics to measure.

2. Define the Outcomes You Are Trying to Achieve

Once you have identified the problems, define the specific outcomes you want to achieve. This may include increasing user engagement, boosting conversion rates, or improving website usability. Clearly articulating these outcomes is key to selecting the appropriate metrics.

3. Mitigate Risks

Identify potential risks that could impact your website's performance and user experience. For instance, technical issues, poor user interface, or outdated content. Determine how you can measure and mitigate these risks using KPIs.

4. Assess What Evidence You Need to Prove Success

For each problem, outcome, and risk, think about what metrics would best prove that you are making progress. How can you measure the success of your efforts?

For example, if you suspect technical issues are causing high bounce rates, you may want to measure page load times, server response times, and device compatibility. If you are trying to increase user engagement, track metrics like time on site, bounce rate, and session duration.

5. Different Dimensions of the Problem and Success

Consider multiple dimensions when selecting your metrics. For instance, if you want to increase the number of users, you may need to track new accounts, page views, frequency of visits, and more. Each of these metrics provides a different perspective on user behavior and engagement.

Similarly, if you want users to complete a certain activity, focus on metrics like completion rates, start points, and drop-off points in the user journey. Understanding where users are exiting the flow can help you optimize the experience.

6. Focus on What Matters, Not What’s Easy

It’s tempting to choose metrics that are easy to measure, but it's essential to focus on the ones that truly matter. For example, while 'Likes' on social media may seem important, they don’t necessarily correlate with direct engagement or conversion rates.

Instead, focus on metrics that can directly impact your business goals. For instance, in the context of SEO, consider metrics like organic search traffic, keyword rankings, and conversion rates from organic search.

7. Focus on Trends, Not Points

When evaluating your KPIs, focus on trends over time rather than single data points. Trends can provide a clearer picture of your website's overall performance and help you identify potential issues before they become major problems.

Avoid setting unrealistic or unattainable targets for your metrics. Instead, focus on meaningful, achievable goals that reflect the health and growth of your website.

8. Practical KPI Recommendations

For a typical website, there are usually upwards of 7-10 KPIs that are most relevant. These should fit on a single screen and allow for quick evaluation. Here are some key KPIs to consider:

Organic search traffic Page load times Bounce rate Conversion rates Time on site Frequency of visits New user accounts Keyword rankings Engagement metrics (e.g., time spent, views, shares) Technical SEO metrics (e.g., mobile-friendliness, link building)

Select the KPIs that directly impact your business goals and provide the most actionable insights. Remember, it's not about having the most metrics, but about having the right ones to drive meaningful improvements.

Conclusion

Selecting the right KPIs is a critical step in optimizing your website's performance and driving business success. By focusing on metrics that align with your goals, providing meaningful insights, and focusing on long-term trends, you can continuously improve your website and achieve greater success.

For those interested in learning more about metrics, measurements, and healthy behaviors, I recommend my book, “Escape Velocity.”