The concept of success in the business world is as ambiguous as it is in personal life: for some, it means growing; for others, simply staying stable. But regardless of the objective, having KPIs by business phase is key to measuring whether you are on the right track.
Unlike personal achievements, in a company you need clear objectives and metrics that tell you whether you are reaching them. How do you measure that success? How do you know if you have achieved it?
That is where the famous KPIs come into play. Basic indicators that allow you to make informed and strategic decisions. They are the lighthouses that should guide you and that you should always be striving to reach.
In this article we explain how to identify the KPIs by business phase, because not all metrics are useful for every moment. The key lies in understanding clearly which stage your website or digital product is in.
Most common mistakes when defining KPIs (and how to avoid them)
Let us start from the following premise: defining your KPIs is not easy. Despite being a concept we use practically every day in the business world, it is not something to be taken lightly. KPIs will guide your business and lead you to make decisions of great significance. So it is worth having them completely clear.
Making mistakes when selecting key metrics or tracking them is quite common. The lack of knowledge about KPIs makes it very easy to fall into these errors:
Focusing on vanity metrics → We often focus on metrics that do not add value. It is quite common to be swayed by market trends and the KPIs that other companies use to make decisions. And that is not always the best approach for your business. You need to know how to focus on what really matters.
Not understanding that KPIs evolve → There are companies that, once they choose their KPIs, hold on to them for dear life. However, it is very important to understand that truly valuable metrics can change as your business progresses. You should always be willing to modify them.
Not carrying out a proper follow-up → Sometimes businesses choose the right metrics but fail to make good use of them. If we are not able to carry out quality tracking, we will not be able to turn them into actions with real impact on our businesses.
Spoiler: there is no magic formula that works for all businesses. You already know that success is an abstract concept that varies depending on each case. But that does not mean we cannot establish some basic criteria for each business phase.
Below you will find a guide for understanding how KPIs should be selected by business phase, from initial validation to customer loyalty. We explain what they need to answer and give you some practical examples:
Exploration stage: checking whether your proposition makes sense in the market.
The initial phase of any business. The moment to evaluate its reason for existing and answer the following question: Is there a real market need for my product or service?
To evaluate and measure success in this regard, we must focus on KPIs that indicate the level of interest or purchase intention from our audience. In other words: how likely they are to be interested in us.
→ Suggested KPIs: In general, the metrics to take into account are those that measure traffic or response rate in relation to our product or service:
Conversion rate (CR%) in surveys or forms about our service.
Level of interest through the Click-through rate (CTR%) that allows us to understand whether the messages or benefits we propose are relevant.
Cost per lead (CPL). That is: how much it costs us to get a member of our audience to truly connect with our service and become a contact.
Acquisition stage: generating traffic and interest in your solution.
Another of the most important phases or stages for any business is attracting qualified traffic and generating awareness among the target audience. In other words: becoming an option worth considering for our audience.
In this case, the metrics must answer a clear question: is our proposition generating attraction and is the audience showing signs of interest in the service? This is what we know as "consideration".
→ Suggested KPIs: As a general rule, the KPIs of this phase are related to the traffic and interaction that our potential customers have with our product (or the campaigns we pay for to give it visibility).
Click-through rate (CTR%) in our campaigns to understand whether the way we promote our service connects with their expectations.
In the case of paid campaigns, we will also be interested in knowing the Cost per click (CPC) to understand whether we are investing our money correctly.
Overall reach. We can measure it through impressions and it helps us understand whether we are reaching our audience and how many more people we need to impact.
Critical stage: turning leads into real, profitable customers.
Probably the most important stage for any business: getting their audience to become a real, paying customer. Logically, this stage is dominated by the star metric in the digital world: conversions.
However, it is important to clearly define what that conversion is. And not only that — it is also important to take into account other secondary KPIs, key for this conversion phase to truly be a success.
→ Suggested KPIs: In addition to the conversion rate, other derivative metrics must be taken into account.
Customer Acquisition Cost (CAC) will tell us what the real cost has been to acquire each new user who has gone from being a visitor to a customer. Thanks to this metric we can know whether user acquisition is profitable for the business.
Average order value: another key metric for finding out whether the quality of those acquired customers is good enough to be worthwhile. Sometimes it is worth acquiring fewer users who spend much more on their purchases.
Consolidation stage: maintaining sustainable relationships with your users.
Once users have converted within your website or digital product, what are you going to do to keep them and get them to purchase again? This is where the retention phase begins. One of the most complex phases when it comes to choosing metrics.
Is it enough for users to have paid but not use the service? How often should they buy? There are many questions that make success in retention vary significantly between businesses and sectors. And that is why it is so important to find the right KPIs.
→ Suggested KPIs: The metrics to keep in mind during this phase must respond to a key criterion: profitability. To evaluate whether a customer is retained and whether that retention is the right one, the results for the company must be positive.
Active users are the most basic KPI to bear in mind. It refers to the number of users who remain present in your website or product. However, note that each business may define an active user differently from another.
Repeat purchase rate – In most cases, this indicator will be decisive in understanding whether the current retention of users is profitable for the business or not.
Customer Lifetime Value (CLTV) is another key metric for many digital businesses and refers to the benefits expected from each user who remains active within the website or product. It is an estimate that allows us to determine whether to keep investing in a customer or not.
Churn rate is also a metric of great value for companies as it allows you to understand how many users have abandoned the service or unsubscribed. It is a KPI to never lose sight of.
You can see that defining KPIs for a digital business is not as simple as it might seem. In fact, it is no trivial matter. To ensure your business achieves its objectives, whatever stage it is in, you need to make good decisions.
Working with the right KPIs by business phase allows you to make decisions more aligned with your real objectives, avoid empty metrics and optimise your resources.
At Boost we are here to help you with your KPI strategy and the definition of key metrics for your business. In addition, we design personalised analytics and dashboards that adapt to the moment your company is experiencing.
Do you want clarity on your KPIs by business phase? Write to us and let us help you transform data into decisions with real impact.
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