Key KPIs, ATM machines and other such nonsense

All KPIs are metrics, but not all metrics are KPIs. Are they key to the business’ success? Or do they contribute to it? When it comes to analytics, not all performance indicators are critical.

Something you may or may not be aware of is RAS syndrome (Redundant Acronym Syndrome). This is where an acronym is used but either the first or last word is used again anyway – RAS syndrome is itself afflicted ironically!

Some of the common ‘mistakes’ we all make (guilty as charged) are:

  • COVID disease
  • HIV virus
  • ATM machine
  • PIN number
  • DC comics
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The worst offender though has to be the ‘Key KPI’, which I hear more often than I’d like, working in analytics. Just to be super clear, KPI stands for Key Performance Indicator.

Christopher Penn puts it nicely, defining a KPI as:

“A number for which you will get a bonus or fired.”

So what is a ‘key’ KPI? My theory is that it’s a symptom of overusing the term ‘KPI’ when referring to any and all metrics, or performance indicators.

I’m sure most of us have used some form of project management tool like Jira, and have seen cases where the ‘high priority’ flag has been abused. This means that to escalate a real high priority item, something even grander must be used – a ‘highest priority’ if you will. But then what if that gets overused too? A ‘super-duper highest and of most importance priority’?

When it comes to looking in Google Analytics, it’s not uncommon to hear people referring to some of the out-of-the-box metrics such as Bounce Rate, Sessions, Average Session Duration, etc. as KPIs. I’m not saying that they can’t be KPIs, but my money is on them not being all that ‘key’.

Our co-founder Mark Rochefort wrote an article on analytics planning back in 2013 (an oldie but a goodie – the article, that is) which details in part the approach to figuring out what is a KPI and what is not. Mark suggests starting with the business strategy, then identifying supporting strategic goals. Your key performance indicators should be the metrics that best indicate your success in achieving these goals. Supporting metrics can be used to measure the many drivers that contribute towards the KPIs.

The distinction between a KPI and a supporting metric is important here. A KPI is “a number for which you will get a bonus or fired”, so is something like Bounce Rate something you would get fired over? Definitely not! If you would, then it’s probably worth looking elsewhere anyway (shameless plug – how about then working with us?)

I’m not saying Bounce Rate is not a decent metric or performance indicator in its own right, it’s just not integral or ‘key’ to the business’ success – it’s not a KPI.

The definition can also get a bit fuzzy when talking across functions, roles, departments, agencies, etc. For example, a KPI for measuring your PPC agency’s success could be CPC (cost per click), but that would probably not make the cut when looking holistically across the entire business. The agency, marketing manager, CMO, board of directors, et al will all have their own view of what is a KPI and what is a metric (supporting or not).

The stumbling block here is really in the language we use. Just because something is my KPI, does not make it everyone’s (or a business) KPI.

Let’s try to be more considered and deliberate when using the term ‘KPI’ to avoid having to one-up the language and start having to use terms like ‘key KPI’ or ‘main KPI’. Please.

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If you’re questioning what your marketing, website, or app KPIs should be, we can help. We run workshops to create measurement frameworks that support companies and teams knowing what is and is not important in ‘moving the needle’.

Get in touch to chat with one of our Analytics Consultants to see how and where we can help ensure you fully trust your data, and how you can use it to make better decisions.

Written by

Daniel is the innovation and training lead at Measurelab - he is an analytics trainer, co-host of The Measure Pod analytics podcast, and overall fanatic. He loves getting stuck into all things GA4, and most recently with exploring app analytics via Firebase by building his own Android apps.

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