What Key Performance Indicators Are Businesses Tracking?
When entrepreneurs first have their “million-dollar idea” or start to pursue their passion project in the form of a business, the first thoughts are usually more about brand identity and product, rather than things that come to mind further down the line, like taxes and KPIs (Key Performance Indicators). While KPIs are an essential part of measuring the success of a business and analyzing almost every aspect, not every business owner will know what they are or why they should even care to monitor them. KPIs show a business’ performance against its goals and can be used in different areas, such as employee performance metrics, financials, and operations. In the digital age, KPIs, like social media metrics, have become an important part of the marketing side of running a business and can often influence decisions that can make or break a business in the end.
That said, where do small-business owners and marketers land when it comes to being aware of their KPIs? We wanted to learn more about these metrics from a small-business perspective, so we surveyed over 700 owners and marketers to find out. Read on to get into the whats, whys, and hows of tracking KPIs, as well as how you can implement them into your business practices in the most beneficial ways.
- One in 4 business leaders expects their expenses to worsen over the next six months.
- One in 5 business leaders only check their KPIs quarterly or less often.
- Only 41% were very confident that they had accurately calculated their KPIs.
A Marketer’s Perspective
As a marketer, the KPIs you track will look differently depending on what exactly you’re doing and what your strategy is. Of course, in today’s landscape, social media is as much of a marketing tool for businesses as anything else, and the industry-standard metrics are always changing
Other indicators, like website traffic, conversion rate, followers, and click-through rate (CTR), are important to understanding the successes and failures of a digital marketing strategy. We asked 226 marketers included in our study about what KPIs they track most frequently and the benefits they’ve seen from these indicators.
Social media engagement was by far the top KPI that respondents in our study were tracking (61%), though that was followed closely by website traffic (60%). With site visits and conversion rates following those numbers, it seems that marketers are focused mainly on traffic and audience engagement.
Interestingly, returning visitors was a metric that marketers didn’t track as commonly (33%), though the fact that the least tracked KPI was return on advertising spend confirms that marketers are really focused on traffic and engagement more than anything else. Most marketers, according to our findings, calculated their KPIs either weekly or more (38%) or monthly (38%), and the top benefit that companies had experienced from keeping up with their marketing KPIs was better goal setting (49%).
Business Owner Expectations
Everyone is feeling the sting from the inflationthat has plagued the U.S. since the start of 2022. Businesses aren’t immune to that; if anything, they feel it just as much as the average consumer does. That’s why it wasn’t especially surprising that 25% of the business owners we surveyed said they expect their expenses to worsen over the next six months.
It’s a tough reality to face, but it’s one that business owners are able to stay on top of through tracking certain KPIs, like sales growth, ROI, and net income; not just their expense metrics. Read on to learn more about the KPIs that owners are keeping track of, how much they spend on tracking these indicators, and more.
Considering business owners’ bleak outlooks on expenses over the next six months, it’s no wonder that expenses was among the top 10 KPIs being tracked (56%), bested only by revenue (68%) and net income (59%). And just like marketers, business owners said that better goal setting was the top benefit that they experienced from tracking KPIs (61%).
One of the most interesting things we learned from the 567 business leaders and marketers that we surveyed for this part of the study was that the average amount spent on tracking KPIs last year was $7,296, despite the fact that just 41% cited confidence that they were accurately calculating these KPIs.
Dedication to KPIs
How frequently you measure and keep track of your KPIs really depends on what you’re tracking, and it varies from business to business. Depending on what metrics are most important to you, your dedication to tracking KPIs can fluctuate from doing a monthly report to checking metrics every single day as part of your day-to-day schedule.
We wanted to get a sense of how much time business owners and marketers devote to measuring KPIs, and the results were pretty eye-opening.
Of the respondents in our survey, 68% said they taught themselves how to calculate their KPIs, and regardless of how they went about learning how to do it, 49% said they calculate KPIs on a monthly basis. Thirty-one percent said they do it weekly, while just 20% said quarterly or less often. The top way that businesses said they tracked KPIs was through spreadsheets (63%), followed by computer programs (34%) and software (33%). Spreadsheets may be the most common due to their accessibility and versatility with calculations—providing updated insights as soon as new data is entered.
Keys to Success
It certainly seems that businesses and marketers have an awareness and understanding of the KPIs that are most relevant to their operations, but considering that only 41% were confident that their calculations were correct perhaps points to issues around the way businesses and marketers measure these indicators. Utilizing accurate data that comes from reliable resources, whether that’s software or spreadsheets of information that are used to calculate KPIs manually, is crucial in best understanding KPIs and using them to make smart, informed decisions for the future of a business.
By working with a company like Unsupervised, you can take a detailed look at your KPIs to see which are working best for your business. Unsupervised offers automated analytics and specific insights for busy entrepreneurs and business owners to utilize. To embrace the digital age and give your business its best chance, visit Unsupervised.com today.
Methodology and Limitations
We collected responses from 226 marketers and those from 567 business leaders and marketers in the United States. 42.7% identified as men, 56.1% identified as women, and roughly 1.2% identified as nonconforming or nonbinary. Respondents ranged in age from 18 to 79 years old. Those who failed an attention-check question were disqualified.
The data we are presenting rely on self-report. There are many issues with self-reported data. These issues include, but are not limited to, the following: selective memory, telescoping, attribution, and exaggeration.
Fair Use Statement
If you’re interested in the KPI habits and perspectives of small businesses and you enjoyed our study, feel free to share it. We just ask that you link back to the findings and that your purposes are noncommercial.