KPIs are tricky

Setting the wrong ones might make more of a mess rather than help you

Created on 14 March 2024.

A website, a company's website should be for the entire company, right? However, who is really responsible for it? Some companies have a "digital arm" that is in charge of the website. Sometimes that group is called "e-commerce division" or sometimes it's just "marketing department". Doesn't matter so much.

Sooner or later they call for backup. For outside help. And they might hire an agency to do some of the work.

After a while anybody with an objective view can spot some things that don't feel right. Let me explain:

The purpose of a company, any company is or should be to create good products and sell them to as many people as possible, right? So it shouldn't matter so much if the sale happens online or offline. Or if the product is sold in their own store or at a partner's store? Right? A sale is a sale.

However, it does matter. The e-commerce department has KPIs. The retail store has KPIs. The sales people have targets etc.

Even if the intentions were good, at the end of the day, each 'division' wants to see their number grow. And they care more about that (their own number that could be at an individual level or a department level) rather than the 'whole'.

Since it does matter to somebody, it means that those differences outlined earlier matter as well. And this could lead to bad decisions and/or lost opportunities.

There are real-world cases where a decision maker didn't push forward with an objectively good idea because, at the end, the sales could not have been attributed to their efforts or to their department efforts.

A solid example would be making a cool change on the website that will lead to more in-store visitors ready to make a purchase. The person who has the website in their responsibility will not be encourage to make this change.

Why? First of all it's probably a bit of a headache since that person might need to coordinate with store managers and other people from other departments. And secondly, because his KPIs might actually not be influenced in a positive matter.

So the logical conclusion is: Why put in such an effort and get so little value.

The thing is that "little value" is relative to that role or department. Or that KPI.

In fact, if you look at it as a whole, what seems to be "little value" might actually be "of great value". More visitors in-store, better online and offline experience, more purchases, more chances to up-sell or cross-sell etc.

It's not unheard of a customer journey such as: online -> offline -> purchase -> subscribe to newsletter -> valued subscriber -> eventual online purchases.

But if your chain breaks at the first link, online -> offline, then all other opportunities are wasted. Even if they might end up beneficial to the online department as well, eventually.

To conclude, what can be done? Is this a "tracking" problem? A "data" problem? I don't think so. Not really.

I think it's a KPI issue. That's where the main negative influence comes from.

Even if all the employees are well intended and capable human beings, having the wrong KPIs will certainly not help you achieve the best results possible.

And if you are an agency? I encourage you to not be let down by this and keep pushing for such great ideas or experiments.

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