KPI - Key Performance Indicators

In our previous two posts, we covered the beginnings of how to optimize your sales funnel through testing. Once you’ve started by collecting data and have figured out the area of your sales funnel that needs the most optimization, we get to the most important step - figuring out what Key Performance Indicator(s), or KPI(s), you want to improve. 

A KPI is a metric that is used to measure the performance and progress toward a business goal. 

Examples of Key Performance Indicators include: 

  • Funnel Step Conversion Rate: The percentage of people who visit Step 1 of your sales funnel and move on to Step 2

  • Purchase Conversion Rate: The percentage of people who visit Step 1 and end up purchasing a product later on

  • Open Rate Percentage and Click Rate Percentage: The percentage of people who open or click an email

  • Cost Per Conversion (CPC) or Cost Per Lead (CPL)

  • Bounce Rate: percentage of people who land on your website and leave immediately

After you have your KPI(s) for your test, use them to create an objective.

An objective for your test might be “to improve my lead capture page conversion rate,” or even “to improve my lead capture page conversion rate without lowering my sales conversion rate.”  (In the second example, two KPIs are being used.)

Once you’ve figured out what your testing objective is, then you can start figuring out what element(s) on your sales funnel step you are going to test. There really isn’t a set standard in terms of what specific elements of a page you should prioritize, but anything you decide to test should answer your test’s objective.

When working with a brand new page, we try to test more wholesale changes, such as different layouts or designs, or even a completely different copy angle. This is because when you are launching a brand new page there is no set baseline, so it’s a good opportunity to figure out a starting point.

But once a page’s starting performance has been established, the changes that you test should be more subtle.

Using Qualitative Visual Reporting tools such as Heatmaps, Scrollmaps or Visitor Recordings can help you figure out how people are interacting with your page. A good place to start is often testing specific copy tweaks, like headlines. Copy can have a huge impact and is fairly easy to implement.

At the end of the day, before you launch any test, you need to be able to develop a hypothesis that reflects your overall objective. 

Example hypotheses include:

"Headline B will have a higher conversion rate than Headline A,” 

or

“Using an orange button instead of a green button will improve conversion rates.” 

The bottom line is that anything you test should be rooted with the objective of improving your Key Performance Indicators.

In our next blog post in this series about optimizing your sales funnel through testing, we will focus on planning how many variations of a funnel step to test and minimizing the length of time it takes to run a proper test.

By Stephen Prior / Apr 19, 2019 / No Comments
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