Performance Measurement: Why It's So Important for Business

By James Robert- Feb 01, 2023 73

Performance, efficiency, and effectiveness are important indicators of each company. Every company should record as much as possible for all processes and projects. Performance measurement deals precisely with this task. So it is an essential function in terms of control and marketing. This is because an assessment of the relevant basic statistics is possible only through performance measurements. Based on the assessment, in turn, new possibilities emerge. Among other things, it allows reconstruction for the future or can be used as a motivating aid in achieving the goal.

 

In the following, we will show you which functions are used to measure performance. You can know from this how performance measurement is defined and why it is so important. Also, we explain how you canimprove the performance of the marketing system. And thus significantly how you can benefit from a more efficient process.

 

Performance Measurement Definition & Explanation

Performance measurement is a term that has found its way into many industries and fields. A general term is performance measurement, for example in control, where the efficiency of the project or the company as a whole is measured in this way. Of course, performance measurement is an important component of performance marketing. Performance measurement is used to measure how a marketing campaign fails. So you can know the skills and performance of marketing. For this purpose, various key statistics are evaluated in the performance measurement. And then the processes are optimized and adapted.

 

Performance measurement functions

Performance Measurement Performance performs various functions of marketing. On the one hand, the transparency of performance has increased significantly through the measurement of key statistics. This opens up the possibility of increasing performance by adapting to strategy, goal-oriented planning, and control. Also, precise assessment enables one to naturally adjust for future comparative processes or tasks. Due to the increased transparency and efficiency in services, explicit target incentives can also be defined. These help to motivate employees significantly and sustainably.

 

     Increase performance transparency by measuring key statistics

     Increase performance by adapting plans and strategies

     Optimization for similar processes and projects in the future

     The definition of goal motivation is possible, through which the motivation of employees can be increased.

 

This is why measuring performance is so important

Performance Measurement Performance marketing is fundamental. By measuring key statistics and performance values, for example, potential dependencies or goal conflicts can be uncovered. After a corresponding evaluation, adjustment and optimization are possible. Potential obstacles to the project or weak points of a particular process can be identified in certain situations. For example, if a website has a large number of visitors, but the conversion rate is still low, it indicates a weakness in marketing. For the future, performance measurements enable more realistic assessments. And, based on the experience gained, it may help to avoid potential flaws in previous projects.

 

How can you measure the performance of marketing measures?

In performance marketing, very different key statistics come into question for measuring the marketing system. Below, we present a selection of relevant key figures in more detail.

 

Traffic: Traffic is, of course, one of the most compelling and important key metrics of performance marketing. After all, all other basic statistics are based on the number of visitors. When there is a lack of traffic, there is a lack of automatic sales, return visitors, and interaction. So traffic is an important key figure for measuring the marketing system. This indicates a good way to increase the number of visitors. However, the traffic key image should always be seen in relation to other key images. By itself, traffic is not really a meaningful metric for measuring marketing activities.

 

Bounce rate: Another exciting key figure in marketing is the so-called bounce rate. This is the bounce rate, which indicates how many visitors leave your website again without interaction. The higher the bounce rate, the worse the rating. Incidentally, you can evaluate the bounce rate not only for the entire web project but also for all associated sub-pages. This enables the difference and ensures that the relatively weak aspects can be optimized for the target.

 

Session duration: Session duration is also an important indicator of performance marketing. It indicates how much time users have spent on your website. The duration of the session can often be extended using a little "technique". For example, you can keep visitors on your own site longer through surveys or videos. Also, internal links to other sub-pages or contributions ensure that visitors stay on your website longer. If the length of the session increases, it indicates that users enjoy spending time on your site and are genuinely interested in the topics.

 

Pages/session: How many pages are accessed per session before it ends? This metric is also very important. With the help of internal links, this value can sometimes be greatly increased. Ensure that users can access multiple sub-pages and posts from a single page. This usually increases the number of pages per session significantly. The more pages users visit, the more content they will use. And the chances of sales and income are much higher.

 

Returning Visitors: Returning visitors are clear evidence of a good marketing system. In the analysis, you can easily check how many visitors from the previous month returned to your site this month. Returning visitors indicate that they enjoy spending time on your page. Regular visitors are essential for website operators today.

 

Sales, conversions, sales: Of course, the most important key statistics of performance marketing should not be missed. Among other things, effective measures are seen in sales growth, a high conversion rate, or a high number of sales.

 

Customer values and  goals

The Customer Value is an average value that describes how much a customer brings to the company over the course of the entire customer life. This customer value does not only include past transactions. Also and especially current transactions and future purchases. Since the customer value comes from business administration, it can also be described as the coverage amount that the customer realizes during the customer relationship with the company. But what does this customer value bring to the company?

 

Break-even point

Calculate break-even points: When will you make a profit?

We explain how you can easily calculate break-even points and thus find out when your company can finally make a profit.

 

The key is to optimize marketing campaigns for customer loyalty. As an important KPI, customer value helps ensure that campaigns can be better planned. Also, it helps cost structures to be designed more efficiently. This value clarifies what the benefits of systems are for maintaining customer relationships if the value is low, for example, you should also cut budgets for customer acquisition and support. With it, you can strengthen customer acquisitions, strengthen customer loyalty, control customer management, and ultimately increase the company's profits.