KPI (Key Performance Indicator)

Quantifiable, actionable metrics used to evaluate the performance of an organization, product or action in relation to its strategic objectives. KPIs are used to drive results, prioritize efforts, and make data-driven decisions, whether in marketing, product, finance or operations.

A good KPI is :

• Aligned with business objectives,
• Specific, measurable, achievable, relevant and time-bound (SMART),
• Understandable by all stakeholders,
• And followed up at regular intervals to enable continuous optimization.

KPI challenges in a CRO approach :

In aconversion rate optimization strategy, the choice of KPI is central, as it :

• defines the success of a test or experiment,
• determines the duration of the A/B test, via its influence on the Minimum Detectable Effect (MDE),
• guides the measurement and analysis strategy (quantitative, qualitative or hybrid).

Leading vs Lagging KPIs :

• Leading KPI: Indicator upstream of the user journey, which reacts quickly to a variation.
  Ex.: click on a CTA, add to cart, start filling out a form.
  ➤ Advantage: observable on a larger volume, therefore reduces test time.
  ➤ Limitation: does not guarantee an impact on the final conversion.
• Lagging KPI: Final or macro indicator, directly linked to the business objective.
  Ex.: final purchase, form completion, subscription.
  ➤ Advantage: measures real business value, but requires more data to reach significance.

Best practices :

• Always align the main test KPI with the site's strategic objective (e.g. sales, leads, retention),
• When using a leading KPI as a primary objective (e.g. click-through rate), it's advisable to track a lagging KPI as a secondary objective, to ensure that the intermediate optimization leads to the final impact.

Examples:

• E-commerce website
  • Leading KPI: add-to-cart rate
  • Lagging KPI: final order rate
• SaaS site
  • Leading KPI: click on "Request a demo".
  • Lagging KPI: paid plan subscription rate

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