One Kpi – Many Calculations
Management Summary
Not all KPIs are the same – discover how calculation logic influences your decisions and what really matters.
This is how it works: work well with KPIs
The path to informed, data-based decisions begins with three essential steps:
1.
You know your goals
You know the KPIs to measure these goals
2.
How are these KPIs calculated?
How are the metrics collected for this?
3.
Interpret data
& Understanding data
From goal to metric: Why KPIs are more than just numbers
What should be achieved – and how can this be measured? This question is at the beginning of every good analysis. Ideally, you formulate your goal according to theSMART method. You then derive suitable KPIs from this.
Examples of goals and associated KPIs:
- Increase engagement:Video views, viewtime, likes & Shares…
- Generate leads:Completed contact forms, newsletter registrations…
One KPI – many calculations: That’s how relative “the” number is
How can a single KPI – e.g. B. theSwipe ratein the online shop – deliver completely different values? Quite simply: it dependsdefinitionto. Which metrics are used? How exactly are they collected? And what is the formula?What does swipe even mean?Swipe describes the wiping movement, e.g. B. on the smartphone. In online shops, this means browsing through product images – an important interaction that can provide information about interest in a product.
Example swipe rate – what do you have to pay attention to?
- Do you relate?all page viewsone or only those where a swipepossibleorexecutedbecame?
- Do you analyze perusers, persessionor perPage?
Example calculation variants:
- Variant 1: All swipes / all page views
- Variant 2: All swipes / only page views with swipe function
- Variant 3: Unique Swipes (1 swipe per product & user) / pages with swipe function
- Variant 4: Unique swipes / page views with swipe function
- Variant 5: All swipes / pages on which a swipe was carried out
Which variant makes sense depends on the goal and the general conditions:
Although variant 1 is less precise, it is often available more quickly and is easier to collect – useful for standardized comparisons (e.g. country comparisons).
If the swipe function is not available on all pages, it may make sense to use “only page views with swipe function” for the calculation. This means that only relevant page views are taken into account.
If the number of images per product differs significantly, the metric can be distorted – unique swipes can help here.
If “pages on which a swipe was carried out” is used as a metric for the calculation, the number is always >=1. This is important and must be taken into account when interpreting the number.Important: The KPI is not wrong –but it must be understood and interpreted in the correct context. Comparing different calculations without disclosing this quickly leads to incorrect conclusions.
More examples
The following examples will show you how different KPIs can be calculated – and why it is so important to know exactly which metrics are collected and how. Here are a few food for thought:
CTR (Click Trough Rate)
Calculation:Clicks/ImpressionsorClicks / Unique Impressions
But when does an impression actually count? Is it enough for 1% of the banner to be visible – or does it have to be 50% or even 100%? Details like this are crucial when comparing CTRs. So make surehow impressions were measuredand whether the same fundamentals apply.
ROAS (Return on Ad Spends)
Calculation:Sales/advertising expensesor(Sales – cost of goods) / advertising expenses
A common stumbling block:Gross or net sales?While platforms like Meta often calculate with gross sales, controlling often uses net values. When comparing ROAS, make sure youon the same databasestay.
CR (Conversion Rate)
Calculation:Conversions / VisitorsorConversions/Sessions
And what actually counts as a conversion? Shopping? A registration? An add-to-cart? You should define this clearly – and communicate it openly. This is the only way to ensure thateveryone in the team thinks the same thingwhen they talk about conversion rate.
What you can learn from all of this
Key Takeaways:
- KPIs must be understood in the context of the goals.
- There is no one correct calculation method.
- Interpretation is crucial.
- Data should not be viewed in isolation.
- Comparison only with the same understanding and the same basis!
Conclusion
A KPI alone says little – the context says everything. That’s why, as an analyst or decision-maker, you should always questionhow metrics are collected and KPIs are calculated. Only then do they become real tools for informed decisions.
Knowing your numbers is not just a sign of competence – they are your basis for strategic action. If you really understand KPIs, you can specifically support decisions, uncover errors in interpretation and derive measures that bring you closer to your goals.
