Your ultimate guide to setting KPIs for UGC campaigns
Knowing the difference between key performance indicators (KPIs) and metrics can be tricky. Many business managers and marketing professionals use the terms interchangeably, but they do have different meanings.
All KPIs are metrics but not all metrics are KPIs. There are countless of metrics but only a few of them are your KPIs. A metric can be for example clicks, page views, bounce rate, gross margin or sales revenue. Anything that is measurable is a metric.
However, a metric only becomes a KPI if it’s relevant to your business outcome. In other words, KPIs are the metrics that are most important to your business goals and objectives.
Do we need both metrics and KPIs?
The short answer is yes. KPIs, or key performance indicators, indicate performance and as the name implies they are a key to your business. You need KPIs to monitor how well your business is doing.
Having too many KPIs will cause confusion and a lack of direction, so it’s important to stick to only a few and to choose them wisely.
Why do you need metrics then, if the KPIs are the ones that matter? Because a metric can give an additional perspective or knowledge about a certain problem or trend. They can support your KPIs and help you achieve your business goals, and while they are not your main goal, they can still be relevant.
How to set up your KPIs
1.Identify your goals and list all the metrics that could be relevant in order to reach your goals.
2.Choose the most important metrics out of the list, these are your KPIs. The fewer the better.
3.Measure where you stand right now and what your minimum or average should be. Identify your most important competitors and try to benchmark your KPIs against theirs.
4.Establish a system to track your KPIs as well as changes over time. How your KPIs change over time will give you important information about trends and whether things are going in the right direction. For example, if CTR is your KPI, find out if it’s constant over time or if it decreases or increases.
In order to calculate ROI, you need to consider factors like:
- Content production costs
- Actual spend on paid social
- Value of your visual asset library
- Cost per click (CPC)
- Aggregated sales conversions from UGC
Option A: KPIs for UGC on site
User-generated content is not only for use in social media. When you embed customer photos and videos on your website, time on site often improves as well as the conversion rate.
There are several metrics that can be relevant when you want to measure how your UGC on site is performing. It all depends on your overall business objectives.
1. When engagement is your goal
Social media content is closely connected to engagement metrics. Why? Because social media is all about engagement and interactions.
Platforms like Instagram and Facebook use algorithms that reward content with high engagement by giving it more exposure and better reach. Most brands with any type of social media presence should have at least one engagement KPI.
- Time on site
- Bounce rate
- Click-through rate (CTR)
- Engagement rate (ER)
2. When conversions or bookings is your goal
For retailers and businesses in ecommerce, conversions are key to knowing if your website and marketing activities serve the right purpose and generate revenue.
- Conversion rate
- CTA click-through rate
- Average order value
- Shopping cart abandonment rate
- Revenue
Option B: KPIs for UGC in social media
When using UGC for your brand’s social media presence, engagement metrics are often used as KPIs. But naturally, you want conversions too. For certain campaigns, awareness can also be your objective. Awareness KPIs for social media can be metrics like reach or impressions.
It can be tempting to use both reach, mentions, engagement rate and conversions as KPIs, but having too many KPIs might lead to a lack of focus and direction. You can set campaign specific KPIs, but they should always be aligned with your overall business objectives.
1. When awareness is your goal
Awareness is often not the single objective for UGC in social media. This is because social media is based on interactions and engagement related KPIs are often the main focus along with conversion metrics. When you measure how well your brand is performing in terms of awareness, one of the following listed metrics can be your KPIs:
- Profile visits
- Follows
- Website visits
- Reach
- Impressions
2. When engagement is your goal
UGC is often discovered through hashtags and mentions. To measure the success of UGC in social media, you’ll probably want to track how often your brand is mentioned or how often your hashtag is used. Other KPIs could be engagement rate or specific metrics like interactions per 1,000 impressions.
These are some common KPIs for engagement goals:
- Hashtag frequency
- Mentions
- Interactions (likes, shares, comments)
- Reposts or retweets
- Engagement rate
Engagement rate can be calculated in several different ways. We’re listing some of the most common methods here down below.
Method 1:
Reach Engagement Rate (RER)To find out the engagement rate (ER) for a specific post, using this method, use this formula:
Reach Engagement Rate (RER, sometimes also abbreviated ERR) = (Engagements per post / Reach per post) x 100
This will give you the engagement rate for a specific post. However, to measure your long-term performance, it’s recommended to look at average figures too. To calculate the average engagement rate across several posts, use this formula:
Average RER = Total engagement rate / Total number of postsExample: Avg. RER = (3.5+4.5)/2 =4
If you want to calculate the average engagement rate for 2 posts, then first calculate the engagement rate per post. Let’s say it’s 3.5% and 4.5%. Then divide the sum by the total number of posts, in this case 2. In our example here it would be 4%.
Method 2:
ER by impressions Reach is the number of people that see your content. Impressions refer to how many times your content is exposed for your audience. ER by impressions is calculated like this:
ER by impressions = (Engagements per post / Impressions per post) x 100
To get an average rate, use this formula:
Avg. ER by impressions = Total ER by impressions / Total number of posts
Method 3:
ER by postsThis method doesn’t take into account that your reach can fluctuate. So if you want to base your engagement rate on how many people that actually see your content rather than your followers, this might not be the best method to use.
However, it can give you an idea of the quality of your follower base as it tells you how engaged your followers really are.
ER by post = (Engagements for a specific post / Total number of followers) x 100
And to calculate the average:
Avg. ER by posts = Total ER by post / Total number of posts
Method 4:
Daily ERIf you’re posting several times a day, tracking the daily ER will give you an idea of how your engagement is increasing or decreasing over time on a daily basis. To get a daily ER, use this formula:
Daily ER = (Total engagements in a day / Total number of followers) x 100
You can also calculate an average ER in the same manner as in the previous methods.
3. When conversions or bookings is your goal
Social media is not just for engagement. With great UGC you can also improve your conversion rates through social media. Instagram is a platform often used to drive conversions through UGC. These are some metrics you can use as KPIs:
- Promotion code use
- Referral URLs
- Traffic to product pages
Summary
There are many ways to track performance in social media, but not all of them are relevant for UGC marketing. UGC marketing is both about engagement, awareness and driving sales. Choose a combination of KPIs that support your overall business and marketing goals.
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