KPI Tree

Description

The purpose of the KPI Tree Template is to identify the specific Key Performance Indicators (KPIs) that you will use to evaluate your performance in relation to a strategic goal. KPI Trees are developed by marketing teams to ensure that there is alignment between strategic goals (what you ultimately want to achieve) and tactical metrics (what you will measure if you achieve it). To complete a KPI Tree, you need to complete your marketing strategy first. A completed KPI Tree ultimately visually explains your strategic approach and provides the basis for creating a detailed measurement plan – on a single page.

Questions

The KPI Tree Template helps to answer marketing questions like:

  • What is the overall strategic goal for our marketing initiative?

  • How does this tactic ladder up to our overall strategic goal?

  • What will we measure to understand if we are successful?

KPI Tree

Steps

  1. Identify the single strategic objective that you need to accomplish. This is the ‘why’ that underlies your marketing initiative. If you have more than one objective, you need more than one KPI tree.

  2. Determine a set of strategic levers that you will use to achieve your objective. This is the ‘what’ you will do as part of your marketing strategy. Ensure that these are mutually exclusive from each other.

  3. Identify the individual tactics that you will execute to support your strategy. This is the ‘how’ you will execute your marketing initiative. Capture and describe all tactics with the same level of detail.

  4. Identify the KPIs that demonstrate how well each tactic supports a strategic lever, and ultimately your strategic objective. Capture only those KPIs you will use to make decisions and manage your initiative.

  5. Determine if there are any significant relationships among your KPIs. For example, a single KPI may be used to measure multiple tactics or different KPIs may be in conflict with each other. Record these relationships.

Considerations

  • Ensure that your KPIs are simple, relevant, actionable, measurable, and timely.

  • Consider assigning weights to KPIs to reflect the relative contribution of the tactic(s) they measure.

  • Update your KPI Tree when your marketing strategy or your measurement capabilities change.

References

Parmenter, D. “Key Performance Indicators. Developing, Implementing, and Using KPIs”, Wiley, 2019.