KPI exposed: The official how to guide for KPI (Part II)

KPI exposed: The official how to guide for KPI (Part II)

by Gabriel Touchette / Thursday, 21 November 2013 / Published in Measure & Optimize

Welcome back everyone for the second article of this series of three. If you haven’t read the first part yet, I encourage you to do so. Today we will discuss how to categorize your business questions using the REAN model. I will also provide KPI that best suits each step of your conversion process. Not only will we cover that but we are also going to expose you the different categories of website that exist based on their primary motive and will again propose KPI that are specific to each of them.

Categorizing Business QuestionsTurning questions into smart KPI using REAN model

After having made a comprehensive analysis of what KPIs are in the previous article you may have studied your business plan, and have come up with many questions regarding your objectives. It’s now time to shift our attention on categorizing those business questions.

Categorizing questions or elements that we want to pay more attention to can quickly become a tricky business. This is why we will use the REAN structure. We owe this methodology to Mr. Xavier Blanc, who developed it in 2006.  It has since then, been used by many companies like Nokia who presented its version at the eMetrics summit of 2008. Steve Jackson further developed it in his book Cult of Analytics who used it solely for web analytics.



Lets start by explaining the REAN approach before going any further. The REAN is an approach that enables you to track your conversion efforts. I will explain each letter and what they mean and give examples of business questions that would fall in each category. Finally, I will provide KPIs that best suits each step of the REAN approach. Most of the following examples and definitions were taken from Steven Jackson’s book Cult of Analytic. A must have.


The R stands for reach. Which method are you using in order to attract prospective clients? In a web environment, web marketers often use various strategies such as PPC, backlinks, inbound marketing, e-mailing and others.

Now, what kind of business questions would fall in this category? Well any questions such as how do visitors find my website, what is the best source of traffic for my site cost wise and what kind of segment visits my site.

Proposed KPIs for your reach:

-Visitor volume ratio per referrer (VVR)

It shows you the best traffic sources across every single channel you work with.

Formula: Number of visitors per traffic source / Total number of visitors

-Cost per referred visit (CPRV)

It shows the best traffic sources in term of cost per visit.

Formula: Total marketing cost per referring source / Total number of visits per referring source

-Content/visit ratio per referrer (CVR)

Shows the best traffic sources in terms of content consumed across your top methods to attract.

Formula: Number of visits per traffic source / Number of visits per content groups



The E stands for engage. This is how your visitors interact with your site. What are they doing on your site?  Questions like what are the top paths through the site, engagement rate of visitors, number of failed search are all indication of the engagement process.

Proposed KPIs for your engagement:

-Bounce rate

Gives you the percentage of visitors of your website who quit your page after viewing only one page. They arrive on your page but navigate away without further action.

Formula: Page views / Number single page visits per page

-Shopping cart abandonment rate (SCAR)

This is a direct indicator of the performance of your shopping cart.

Formula: Number of successful purchases / Total number of visits to shopping cart



The A stands for activate.  This is basically the second level of action from the client. It involves more efforts and shows more consideration for your brand from the user. How many sales did we make, the number of e-books downloaded, the number of subscribers to our newsletter are all concrete actions made by your users that generally occurs further in the conversion funnel, those are micro or macro conversions.

Proposed KPIs for your activation:

-Conversion rate

Tells you how many visits performed the desired outcome per 100 visits. A conversion can be a micro conversion (conversion of smaller value but still worth mentioning) or a macro conversion.

Formula: Number of confirmed conversions / Total number of visits

-Cost per acquisition (CPA)

Shows the cost of obtaining one conversion.

Formula: Total cost of referring source / Number of confirmed conversions



The N stands for nurture. It represents all the mechanisms that you use to retain and re-engage with your customers AFTER a micro or actual conversion. So anything like your newsletter reads, post-conversion survey will fall in this category.

Proposed KPIs for your nurturing:

-Repeat visitor Index

Shows the number of visitors that return to your site after a given amount of time.

Formula: Number of returning visitors / Number of visitor

-Email open rate

Formula: Total email opened / Total visitors to email service

REAN model with proposed KPI

With all these KPIs, you will be able to build your own SMART dashboard using the REAN methodology. It should give you a good edge.


Different types of websites Various type of websites that uses different KPIs


Now as some of you might have already pointed out, it is not all of the websites that have the same goals or objectives.  In fact there are four broads categories of websites:

–       Ecommerce sites;

–       Content generation sites;

–       Lead generation sites;

–       Self-Serve sites.


Ecommerce sites


Ecommerce sites are any sites that offer pre-sale support, products for sale or after sale support. Ecommerce sites have the core objective of generating online sales while reducing the marketing expenses to a minimum. Which type of KPIs should you focus on if you are operating an e-commerce site?

Any KPI concerning sales, returns and costs will be valuable for you. Here are a few KPIs that you will want to look for:


-Cost per visits;

-Conversion rate.


Content generation sites

The heart and soul of inbound marketing, content generation websites aim at attracting visitors with the unique content they create. But what are their core objectives? They aim at increasing the number of readers, the level of interest of their audience and time spent on their site. Here are some KPIs you don’t want to miss if you are managing a content website:

-Average time spent on site

-Average number of pages view per visit

-Organic traffic


Lead generation sites

Those are the sites that aim at increasing brand loyalty and ultimately, generating sales. Their core function is to increase and segment their leads.

-Ebook downloads

-Average time spent on site

-Newsletter subscription

-Contact page bounce rate


Self-Serve sites

Those sites aim at assisting clients through Q&A, FAQ and other self-serve mechanisms. Their core value is to increase customer’s satisfaction while decreasing the necessary time for the customer to obtain answers.

-Average time spent on site (unlike the other sites, they want it to be the lowest possible)

-Customer’s satisfaction

-Any measure of contact caused by the website to other support service (phone, store)

In conclusion, there are many ways you can build your own dashboard using the KPIs that suits your company. However, using the REAN approach, will enable you to have a dashboard that is complete, but more importantly, meaningful for you and your team. As stated in the first article, the first source of failure in dashboard implementation is the lack of understanding of the selected metrics. As shown above, the importance of the metric varies greatly depending on the type of website that you are using. Make sure to keep that in mind when researching your KPIs.

The next article will suggest a list of the most popular KPIs that will be explained and contextualized. Stay tuned


KPI exposed: how to guide for KPI part III

KPI exposed: how to guide for KPI part III


Cult of Analytics by Steve Jackson. Book available here

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Gabriel Touchette, Ludis Media
Gabriel Touchette est diplômé de l’Université Bishop’s. Étudiant sérieux, il s’est inscrit avec succès dans une double concentration, soit en entrepreneurship et en marketing (BBA, 2012). De plus, il a reçu un diplôme de l’Université de Sherbrooke en maîtrise en commerce électronique (M.Sc, 2013). Entrepreneur dans l’âme, en 2013, il fonde, une des plus grandes communautés Web dédiées à la pêche au Québec. Directeur marketing chez Ludis Media, Gabriel est passionné de stratégies Web. Tellement mordu par son métier qu’il demeure à l’affût de toutes les nouvelles tendances marketing, et ce, dès leur création.

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