How to set clear goals & KPIs

Want to make smarter choices that grow your business faster and more profitably?

Start by setting clear goals, then track the right numbers to measure your progress. This is the key to data-driven decisions that get results.

Step 1. Set clear goals

Start with the end in mind. Set clear goals for your business, so you know what you and your team are working towards. Here’s how:

Set SMART goals

To increase the chances of achieving your goals, make them SMART: Specific, Measurable, Achievable, Relevant, and Time-bound.

For example, instead of “increase sales,” say “increase sales of Product X by 15% in the next quarter by launching a search ad campaign.”

Set a 3-year revenue target

It’s crucial that we take a moment to think about what success looks like.

Where do you want to be in 3 years in terms of revenue? Is it $1 million, $10 million, or more? Whatever your number is, there needs to be a number so you can work towards it.

Why 3 years? It’s a long enough timeframe to aim for big wins, but short enough to stay focused.

For example, if you’re making $3M now, aiming for $10M in 3 years means growing at 50% (or 1.5X) each year. However, if you’re making $370K now, achieving $10M in 3 years means growing by 3X each year.

The 3-year goal can be made more actionable by breaking it down into yearly, monthly, and weekly milestones.

Set a bigger goal beyond money

Money’s great, but it should be the by-product of a big vision that keeps you going.

A strong vision also attracts talent and helps customers connect with your brand, getting you ahead of competition.

For us, it’s about helping businesses achieve big goals with data. One of our customers wants to make production greener through 3D printing. Another is helping older women with health needs.

What’s your vision?

Action time!

1. Write down your 3-year revenue goal and break it down into yearly milestones.
2. Describe your big vision in one sentence without jargon.

2. Break down goals into KPIs

Goals are big numbers. Key Performance Indicators (KPIs) are smaller numbers that show if you’re on the right track to reach your goals. Here’s how to identify your most important KPIs.

The 7 essential business KPIs

Most businesses can track their health with these 7 KPIs:

1. Visitors: How many people visit your site or app?
2. Acquisition: How many show interest?
3. Activation: How many complete an important task?
4. Revenue: How many make a purchase?
5. Retention: How many return to buy again?
6. Referral: How many tell others about you?
7. Profit: How much money do you keep after costs?

Match KPIs to your business

Businesses might use different names for these KPIs.

It depends on their “customer journey” (also called “user journey”), which is the steps people take on their website or app while interacting with their business.

Here are some real-life customer journey examples:

• Ecommerce store: Visitors view an item (Acquisition), Add items to cart (Activation), Buy (Revenue), Buy again (Retention), and write an review (Referral).
• B2B or professional services website: Visitors fill a lead form (Acquisition) → Attend a sales call (Activation) → Buy (Revenue) → Buy another product or service (Retention) → Write a review or testimonial (Referral)
• SaaS/subscription app: Visitors sign up for a trial (Acquisition) → Complete onboarding (Activation) → Upgrade (Revenue) → Renew (Retention) → Write a review (Referral)
• Marketplace site or app: On the demand side, Customers visit the site → View item (Acquisition) → Buy (Revenue). On the supply side, Partners visit a different part of the site → Sign up (Acquisition) → Provide item or service (Activation) → Pay commission when customers buy (Revenue)

Customer journeys can vary depending on the business model. For example, here are some customer journey variations:

• Purely online (like SaaS apps): Everything happens online.
• Online + offline (like ecommerce websites): Find online, buy online, receive offline, write a review online.
• Web + mobile (like car-sharing apps): Find online, use on mobile, get support on phone, go back online to write a review.
• Multiple customer types (like marketplaces): Different journeys for individuals and businesses.

What are your 7 main KPIs? Think about the steps people take on your website before and after becoming customers. What pages, screens, or emails do they see? Do some parts of the journey happen offline (like visiting a store or receiving a product in the mail)?

Action time!

1. Sketch your customer journey.
2. What are your 7 main KPIs?

3. Turn KPIs into actionable metrics

You’ve defined your goals and KPIs to track your progress. Now, turn those KPIs into real metrics you measure and change in a data tool like Google Analytics 4 (GA4). To do this, we’ll use a nifty little tool called a “Goal Tree”.

Use a Goal Tree

Build a goal tree to break down big KPIs into the smaller, actionable metrics you’ll track directly in GA4. Start with your main goal (Revenue, Profit, etc.) and drill down until you see the levers you can change.

Example 1: Ecommerce goal tree

Imagine your online store’s monthly revenue is $370k and your goal is to double it within 6 months. How would you go about doing that?

You can’t touch change revenue directly, so the first step is to break it down into 3 KPIs.

Revenue = Customers x Purchase frequency x Average spend

A goal tree is an easy way to visualise how this works.

“Customers” is the number people who bought, and this can be further broken down into “Traffic” (people who visited your website or app) and “Conversion” (% of visitors who bought).

“Traffic” consists of visitors from search, social, email, etc. Break down traffic source further into organic and paid.

Likewise, split “Conversion rate” into conversion rates of smaller steps users take (like viewing an item or adding it to cart) towards the bigger conversion (like a purchase).

“Repurchase rate” (also called “Repeat purchase rate”) is the average orders per customer. For example, if in [current_date format=”M”], your web shop received 1,200 orders from 1,000 customers, then your Repurchase rate for [current_date format=”M”] is 1,200 / 1,000 = 1.2. This can be further broken down into % of repeat buyers and orders made by each repeat buyer.

Average Order Value (or AOV, also called “basket size”) is the average amount spent per order. For example, if in [current_date format=”M”], your ecommerce shop generated $370k from 3,700 orders, then your AOV is $370k / 3,700 = $100. This can be further broken down by the price of each item and quantity bought.

Now, it’s possible to take action. For example, better SEO and Google Ads campaigns would attract more visitors, which increases traffic, which increases revenue.

Example 2: SaaS goal tree

Goal trees vary by the type of business. If you’re selling a web or mobile app through subscriptions (also called Software-as-a-Service or “SaaS”), you’re after a special type of revenue called Net Recurring Revenue (NRR).

Here’s how you would break down NRR into components:

Again, we’re breaking down goals into higher-level KPIs, and then into lower-level metrics that we can directly influence. For example, we could increase Visitors through email marketing, or improve Conversion by optimising the free trial form, and both would result in higher revenue.

Example 3: Goal tree for a B2B lead gen website

Let’s take a look at one more example, this time for a very popular type of website. If you’re a business that sells to other businesses (B2B), then you likely have a Sales team that relies on the Marketing team to generate a good number of high-quality leads that they then convert into paying customers.

Here’s how one would calculate Revenue for a B2B business:

Revenue = Visitors x Conversion rate x Purchase frequency x Average deal size

The goal tree would look like this:

Here, Conversion rate could be further split into Visitor-to-lead conversion rate (usually after visitors submit a lead form) and Lead-to-customer conversion rate (after they actually purchase something).

Customise for your business

Adapt the goal tree to fit your business model. Here’s how different businesses might do their goal trees.

For example, a B2B site turns visitors into leads for the Sales team. Therefore, Revenue = Visitors x Lead conversion rate x Customer conversion rate x Average deal size.

Likewise, a SaaS app gets visitors to sign up for a trial, then upgrade to a paid subscription. So the KPIs are Growth (measured by “Net New Revenue”) and Profitability (measured by the “Customer Lifetime Value / Customer Acquisition Cost” ratio).

The goal tree approach is simple yet powerful, because it helps you prioritise actions that achieve goals and avoid actions that don’t.

Action time!

1. Create a basic goal tree for your business. Don’t worry about perfection yet, just map out the main steps. Start with Revenue (or Profit), and drill down to smaller metrics.
2. For each number, write down its current value if you know it. If you don’t know it, just leave it blank. We’ll show you how to find the current value shortly!

Analyse traffic and conversions

Traffic and conversion drive your key metrics. GA4 reveals the specific actions you can take to improve them.

How to analyse traffic

In GA4, you can see where visitors come from, like search, social, email, etc.

For example, say you’re getting 30k monthly visitors. Of those, 40% may come from search (like Google Ads and organic search), 30% from social (like LinkedIn or Instagram), and 10% from email (like newsletters).

GA4 also shows you which channels bring in customers who spend the most. Focus your efforts on those winners to boost overall traffic and revenue.

How to analyse conversions

Map out each step users take towards a conversion and see where people drop off.

For example, ecommerce store users view an item, add it to cart, and complete checkout on way to buying an item. GA4 reveals if how many people are taking (or not taking) those steps.

If only 3% of your web shop visitors are buying, this could be because 25% of visitors view an item, of whom 30% add to cart, of whom 40% complete checkout (because 25% x 30% x 40% = 3%). Improving the add-to-cart or checkout experience would boost your revenue by a lot.

You can use a goal tree to visualise these steps and track them in a GA4 funnel report. This technique is used by fast growing tech companies and is likely to deliver results for your business too.

Action time!

1. List your traffic sources (all the ways people find you).
2. Map your conversion steps. Keep it simple; sketch out the typical path to a conversion.

Use the power of small changes

Small tweaks can lead to big growth.

For example, say an online store making $1 million per year wants to double its revenue within 12 months. With GA4, they find they’re getting 30k visitors per month. 900 of them buy, spending $85 each time.

They could try doubling visitors (expensive) or doubling prices (might lose too many customers). But there’s a smarter way…

The power of 19

If you remember, Revenue = Traffic x Conversion rate x Purchase frequency x Average Order Value (AOV).

[Visual: Diagram showing how boosting 4 KPI by 19% doubles revenue]

Therefore, boosting Traffic, Conversion, Frequency, and AOV by just 19% each doubles their Revenue (because 1.19 x 1.19 x 1.19 x 1.19 = 2). This grows Profit too, as they’re not solely relying on expensive new customers.

The power of 26

Want an even bigger Profit boost? Focus on Conversion, Frequency, and AOV.

[Visual: Diagram showing how boosting 3 KPI by 26% doubles revenue]

Increasing those by 26% each also doubles revenue (because 1.26 x 1.26 x 1.26 = 2). You make more from existing customers, maximising your ROI.

Keeping it real: Some metrics are harder to change than others. If increasing Purchase Frequency by 26% feels unrealistic, you can still achieve the same result with a lower Frequency (like 20%), but a higher conversion and AOV (like 30% each).

Take action!

1. What ONE small change can you make today to improve a key metrics?
2. Will the improvement impact a high-level goal like Revenue or Profit? If yes, by how much?

Now that you know your goals and KPIs, the next step is to find the current values of your KPIs in a data tool like Google Analytics 4 (GA4), so you know how your business is currently doing.

Once you’ve done that, you’ll be ready to take actions that maximise your business outcomes while minimising time, cost, and effort.