Do you know what factors contribute to the success of your company’s marketing efforts? Do you have any idea how well your company’s marketing is doing? Is there any indication as to why your business is doing well—or not so well?
Understanding what works and what doesn’t in marketing—also known as marketing’s Key Performance Indicators (KPI). It should be a critical aspect of your company’s growth strategy. If it isn’t, you should probably continue reading.
As a corporation operating in the twenty-first century, you should have a clear understanding of what makes your advertising activities successful. On the other hand, there should be no mystery as to why your company’s efforts are failing. All of your advertising efforts should be trackable. Also, there’s no excuse for not understanding why your company’s marketing efforts are failing or failing to compete.
What Is KPI In Marketing?
KPIs (Key Performance Indicators) are quantitative metrics that are used to assess the success of a marketing effort. They’re useful tools for making decisions and demonstrating the value of your investments. As a result, after creating and implementing a strategy, the last stage is to assess its effectiveness.
Furthermore, according to the KPI definition, tracking KPIs is essential for fine-tuning your advertising strategies. Indeed, using the correct KPIs allows you to not only assess the efficacy of your campaign efforts but also to implement your strategy over time.
Why Are Marketing KPIs Important?
Knowing the answer to the question “what is a KPI in marketing?” isn’t enough. You should also understand why KPIs are crucial.
KPIs are significant since they help you define:
- Where are you going? (What are your advertising aims and goals?)
- How do you get there (what do you need to do to achieve your objectives?)
- If you arrived at your destination (Did your efforts provide worthwhile results?)
- How can you improve your route next time (what can you do to get better results?)
It’s tough to design effective strategies and evaluate results without KPIs.
KPIs can help you show senior management and clients the worth of your marketing activities. Thus to highlight your outcomes and ROI, you can include KPIs in a business report template.
Choosing KPIs For Marketing
It is critical to select the best marketing KPIs that are appropriate for your company. Tracking the wrong KPIs will not produce actionable results and will be a major waste of time.
To select effective KPIs, you must first answer a few questions. What is my company’s core business? What outcomes do I need to achieve for my business to grow? Is it more important for me to sell more products to leads or subscriptions? All of this information can aid you in selecting effective KPIs that are appropriate for your company’s goals and surroundings.
Top KPIs for Marketing To Track
- Retention Of Customers
Customer retention is a metric that assesses how successful your company is at keeping customers over the long haul. According to the adage, attracting new consumers is more expensive than retaining existing customers. As a result, you’ll want to concentrate on this key performance indicator to improve your company’s reputation, customer service method, and overall client experience. Where are you losing repeat business during the pre-and post-sales process? Where can you make improvements?
- Marketing ROI
Return on investment, or ROI, is a metric for determining how much income an advertising campaign generates in comparison to the costs of executing the campaign. Hence the most crucial metric to track and evaluate is the return on investment.
This KPI is calculated by dividing the number of leads generated by the opportunity value, or your average value-per-win divided by your average lead-to-win ratio. While ROI is a significant and important KPI for your advertising, it can be difficult to calculate in some cases, such as when a lead views an ad but does not click, then visits your site later.
- Customer Acquisition Costs
The cost of each step needed in persuading a potential consumer to make a purchase is factored into the cost per customer acquisition. Cost per customer acquisition covers expenditures associated with the less apparent back-of-house stages such as research and advertising, in addition to the costs of the product itself. You can evaluate which channels are the most efficient for converting new customers by understanding how much each new customer costs you.
- Attribution Of Promotional Income
How much money has your company made thanks to your digital campaigns? What percentage of your revenue comes from content marketing?
Knowing how much revenue can be ascribed to digital marketing is crucial to determining the effectiveness of your efforts. No business wants to invest in something that does not yield a profit.
This is something you can track and attribute to all of your efforts, not just the ones you’re most proud of. You can see how simple things like blogging and social media, for example, had an impact on sales.
You can also measure revenue attribution using a variety of models. Also, you can include single-touch attribution models that look at your first or final encounter or multi-touch attribution models that divide transaction credit across many touchpoints.
When it comes to revenue attribution, you’re interested in how much of your income was influenced by the number of leads you closed.
- Revenue From Sales
This is a straightforward KPI that allows you to track your company’s progress in producing sales revenue. You can figure out your company’s growth trends and estimates using a variety of data factors. It’s useful from a top-down perspective, as you track your company’s overall progress, as well as on a more personal level, as you can use it to establish tailored goals for your team members. This is a fantastic approach to keep your company’s growth and, by extension, revenue going strong.
You may get a better sense of the health of your company by tracking the correct KPIs. You can observe the ROI provided by these two teams when you establish KPIs that correspond with your sales and methods.
- Customer Value Over Time (LTV)
Throughout your relationship, how much is your customer worth to you? Do you have any ideas?
The prospect of calculating how much your clients are worth to you may be intimidating, but there is no excuse for not knowing. This KPI is an excellent approach to assessing your company’s return on investment, as well as a useful tool for planning future business objectives. While not accurate, calculating a customer’s lifetime value entails adding up all of your average customer’s sales throughout your relationship.
- ROMI (Return On Marketing Investment)
The goal of ROMI calculation is to see if expenses contribute to earnings. If your campaigns bring in more money than you spend on them, you have a positive financial return on investment.
Knowing your campaigns’ ROMI can also help you figure out where you should spend your budget to obtain the best outcomes. If one of your campaigns provides a 15% return on promotional expenditure while the other generates a 70% return on advertising investment, it goes without saying that you will have to invest your most profitable budget in the future!
- The Ratio Of Website Traffic To Website Leads
This is a rather simple task. How many of the people that visit your website converts into leads? This KPI can be used to track two things:
- Website Visits
These are the people who come to your website. They are the potential clients who become potential leads. So why wouldn’t you be interested in learning more about them?
Finding out who your website visitors are, where they came from, and what they did after they arrived at your site is the first step in getting to know them. All of this data can assist you in determining one crucial piece of information: what they want from you. Thus knowing this allows you to anticipate your potential client’s demands, which is exactly what marketing is all about.
However, the term “website traffic” is perhaps too broad. The concept of website traffic encompasses a wide range of factors, many of which are highly quantitative and strongly linked to engagement. They are as follows:
- Sessions
- Users
- Views on the page
- Per Session Page
- Session Duration on Average
- Rate of Bounce
- Reach And Engagement On Social Media
Because it allows you to distribute content and communicate with current and future customers, your social media strategy is an important aspect of your inbound advertising efforts. But, didn’t you already know that?
Tracking your progress is a useful technique to judge this KPI (think followers on Twitter and Likes on Facebook). Both social networking networks have tracking and analysis built-in, making it relatively simple to obtain this data when needed. You may also monitor engagement by looking at data such as lead conversions, customer conversions, and the percentage of web traffic attributed to your social media activities. Remember that not all social media platforms will benefit your company, so keep track of the ones that are most important to you and your customers.
- Creating Inbound Links
Your SEO plan should include link building as a key component. When someone links to your website, it shows that you’re gaining credibility in your field. So the more people who connect to your site as an authority, the higher your search ranks will be and the more traffic you’ll get.
However, not all inbound links are beneficial. You want links from other trustworthy industry sources that are of high quality. Following connecting root domains are the name of the game here—you want links that Google truly follows (though there is also value in no-follow links).
Final Words: Learn & Use KPI Metrics
These aren’t measures that you should check once and then forget about.
On a weekly or monthly basis, you should keep track of these. Regularly tracking these figures will provide you with the information you need to improve your job performance, allowing you to pivot when a promotional strategy fails.
Thus to provide everyone on your sales and promotional team insight into how well your sales and marketing activities are going, make these metrics visible to them. Your team may achieve that aim by tracking, assessing, and improving those indicators.
These analytics can be used to have more in-depth discussions with your sales staff, which will help you uncover any gaps in your digital approach.
FAQ
What are some examples of marketing KPIs?
There are numerous marketing KPIs you could be tracking depending on your specific goals. Some of the most common ones include Cost per Acquisition (CPA), Customer Lifetime Value (CLV), and Return on Advertising Spend (ROAS).
Why is tracking marketing KPIs important?
Tracking marketing KPIs is crucial as they provide measurable and quantifiable metrics that can help you understand the effectiveness of your marketing strategies, guide decision making, and set future goals.
How frequently should I review my marketing KPIs?
The frequency of reviewing your marketing KPIs depends on the specific KPI and your marketing strategy. However, it’s commonly recommended to review them on a monthly basis to keep track of your performance and make necessary adjustments in a timely manner.