Have you ever stopped to consider why your company’s marketing tactics work? Do you know the effectiveness of your marketing budgets and how they are performing? Have you noticed any trends in your company’s performance? Do you have any idea why your firm is doing well—or not so well?
The importance of identifying what’s working and what isn’t in marketing—also known as your company’s Key Performance Indicators (KPI) – should not be understated. Keep reading to learn about the KPI’s you should be tracking.
As a company operating in the 21st century, there should be no confusion about what is contributing to your marketing’s success. On the other hand, there should be no mystery as to why your marketing efforts are failing. Every aspect of your marketing spend should be capable of being quantified. There’s no excuse for not understanding why your company’s marketing efforts are struggling or failing to keep up with the competition. It’s time to start investing some of your time in learning about your firm’s marketing KPIs. Let’s stop procrastinating and start executing!
There are so many marketing and SEO KPIs available today—all of which, most likely, could be useful to your company’s marketing efforts. Chances are, if you do a quick search for “marketing KPIs,” you’ll come up with a variety of information that will help you enhance your marketing plan. However, not all of them are useful. For example, you won’t find any KPIs related to old-fashioned metrics like circulation on the following KPI list of marketing KPIs to measure in your overall marketing strategy.
Here are the Marketing KPIs you Need to Track When Analyzing Marketing ROI.
1. Sales Growth
Sales growth in relation to Key Performance Indicators (KPIs) is a crucial aspect of assessing and managing the performance of a business or organization. KPIs are quantifiable metrics that help measure various aspects of a company’s operations, and they play a significant role in tracking and evaluating sales. Here’s our explanation of how sales and KPIs are interconnected:
Key Performance Indicators, or KPIs, are specific metrics used by businesses to gauge their performance in various areas. Sales growth is one of the most critical areas of focus for many organizations, as it directly affects revenue and profitability. To understand how growth relates to KPIs, it’s essential to consider the following points:
Revenue and Sales Metrics: Sales growth is often measured using revenue-related KPIs, such as year-over-year (YoY) revenue growth, quarter-over-quarter (QoQ) growth, or monthly revenue growth. These metrics provide a clear picture of how sales are progressing over time.
Customer Acquisition and Retention: KPIs related to customer acquisition and retention are closely linked to revenue growth. Metrics like customer acquisition cost (CAC), customer lifetime value (CLV), and customer churn rate help businesses understand their ability to acquire new customers and retain existing ones, directly impacting sales.
Sales Funnel Performance: Monitoring the sales funnel is crucial for optimizing growth in sales. KPIs like conversion rates at each stage of the sales funnel (e.g., lead to opportunity, opportunity to sale) provide insights into the efficiency of the sales process and where improvements can be made.
Product and Pricing Strategy: KPIs related to product performance and pricing, such as average order value (AOV) and gross margin, impact the overall revenue growth These metrics help businesses make informed decisions about product offerings and pricing strategies.
Sales Team Performance: Assessing the performance of your sales team is essential for achieving growth KPIs like sales quota attainment, sales cycle length, and customer satisfaction scores provide valuable insights into the effectiveness of the sales force.
Market and Competitor Analysis: Monitoring market trends and assessing competitor performance through KPIs such as market share and competitive benchmarking can inform sales strategies and identify growth opportunities.
Remember, you’re in this together. Don’t be afraid to discuss your sales revenue with your employees. This generally promotes a sense of ownership among your staff and emphasizes the fact that everyone is striving for the same ultimate objectives.
It’s simple. The more leads you acquire, the more sales possibilities you have, and the greater your chances of increasing revenue. Leads are similar to gasoline in an automobile—they’re what power the marketing and sales team.
How are leads and KPIs interconnected and why you should be tracking them?
Leads are individuals or entities that have shown interest in a product or service offered by a business but have not yet made a purchase. Managing and nurturing leads effectively is crucial for businesses to convert them into paying customers. Key Performance Indicators, or KPIs, play a significant role in assessing and enhancing the lead management process. Here are some key points to consider when tracking leads:
Lead Generation KPIs: Lead generation is the process of attracting potential customers. KPIs related to lead generation include metrics like the number of leads generated, lead source effectiveness, and cost per lead. These KPIs help businesses evaluate the efficiency of their marketing efforts in bringing in new leads.
Lead Quality: Not all leads are equal in terms of their potential to convert into customers. KPIs like lead quality score or lead scoring models assess the quality of leads based on factors such as demographics, behavior, and engagement level. This helps businesses prioritize and focus their resources on leads with the highest conversion potential.
Conversion Rates: Conversion KPIs measure the success of lead nurturing efforts in turning leads into customers. Common conversion KPIs include lead-to-customer conversion rate, lead-to-opportunity conversion rate, and conversion rates at various stages of the sales funnel. These metrics highlight the effectiveness of the sales and marketing strategies.
Sales Velocity: Sales velocity KPIs assess how quickly leads move through the sales funnel. Metrics like the average time to close a deal or the average number of touchpoints required to convert a lead provide insights into the efficiency of the sales process.
Lead Nurturing Metrics: KPIs related to lead nurturing efforts, such as email open rates, click-through rates, and engagement scores, help businesses evaluate the effectiveness of their communication and relationship-building with leads.
ROI and Revenue Attribution: Ultimately, the goal of generating and managing leads is to drive revenue. KPIs related to revenue attribution, such as marketing ROI and customer lifetime value (CLV), connect lead generation efforts to the financial performance of the business.
As you can see, leads and KPIs are closely intertwined in the sales and marketing process. KPIs provide the data and insights needed to assess the effectiveness of lead generation, lead nurturing, and conversion efforts. By tracking and analyzing relevant KPIs, your businesses can refine strategies in place, allocate resources efficiently, and improve overall lead management process to achieve better results in terms of customer acquisition and revenue generation.
The thing to remember, is that all leads are created equal. Make sure you understand the difference between Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). The same lead might go through multiple lifecycle phases during the course of conversion.
Marketing Qualified Lead (MQL):
An MQL is a lead that has been determined to be more likely to become a customer than other leads based on lead intelligence. Marketing-ready leads are those who have raised their hands (e.g., by downloading an eBook or whitepaper) and identified themselves as more engaged and sales-ready contacts than your normal leads, but have not yet become fully-fledged.
Sales Qualified Lead (SQL):
A SQL is one that your sales team has rated as amenable to a direct sales follow-up. SQLs have had much more validation and imply a prospect that is ready to make a decision.
Understanding the synergy between MQLs and SQLs is critical for determining your company’s Leads to Close ratio, which is the number of leads you’ve received over a given time period divided by the total amount of leads you’ve closed.
3. Cost of Customer Acquisition (COCA)
The Cost of Customer Acquisition is a fundamental metric used by businesses to evaluate the effectiveness and efficiency of their marketing and sales efforts in acquiring new customers. It represents the total expense incurred by a company to acquire a single customer. Basically, its the money it takes to persuade a potential customer to buy your company’s goods or services. For example, let’s say you spent $400,000 on sales and marketing in a month and closed 30 new customers that month, then your cost of customer acquisition, or COCA, would be $13,333.
Mathematically, the formula for COCA is:
COCA = Total Customer Acquisition Costs / Number of New Customers Acquired
The COCA is a critical metric for several reasons:
Performance Evaluation: helps businesses assess the efficiency of their customer acquisition strategies. A lower COCA indicates that a company is acquiring customers at a lower cost, which is generally considered more efficient.
Profitability: Knowing the COCA allows businesses to determine whether the revenue generated from acquired customers justifies the acquisition costs. It helps in understanding the potential profitability of customer segments.
Budget Allocation: COCA data helps in allocating marketing and sales budgets more effectively. By understanding which channels or campaigns have a lower COCA, businesses can allocate more resources to the most cost-effective strategies.
Scaling Strategies: Businesses can use COCA insights to make informed decisions about scaling their operations. Lowering CAC can be a key driver for expanding customer acquisition efforts.
Benchmarking: Comparing COCA to industry averages or competitors’ COCA can provide valuable insights into a company’s competitive position and efficiency.
4. Website Traffic to Website Lead Ratio
This is pretty straightforward. Of all your website visitors, how many of them convert and become leads? This KPI for website traffic helps measure two things:
The quality of your website’s traffic
The conversion rate of your website
What is important here is to get a baseline, what is this ratio currently? And what can you do to improve it? Many times, focusing on improving the website’s conversion rate is an easy way to improve this ratio.
5. Website Lead to Marketing Qualified Lead (MQL) Ratio
Of the website leads generated, how many are promoted to MQL status? This statistic will help you assess the quality of your marketing leads. Do you have a poor conversion rate, with few of your leads ever becoming marketing qualified? If you do, it’s probably time to check the quality of your website traffic.
6. Web Traffic
These are the people who come to your website. They are the potential consumers that may develop into actual buyers.
Knowing who your website’s visitors are, where they’re from, and what they do once they get there is crucial for optimizing your site. All of this data (via Google Analytics, can help you figure out one key factor: what they want from you. Knowing this can help you anticipate your customers’ needs, which is what marketing is all about.
However, using the phrase “Website traffic” may be too broad. Website traffic is made up of many elements which can be due to social media marketing, campaigns, email campaigns, search engine optimization and more, all of which are highly measurable KPI’s to track and strongly linked to interaction. KPI examples of website traffic can include:
Pages per Session
Average Session Duration
Bounce Rate (the percentage of visitors that leave a webpage without taking an action, such as clicking on a link or filling out a form)
7. Social Media Reach and Engagement
Your social media presence is crucial to your inbound marketing campaign and to increase brand awareness because it allows you to share your material and engage with existing and potential consumers.
A good way to judge the social media reach and engagement KPI is to monitor growth (think new followers on Twitter and new “Likes” on Facebook). Both social platforms provide built-in tracking and analysis, making it simple to obtain this data whenever necessary. Through metrics that measure lead conversions, customer conversions, and web traffic linked to your social media efforts, you can also keep track of engagement. Remember that not all social media platforms are appropriate for every company, so be sure to keep track of the ones that count the most to your business objectives.
8. Email Marketing Performance
Aside from social media, your email marketing strategy is your main line of communication with your customer or lead. All email marketing campaigns should be assessed, analyzed, and evaluated repeatedly against total marketing channels.
Tracking the performance of your email marketing plan may be complex vs different marketing channels, and may necessitate its own set of KPIs to be analyzed individually. Examples of top marketing email KPI’s include:
9. Inbound Links (Backlinks)
Link building should be one of the main components of any SEO campaign. When someone links to your website, it indicates that you are establishing authority in your field of business. Think of it as a “thumbs up” for your website when another site links to one of your web pages. The more people that link to your website as an authority, the better your search rankings and the greater number of visitors it will receive over time.
However, not all inbound links are excellent. You want industry-related links from reputable sites. The goal is to acquire links considered “do follow” links, which Google follows in passing link authority to your site (though there is also value in no-follow links).
Landing pages are intentionally designed to get people to convert. However, if the content on your landing page is poor and has not been optimized for SEO, people may not stay around and your conversion rate will suffer.
11. Blog Post Visits
Knowing the effectiveness of your blog postings is an excellent method to figure out what your consumers enjoy reading and don’t like reading, as well as when they prefer to read. As a result, this raises your brand equity while also allowing you to expand your content based on what your consumers want and desire.
Listen to this: Your blog postings should drive a lot of traffic to your website. Blog postings are regarded as a traffic-generating strategy by our team. It implies that it should drive visitors to your website in two ways. The first way is through posting on social networking sites and sent to your email list. The second requirement is that it should rank and be found in search engines for your important keywords.
Remember, while the number of times you post is significant, the quality and length of the material you’re putting on your blog are even more essential. A lot of businesses have no trouble launching a blog. The difficult part is keeping up with it. Make an effort to stay active with your content, and you’ll see a difference in your blog’s success.
Most B2B firms use marketing analytics to find out what works and what doesn’t. It’s important to track your marketing KPIs so you can validate everything you do as a marketer, whether you work in the B2C or B2B sector. Thanks to the many tracking software now accessible on the market, businesses have more insight into their marketing efforts than ever before. Learn from your marketing blunders and make adjustments. Get to know your marketing accomplishments and share them with management.
Conclusion: Important Key Performance Indicators for Marketing
It’s may be hard to know the right marketing KPIs are the most important, but these 11 marketing KPIs help provide a good idea of how your marketing is doing and weed out ineffective marketing campaigns. If you want help figuring out which metrics matter and how best to measure them for your company, just ask! We can work with you on creating a strategy that takes into account all of the key elements needed for success in today’s digital age. After reading this blog post about KPI measurement, do any new ideas come to mind? What other high-level marketing and key performance metrics should you be measuring?
Bill is an award winning designer with more than 25 years in graphic and professional website design. He has experience in almost every area of creating art from his early days as a keyline paste-up artist to POS design to GRAMMY nominated album art.