It’s no secret that marketing requires copious amounts of time and money. Effective marketing strategies, from email campaigns to social media outreach, require significant investments to increase business revenue.
But how can you tell if your marketing strategies are paying off?
Key performance indicators (KPIs) help marketers measure success and calibrate marketing goals. Used to save time and money, KPIs assist marketers by providing vital data on what’s working and what isn’t.
Marketing campaigns can track a variety of KPIs. You should, however, choose KPIs relevant to your business’s objectives. Selecting the best KPI can improve your marketing strategy on all channels.
So how do you choose the right KPI for your marketing campaigns? Here are a few factors to consider:
What is a Key Performance Indicator (KPI)?
Like cooking, marketing is both an art and a science. And like any good chef knows their ingredients, every marketer needs to know if their efforts are effective.
Key performance indicators measure progress and success towards specific business goals. For marketers, KPIs track and improve campaigns, website performance, conversion rates and more.
However, with all the different examples of marketing KPI, it can be tricky to discern which ones you should track.
At Business Marketing Engine, we help businesses identify and track the most important KPIs for their specific goals. Backed by data and experience, our KPI dashboards provide helpful insights to improve marketing decisions and overall performance. To learn more about our KPI dashboards and how they can help your business, contact us at: https://businessmarketingengine.com/contact-us/.
16 Important KPIs in Marketing
Tracking the proper KPIs is essential for any business. Suitable KPIs provide the insight needed to make better marketing decisions, track progress, and measure success. What KPIs should you be tracking? How can you ensure you get the most out of your KPI dashboard?
Here are 16 examples of KPIs in marketing that every business should track:
Return on Investment (ROI)
Return on investment (ROI) refers to the profit to investment ratio. In other words, it measures how well an investment performs.
To calculate ROI, take the profit from an investment and divide it by the amount of money invested.
Tracking ROI is vital for any business, but it is essential for businesses heavily reliant on investments. That’s because the goal of any business is to make money. Put simply, if your marketing efforts cost more than they generate, you must reevaluate your strategy.
Return on Ad Spend (ROAS)
Return on ad spend (ROAS) is a metric that measures how much income you get for every dollar invested in advertising.
To calculate ROAS, take your total revenue from advertising and divide it by your entire ad spend.
Like ROI, tracking ROAS is essential to understanding whether or not your marketing campaigns are effective and profitable. If you want to stay in business, your ROAS needs a positive return.
Once you determine your ROAS, you can work toward improving it. If your ROAS is negative, you need to take action to improve your conversions, decrease your ad spending or both.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) measures how much it costs to acquire a new customer. To calculate CAC, divide your total marketing and sales spend by the number of new customers acquired during that time.
By analyzing your CAC, you can better understand how efficient your acquisition efforts are and where you can cut costs. Additionally, CAC can help benchmark your performance against other companies in your industry.
Lifetime Value of a Customer (LTV)
Lifetime Value of a Customer (LTV) measures a customer’s total value over their relationship with your company. Focused on retaining and growing the customer base, LTV measures long-term growth and success.
Several factors go into calculating LTV, including customer acquisition costs, retention rates and average revenue per customer.
By increasing LTV, businesses can improve their profitability and ensure sustainable growth.
Marketing Qualified Leads (MQL)
A marketing-qualified lead (MQL) is a lead that is more likely to convert into a customer. Typically generated through marketing campaigns and activities, MQLs help you identify the success of your marketing efforts.
Furthermore, MQLs can identify holes in your marketing strategies that directly relate to acquiring SQLs.
Sales Qualified Leads (SQL)
A Sales Qualified Lead (SQL) is a sales-ready lead. SQLs are important because they help indicate whether a company’s sales team is effective at generating quality leads.
A company may need to invest in lead generation activities or sales training if it has a low SQL rate. Conversely, if a company has a high SQL rate, it may be able to reduce its lead generation efforts.
Tracking MQLs and SQLs can provide insights and quotas for sales teams, reducing time and money spent on unqualified leads.
Landing Page Conversion Rates
Landing Page Conversion Rates show how effectively your landing page turns visitors into customers or leads. In other words, it tracks how many people have completed your call to action (CTA).
A high conversion rate will indicate that people are interested in your offering and taking the desired action. However, a low conversion rate can indicate an underlying problem.
Like landing page conversion rates, conversion rates are a crucial metric for determining the success of your website or campaign. From email signups to clicks on a specific link, conversion rates rate how well you are marketing.
A high conversion rate means that your website or campaign is doing its job in driving the desired action from your visitors. A low conversion rate could indicate that changes must be made to improve results.
Website visitor analytics helps measure potential leads or customers’ interaction with your site. By identifying the origins of your visitors and where they visit, you can make data-driven decisions about your marketing strategies.
Additionally, you can get insight into your visitors’ behavior, such as what actions they take. This KPI is crucial to identify your campaign’s success and any areas for improvement in your copy or design.
Social Media Audience Engagement (comments, shares, likes)
When it comes to social media, engagement is key. After all, what’s the point of putting out content if no one is interacting with it?
KPIs, or key performance indicators, are essential for understanding your content’s performance. By tracking your likes, comments, and shares, you can understand what content is resonating with your audience and what isn’t. This is extremely important information, as it can help you decide what kind of content to produce in the future.
Referral Traffic is the number of visitors referred to your website from another site. This helps you better understand how people are finding your site or content. Moreover, referral traffic can greatly indicate your content marketing and SEO effectiveness.
A high referral traffic volume typically means your content is resonating with your audience. However, a low volume of referral traffic could indicate several problems, such as poor content marketing or SEO.
Your traffic-to-lead ratio is an excellent KPI to measure the effectiveness of your website’s lead generation. A high traffic-to-lead ratio indicates that your website is doing an excellent job of generating leads. If you have a low traffic-to-lead ratio, it may be time to reevaluate your website’s lead generation strategies.
This is extremely important if your website’s primary purpose is to generate leads for your business. If you’re not generating enough leads, you’re not going to be able to grow your business.
Net Promoter Score (NPS)
Net promoter score (NPS) is a customer loyalty metric that measures how likely your customers are to recommend your business.
NPS can be a valuable metric for businesses of all sizes. It can help you understand how likely your customers are to recommend your business to others. Additionally, your NPS gives you insights into what your customers think of your company.
Using NPS, you can decide where to focus your efforts to improve customer loyalty.
Organic traffic is the number of visitors coming to your website from organic search results. This is important because it represents how well your site is ranking. To measure your organic traffic, use a web analytics tool to track the number of organic visitors using your site. This will give you an idea of how much traffic you’re getting from organic search results and SEO efforts.
Paid traffic focuses on the success of your paid traffic campaigns. You can track paid traffic to determine whether your campaigns generate a positive return on investment (ROI). Furthermore, paid traffic analytics can help you identify which paid traffic channels are performing well and which need improvement.
To measure your paid traffic KPIs, you need to track a variety of metrics, including:
- Cost per click (CPC)
- Cost per acquisition (CPA)
- Click-through rate (CTR)
- Conversion rate (CVR)
Using these KPIs, you can assess the success of your paid traffic and make necessary adjustments to improve your ROI.
Customer retention shows how well a company retains its customers over time. Businesses may use customer retention KPIs to determine where they need to enhance their client service, products, or marketing efforts. Customer loyalty KPIs can also tell how customers engage with your company’s brand.
Understanding your business analytics is key to understanding what is working well and what needs to be improved. KPIs are a great way to measure progress and identify areas of improvement.
At Business Marketing Engine, we track real-time insights to identify areas of improvement and take corrective action. So when your business is trying to improve its performance, you have the data you need to make informed decisions.
If you’re looking for a platform to help you track KPIs and improve your business performance, contact Business Marketing Engine today at: https://businessmarketingengine.com/contact-us/