Which KPIs should you pay attention to and which ones are useless noise? Here are the marketing KPIs that matter:
1. Revenue Growth
The only way to ascertain whether your business is growing is to look at the revenue growth. Marketing is almost never a linear process. You might see increasing results from one channel while another channel may see some decline.
The ultimate barometer of success is to look at revenue growth. What’s driving revenue growth? Where is revenue declining? The answer to these questions will allow you to focus marketing efforts on the right strategies and channels.
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2. Leads Generated
Many businesses focus on their lead generation numbers for a simple reason: The more leads you have, the more opportunities you have to grow your sales.
While it’s important to ensure all of your marketing campaigns result in a growing stream of leads, examine which marketing campaigns are generating the most leads. This way, you enhance what’s already working.
3. Conversion Rate
Conversion rate indicates how well your sales process is performing. Many business owners have already identified the conversion rate for their main sales efforts and sales landing pages on your website. However, it’s important to measure the conversion rate for other marketing campaigns and other web pages. Also, take a look at the main referral sources of website traffic. Don’t miss tracking the conversion rates on these website pages as well:
- Each landing page that is designed to convert traffic into leads.
- Sales pages for different products and services.
- Conversion rates based on the traffic source.
- Conversion rates for each of your different marketing campaigns.
4. Website Traffic Behavior
Studying your website’s traffic is important, but go beyond just looking at the growth of your traffic numbers. Dig deeper into the behavior of your web visitors to improve performance. This information will determine design and copy changes that increase leads and sales.
To optimize your website for visitors, ask the right questions:
- What links are they clicking on?
- How long are they staying on your pages/site?
- What have they come to your site for?
- What’s making them leave?
Look into as much website user data as possible:
- Other pages they are looking at after landing on your site.
- The bounce rate for your website and/or abandon rate for shopping carts.
- The average time spent on all of your various pages.
- The number of clickthroughs for your Call To Action (CTA) on your websites..
- The referral sources driving traffic to your website. Keyword data is important for Search Engine Optimization (SEO) campaigns.
- The main exit points of your site so that you can fix any user conflicts.
5. Cost Per Acquisition (also referred to as Customer Acquisition Cost)
Knowing how much it costs to acquire a customer helps you make better decisions on how to budget for your advertising campaigns. For example, if you spent $1,000 on an ad campaign that generates 100 customers with a profit of $4,000, then it costs $10 to acquire the customer. Customer acquisition costs help you understand how much you can spend on gaining new customers while covering your upfront costs.
6. Lifetime Customer Value
Do you know what your average customer is worth over the lifetime of the business relationship? Knowing the average lifetime customer value (LCV) tells you how much you can afford to spend to acquire customers. Businesses that understand their LCV are comfortable with losing money in the front-end, because they know the rewards more than make up for it in the back-end.
Understanding LCV gives you an advantage over competitors and allows you to come up with better marketing strategies. Look at is the net profit generated for each customer after acquisition and other costs. LCV can be tricky for businesses to measure, because it takes some time to figure out.
Newer businesses should measure LCV according to timeframes. For example, obtain the average value of each customer over one month, three months, six months, and a year. It also helps to use a marketing automation/CRM platform that can keep track of this metric.
7. Engagement Metrics
Whether you’re posting content on your blog or social media, look at your engagement. These metrics include comments, likes, and shares. The engagement metrics give you an idea of how well you’re connecting with your followers. If your engagement metrics are low relative to your follower count and views, then it’s very likely your content isn’t resonating with your followers.
Another important KPI to track of is social media follower growth — which tells you whether ot not you’re reaching your target audience. If you’re growth has been substandard, then you may want to invest in marketing your accounts.
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8. Email Marketing Metrics
To ensure that your email campaigns are hitting the right market, there are multiple email marketing metrics to track. In the end, you’ll have a better understanding of what to work on in order to increase the performance. For example, if your open rates are low, try different subject lines.
Here are the email metrics to measure:
- Deliver rates of your emails
- Open rates of your emails
- Clickthrough rates from email campaigns
- Conversion rates from email campaigns
- Unsubscribe rates from email list
The bottom line
The ultimate point of marketing KPIs is to drive more revenue to your business. However, which marketing KPIs your businesses should rely on depends on many factors:
- what stage your business is in
- what your marketing goals are
- what marketing strategies you’re using
- what marketing channels you’re using
Does it make sense to track more or less KPIs for your business?
For example, a subscription-based business model will keep a close eye on churn rate, the annual percentage rate at which customers stop subscribing to a service or employees leave a job. An ecommerce business model, on the other hand, will look number of sales, average order size, gross profit, etc. Another example: A new business may not have a reliable LCV figure to act on whereas a mature business relies on LCV numbers heavily to expand and scale.
Every business will need to measure different marketing KPIs, but the ones on Bragg Media’s list cover the most important ones.
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