What gets measured, gets improved. And key performance indicators in marketing are the first step towards measurable improvement.
KPIs are data points or quantifiable measurements that are used to measure your company’s performance relative to some predefined goal.
In this article, we will walk you through marketing KPIs that you should track so that you can hone in on the metrics that matter the most for your business.
What are the Key Performance Indicators in Marketing?
According to investopedia, KPI is a set of quantifiable measures that a company uses to gauge its performance over time.
You can think of KPIs as your milestones on the road to success. Their purpose is to help businesses analyze and evaluate their success at reaching specific targets.
While high-level KPIs track the overall performance of the business, low-level KPIs measures key business functions like marketing.
Key performance indicators in marketing are strived at driving action. Basically, they are measurements that help you find out whether your marketing campaigns like email marketing, missed call marketing, etc are successfully moving towards their goals or not.
By regularly monitoring these key performance indicators you can make informed decisions about your marketing efforts and focus on (and invest) in initiatives that are driving your business growth.
Setting Key Performance Indicators in Marketing
There are thousands of KPI metrics available, some are obvious things like net profit and others are super-clever stuff like Bekidou rate which is a rate of machine’s actual operational time to its total scheduled operational time and you probably have never heard about it before.
This is because you can not measure everything. While it will be cool to measure Bekidou rate, for the majority of businesses, it will be a total waste of time. This is why you should be able to compare your metrics to a benchmark metric and be able to discern what this means for your business.
One simple way is to categorize and set up groups of KPIs by purpose or by the department. This will avoid confusion and you will not waste time on metrics that you probably don’t require.
Keep the KPI Numbers to a Reasonable Number
Whether you are a small business or large, too many KPIs are difficult to manage, so do a brainstorm session and cut it down. Even if you choose 10 metrics for each of your 5 departments.
You will have solid 50 metrics to analyze the performance of your business. It is always better to measure and take action on fewer key performance indicators in marketing or any other departments than to have a lot of them and underdeliver on their analysis and execution. You need to be smarter about choosing the KPIs.
One simple way is to use the SMART criteria to evaluate the relevance of KPI. Let’s have a look at some of the key performance indicators marketing strategy can benefit from and which are from the perspective of digital marketing.
How do you judge your marketing’s success? Simple, by measuring its growth in sales revenue.
Start measuring your marketing efforts on sales growth and you will be able to weed out the marketing campaigns or methods that do drive sales.
Another important KPI to measure when it comes to sales is How fast does your sales team respond to leads?
This directly impacts your marketing efforts. If the lead isn’t approached immediately, you may lose it. Once you measure this, you can improve it and thus boost conversion.
To improve your sales growth, you should rely on the simple lead management system like Teleduce.
This will improve your sales team’s engagement, be better informed and will improve their overall performance. And according to Gallup, highly engaged workforce see an average 20% increase in sales.
The primary objective of any marketing campaigns is to obtain sales.
However, campaigns hardly result in an immediate sale, they are more likely to provide you, a lead.
However, you need to understand which leads are Marketing Qualified Leads (MQLs) and which leads are Sales Qualified Leads (SQLs).
MQLs are those leads who have recognized themselves as more engaging, sales-ready contacts than your usual leads, but they have not yet become fully fledged opportunities.
SQLs are the leads that your sales team has accepted as worthy of a direct sales follow up. Understanding the synergy between them will tell you the Leads to Close ratio of your company.
Another important key performance indicator marketing examples when it comes to lead in determining the cost per lead.
Say, you are spending $0.2 to $0.5 acquire a single lead via paid search and Rs20 per lead via social media, then it would make sense to concentrate your efforts on the social media channels that are performing well and abandoning the other.
Lifetime Value of Customer
Customer lifetime value is priceless product marketing key performance indicators as it can help streamline your upsell and cross-sell processes.
It will also gauge your company’s ROI, and help strategize future business goals.
But how do you calculate what your customer is worth to your business over the lifetime of your relationship?
Well, it involves figuring out all the sales your average customer has initiated over the course of your relationship.
It is not easy, but once you work it out, you can design your re-selling strategies to maximize customer lifetime value.
This is pretty simple, how many of your website visitors convert into leads? This will be helpful in measuring the quality of website traffic and the conversion rate of your website.
If you find that very few of your leads ever become marketing qualified, then you need to work on improving the quality of your website traffic.
Understanding your website traffic will also help you determine what your users want from you. This will help you anticipate what your potential customers needs and this is what marketing is all about.
Social Media Reach
Social media platforms help you to publish your content and interact with your current and potential customers.
This is why their metrics should be an integral part of your key performance indicators marketing plan.
Social media websites like Facebook and Twitter have built-in tracking and analysis which makes it incredibly easy to get this information whenever required.
You can determine lead conversions, customer conversions and web traffic percentage associated with your social media efforts with these metrics.
Pro-tip: If you are a startup or small business, check out how you can design and develop a solid Facebook marketing strategy so that you can improve your social media presence, efforts, and ROI for your business.
Email Marketing Performance
Every email marketing campaign should be analyzed with its own set of KPIs and they should be dissected each on their own merits. Few email marketing KPIs include
- Clickthrough Rate: With this metric, you can calculate the performance for every individual email you send. This metric is very important since it gives you direct insight into how many people on your email list are engaging with your content and whether they are interested in learning more about your brand or your offer.
- Conversion Rate: This metric shows you the percentage of email recipients who have clicked on the call-to-action which was inside the email sent and then they completed the desired action, such as filling out a lead generation form or purchased a product. This will determine the extent to which you’re achieving the goals of your email marketing.
- Bounce Rate: This metric shows the percentage of total emails sent which could not be successfully delivered to the recipient’s inbox. Bounce rates may be the result of an invalid, closed, or non-existent email address. With this metric, you should clean your email list as bounce rates determine the email sender’s reputation.
- List Growth Rate: This metric shows the rate at which your email list is growing. You will learn what percentage of users are unsubscribing from your list and take appropriate measures to stop them from leaving.
- Email Sharing/Forwarding Rate: You probably include social share buttons on each email campaign. This metric shows the percentage of recipients who clicked on a “share this” button and has posted your email content to a social network or if they have forwarded the email to a friend. This metric is important since it will help you generate new contacts.
- Overall ROI: You definitely want to learn the return on your investment for email marketing campaigns. This will tell you how many leads did you generate via email marketing campaigns.
Pro-tip: Check out our guide Best Email Practices for Small Businesses, so that you can create a solid email marketing strategy and convert leads.
Landing Page Conversions
Landing pages are designed to draw people in by offering them certain incentives and to guide these visitors into conversion.
This key performance indicator in marketing strategy assesses the number of people who visit them and tell you whether your CTAs are converting them or not.
If it is not working, you can take proper actions like check whether the content on the landing page stinks or whether the page is not properly optimized and take proper action.
There are plenty of KPI metrics available, but always choose KPIs that are most relevant to your specific situation and company.
And when you are deciding on key performance indicators in marketing, identify both lagging and leading performance indicators. This way you can understand both what happened in the past and how you are continuing towards your future goals.
Want to analyze and see improvement in your marketing KPIs? Your goal will always be measurable and achievable with our integrated lead management system CRM Teleduce.
Keep an eye on all the important metrics from lead generation to engagement to the website traffic, increase the scope of your marketing campaigns and boost ROI.
Begin your Free Trial of Teleduce today or Schedule a Demo.