When it comes time to setting and tracking your marketing KPIs, or key performance indicators, you’re probably aware of the typical metrics such as sales revenue, leads and cost per acquisition. But there are many other KPIs that you should be tracking in order to deliver more successful marketing campaigns. By tracking the right KPIs, you can make adjustments that better align with your long-term goals and allocate your budget efficiently. If you don’t do this, it’s possible that your company will be supporting marketing activities that are losing money. No one wants this.
Let’s discuss the 10 most important KPIs you should be tracking so that your company can make the best decisions.
1. Sales Revenue
How much money have your marketing efforts brought your business? Knowing this number is a fast and easy way to determine each campaign’s success. Things aren’t quite so black and white as looking at the bottom number, however. You must first define the difference between inbound and outbound tactics so that you may correctly distinguish the profits coming from inbound efforts only.
Generally speaking, inbound marketing includes: blogging, infographics, premium content, social media and PPC. Outbound marketing includes: direct mail, television ads and advertising.
2. Cost Per Lead
How much does it cost to gain a customer from inbound marketing versus outbound marketing? You will need to integrate your marketing automation and customer relationship management (CRM) platforms to do this, as well as all relevant costs associated with enterprise resource planning (ERP) integration. To calculate customer acquisition costs, add up all relevant costs such as manpower, technology and software and general overhead.
Once you have calculated the costs associated with your inbound and outbound marketing campaigns, you can determine new sales and allocate budgets to new campaigns.
3. Customer Value
Each customer brings your business a value. To determine this value, use this simple formula: (average sale per customer) x (average number of times a customer buys each year) x (average retention time in months or years for the average customer).
Expanding this value is what you want to aim for, so consider ways that you can nurture relationships with customers. Ideas include offering premium content, attractive sales and promotions, first-time peeks at new products, etc.
4. Landing Page Conversions
The best way to determine if your landing pages are converting visitors is to see how many people are visiting your pages and compare this number to how many are filling out the forms. If you have a low number of people converting, it’s possible that your content is lacking, your landing pages are hard to follow or you don’t have a clear call-to-action posted. Fix up your landing pages and split test them to determine which messaging, tone of voice, layout, etc. appeals to your audience.
5. Organic Traffic
What percentage of your traffic comes from organic searches? This percentage tells you a lot about your brand and how people perceive it. Your organic traffic is directly related to your SEO strategy, so a strong SEO campaign should deliver a fair amount of organic traffic. To get a better understanding of your brand awareness and content marketing effectiveness, look at how much traffic is associated with branded keywords and how many conversions are assisted by organic search.
6. Social Media Engagement
Social media plays a big role in your inbound marketing strategy. Through social media, you can connect with your audience and share content. The engagement you receive can include anything from likes to comments to shares and much more.
With so many platforms out there, you don’t have time to utilize each platform to its full potential. Instead, break down the number of leads, customers and percentage of traffic that come from each platform and determine which one is yielding the most traffic. You can then focus your attention on your top channels.
7. Inbound Marketing ROI
To determine your monthly and yearly performance, you’ll need to calculate the return on investment of your inbound marketing campaigns. This will tell you how well your past campaigns have performed and where you should be allocating your budget in the future. There’s no reason to put more money into activities that aren’t working for your business, even if they work for someone else.
8. Traffic to Lead Ratio
It’s important to understand where your traffic is coming from, not just that you have it. Is traffic coming primarily from social media or referrals? Or is it coming from organic or direct sources? Knowing how your traffic is getting to your website allows you to better understand your audience and which channels are most effective at bringing your brand visibility.
Also keep in mind that conversion rates are equally important. Your traffic should be meeting the goals you set, but you should also see a certain percentage of this traffic converting (usually around 2-4%).
9. Lead to Customer Ratio
Traffic is important. Conversions are important. Now it’s time to look at how many leads you’re able to close. Leads are important, too. The number of leads you acquire is a good indication of how successful your marketing campaign is. Be sure to understand the difference between qualified leads and accepted leads.
Qualified leads are those who are “sales ready” because they’ve completed certain activities like filling out a form or requesting a quote. Accepted leads are opportunities that have contacted your business to learn more, but aren’t quite sales ready. Obviously, you’re looking for how many leads you close and whether or not your campaigns are capturing leads.
10. Traffic, Leads and Conversions from Mobile
Mobile devices like smartphones and tablets are generating a ton of traffic, leads and conversions for businesses. Your website should be optimized for mobile devices, and one way to tell this is by calculating the amount of traffic coming from tablets and smartphones. Are these visitors converting from optimized landing pages? Or are you seeing high bounce rates?
These numbers also help you understand how effective your mobile presence is. If visitors aren’t staying on your website very long or aren’t filling out your landing pages, you know you have to strengthen your online presence.
Tracking KPIs allows you to be a better marketer. You can easily determine what’s working and what’s not for your inbound marketing campaigns, and you can fix failing metrics that are doing more harm than good. There’s no reason to let your campaigns run their course until they are complete. With the right information, you can step in, make the proper adjustments and show the real value of your marketing campaigns.