What makes a marketing ad, a piece of copy, or a months-long campaign successful? Is it the dollars in sales that are tied to the Facebook ads you placed? Is it an uptick in comments posted online or traffic to your website? How can you tell if what you’re doing is actually working?
People in marketing, and the people who manage them, use KPIs, or key performance indicators, as a means to measure success. Where KPIs were once the realm of factory output and things like engineering, 21st-century companies are implanting them into every aspect of their businesses. Anything that can be measured is being measured, and leaders are finding innovative ways to track things traditionally believed to be immeasurable.
Whether you’re a founder or an entry-level marketing professional, measuring performance should be something you welcome wholeheartedly. Tracking performance is one of the best ways to offer a realistic picture of where you are as an organization and what kind of impact your efforts are having on the bottom line, your image, employee morale, and a hundred other things that make a successful organization tick. Here we’ll cover some of the KPI’s that the best marketers use and why they’re important.
This is a broad KPI that helps depict the overall trajectory of a business. Are you growing, staying the same, or shrinking? Growth rates and sales results are a quick and dirty way to take self-inventory. At a high level, it can tell you if marketing is effective and how it’s impacting sales. As you get into the data a bit, you can start to tie marketing work to sales more concretely.
Do you know how much money you have to spend to acquire a new lead? A new customer? A lot of companies are placing a lot more emphasis on lead generation and finding quality leads that increase their conversion rates. Using lead generation as a KPI can offer insight into what your sales pipeline will look like in the future as well.
As you begin measuring your lead generation, think about also breaking down your leads into different categories. Not all leads are created equally. Knowing what quality each lead is can help you position them well for sales or marketing retargeting to move them along the sales process more efficiently.
Customer Acquisition Cost
Investors will always want to know how much it costs for you to get a new customer. What if it costs more money to acquire a customer than the product you’re selling them? That means you’re losing money. Cost of customer acquisition, or COCA, can also tell you at what level you need to scale to become profitable or to afford hiring another marketer. Once you have your COCA down, you can play with your marketing to try and lower that number.
Response times are often more important than many managers think. For many customers, there is a marked amount of time during which a company needs to respond to them for them to take some sort of positive action. For example, if you tell a customer that you’ll respond to an inquiry within 24 hours, that may be too long for them to keep interest in your products. Adjusting your response times down to, say, six hours, might be the key to closing more deals.
Marketing needs to work in close conjunction with sales to keep lead response times low. Most marketers know the pain of working hard to generate a great lead only to have the lead languish in a sales queue. Keeping sales response lead times should be a priority marketing KPI for every company.
Website Conversion Rate
Most marketing materials are positioned to drive more traffic to your website or an offer landing page. What they do once they’re on the site, however, should also be measured. When a visitor gets to your page, what are they doing there? How much time do they spend on the site? What do they click? If they don’t purchase, at what point of the checkout process to they abandon the products? These are all data you should be collecting and analyzing along with your other marketing KPIs.
Knowing your marketing conversion rate will also tell you how much traffic you need to generate to result in X amount of sales.
Content Consumption Rates
A lot of marketing involves pushing content out to your audience. Businesses everywhere write blogs, post on social media accounts, produce videos, publish newsletters, and create other types of content. But do you know how often your customers are reading or viewing what you’re putting out there? The best online marketers use this information to make small tweaks to content that raise consumption rates. If you know, for instance, that putting a brief overview at the beginning of some video content gets people to stay longer, then you can start to implement that across your content library. Likewise, changing the tone or wording of your email titles can get your customers to click in at a higher rate.
Email Marketing Results
Email marketing should be part of your overall strategy, and you’ll want to know how effective it is. The right email marketing can generate traffic and increase customer engagement. The wrong emails get you sent into the spam folder and on the blocked list. What’s the difference? For every company it’s different, but one thing that’s the same is that making email marketing performance a marketing KPI is the only way to know for sure.
You should be measuring:
- Open rates
- Subscribe and unsubscribe rates
- Times emails are forwarded
- Click-through rates
These indicators will help you write better emails that your customers and potential customers will want to open, share with their friends, and click the links inside.