Marketing efforts can and should be tracked. Tracking highlights how marketing dollars are being spent and analyzing results allows you to be more efficient and minimize wasted marketing budget.
Traditionally, Return on Investment (ROI) is an important fiscal measurement of success. Today, Key Performance Indicators (KPIs) offer a more holistic way to view marketing efforts that can include ROI.
What is a KPI
KPIs, or Key Performance Indicators, are the criteria that you measure how well you’re meeting your goals. Marketing KPIs are specific, numerical marketing metrics that are agreed on by the organization as the main indicators of corporate success.
Marketing KPIs include sales revenue, cost per lead, customer value, inbound marketing ROI, traffic to lead ratio, lead to customer ratio, landing page conversion rates, organic traffic, social media traffic and conversion rates, mobile traffic, number of visitors on your site, number of page views, time on site, bounce rate, conversions, growth over time and more.
You might be thinking, “Wow, these are a lot of KPI metrics, I can’t possibly measure all of them!”
Yes, that was an overwhelming list of KPI metrics, and while they are all very useful, not all may be necessary to measure for your small business. We broke down what we think are the most important KPI metrics to track.
What are the most important KPI metrics to track in marketing?
- Sales Revenue
- Sales revenue is how much money your marketing strategy has brought the company. An easy way to track this is with a simple calculation: (total sales for the year/quarter/exact time period) minus (total revenue from customers acquired from marketing during that year/quarter/same time period).
- Cost Per Lead
- Cost per lead measures the amount of money it took to acquire each new lead. The best way to calculate cost per lead is dividing the dollars spent in marketing and advertising by the number of leads you gained. For example, if you spent $1000 on marketing for the year, and gained 10 new leads then the CPL for each lead is $100. CPL can also be also be specific to a single marketing project.
- Customer Value
- Customer lifetime value measures how much a company can make from one customer. You can calculate the lifetime value of customers by calculating how much a customer is likely to spend. Calculate the average sales per customer times the average times a customer buys per year times the average retention time for a typical customer.
- Inbound Marketing ROI
- ROI, or Return on Investment measures the success of an investment versus other investments. A simple calculation to measure inbound marketing ROI is (Gain from Investment – Cost of Investment) / Cost of Investment. This is a vital KPI to measure your monthly or annual performance. Measuring Inbound Marketing ROI will help you avoid investing more money in a project that has little financial reward.
- Traffic to Lead Ratio
- The traffic to lead ratio, also sometimes referred to as the new contact ratio) measures how many people that visited your site have performed an action (filled out a contact form, spent a significant amount of time on a page, etc.) that makes them a potential lead. If your traffic to lead ratio is low, it might be time to make some changes to your website.
- Lead to Customer Ratio
- Getting leads, especially qualified leads, is wonderful, but it doesn’t mean much if you aren’t able to turn the leads into sales. The lead to customer ratio measures how many leads your sales team was able to close. It can be measured by tracking your leads and sales in CRM software.
- Landing Page Conversion Rates
- A landing page is a great way to measure how many customers come to your website through PPC campaigns, because it links to a specific web address. The best way to measure the landing page conversion rate, on times people clicked through your landing page, is with a call to action, such as a contact form. If your conversion rate is low, consider changing your CTA or adjusting your landing page slightly.
- Organic Traffic
- Organic website traffic is measured by how many people go to your site on their own, without any paid marketing effort. The best way to increase organic traffic is through an SEO strategy. Monitoring your organic traffic, along with your keywords, will help give you a better picture of how to adjust your SEO strategy.
- Social Media Reach
- Social media reach measures how many customers you are getting through social media, such as Facebook, LinkedIn, Twitter Instagram, and Google+. You can check how your content is performing on each social media site, as well as setting up track backlinks to your website. Tracking social media will help give you a clear picture of which sites are performing best for your company so that you can focus your efforts and maximize your ROI.
- Mobile Traffic
- Mobile traffic refers to the traffic to your website through a mobile device. This is an important metric because it can help inform you if your website is properly optimized for mobile devices. Tracking the user experience on mobile devices can help you make your mobile site more efficient for potential customers.
While the metrics above are all individual examples of standard KPIs, it’s important to remember that no marketing effort is done in a vacuum. In other words, you may spend money on a trade show booth and get 10 leads, but the ROI on that can’t be tracked solely to the booth. You have probably promoted the booth on your website, possibly done an email campaign about it and maybe even more. So while these are indeed good “indicators” they also have to be viewed with the big picture in mind.
Being able to analyze these KPI metrics is vital in understanding the success of your marketing efforts. Marketing Influence creates marketing programs that are customized to your goals and budget. Connect with us now to learn more about how we can help you with your marketing analytics.