You know what shares a lot in common with marketing metrics? Archery. You have to have lots of focus, know exactly what you're aiming for, and not end up shooting someone in the back with an arrow.
Ok, so that last part doesn't happen in marketing. But you need to have a handle on all the marketing data that gets thrown your way. So what can you do?
Well, you've come to the right place. We're here to tell you all about marketing KPI's and how they can help your company! So let's not waste any more time and jump right in!
Marketing KPI's (or key performance indicators) are quantifiable values that indicate how well a company has met their set business goals in regards to marketing. The key difference between KPI's and standard marketing metrics stems from the fact that KPI's are a subsection of said metrics, focusing on the top categories a business wants to measure (rather than every category).
There are 4 "rules" that KPI's tend to fall under. First, KPI's need to be actionable. This means that the process measured by the KPI is open to change.
Second, KPI's need to be directional, meaning they need to point out whether a company is doing better/worse than before.
Practical (the third rule) refers to the ability of the process to work well with other facets the company already has going with their marketing data collectors. Finally, quantitative means that the KPI will deliver its results as numbers or percentages.
You can also use KPI's to track the output of your employees. This will help you figure out how much revenue is getting pulled in. It is essential for your business!
So now that you know what key performance indicators are, which ones are the most important for your business?
For starters, you'll want to use marketing KPI's to track how your business is doing in the financial realm. One such KPI that falls under this category is sales revenue, which is the total sum of money you earned for a set period of time due to your marketing efforts. In addition to using this metric to get an idea of your financial situation, you can also use it to determine what marketing tactics are and aren't working together.
Another KPI that falls under the financial umbrella is customer lifetime value. By multiplying together the average sale value, the average amount of purchases, and the average time you keep a customer with your company you can determine how well your business holds on to longtime customers. From there, you can modify your advertising strategy to cater more to either new or old customers (depending on your results).
Another key facet of KPI's for your business is social. You use these metrics to measure your performance on social media as well as the general brand perception of your company by the average consumer.
For example, you can monitor the performance of the ads you put on social media sites. That way, if your ads are underperforming on a certain platform but doing well elsewhere, you can divert your energy to that new social media platform.
Another strong KPI for the social category is seeing to what degree your posts are getting interacted with. Whether it's seeing how many likes you're getting on Facebook or checking your follower count over time on Twitter, you have an almost real-time gauge of how "popular" your brand is with consumers.
This facet of KPI's is similar to social but pertains to your website and its performance instead of external social media sites. Here, you can measure how often people find your site through search engines and check what device people visit your website from (so you know if you need to make your website more mobile-friendly).
Another important metric to calculate pertains to your bounce rate, which refers to the number of users who enter and exit your site without visiting another part of the site. If you have a high bounce rate, it's time to look at your user interface and general design and see if there's something consumers are finding unattractive or confusing.
And that's not all. You can also measure the number of unique visitors your site gets within a certain period or how many content downloads your site gets on a regular basis.
You can have all the best KPI's on the planet, but having all that data means nothing if you don't know how to read it. So how do you read them?
Well, let's start with the classic cost per lead. To start, you'll want to determine how much you've spent on marketing. Then you find the number of new leads your company has procured in the period you're measuring, and divide your marketing expenses by that number.
Well, what about ROI (or return on investment)? Well, take all the money you earned and subtract it by what you invested, then divide it again by your investment amount. If you want to find out your conversion rate, take the number of conversions (or times a visitor to your site did something you wanted them to) and divide it by as many consumer interactions with ads you have that you know led to conversions.
Finally, how about organic traffic? Well, you need to organize all your top keywords by how they've performed. From there, you can get an estimate as to how much traffic each keyword pulled.
And there you have it! Now that you know all about what marketing KPI's are and how they work, you're ready to propel your marketing department to the top of its game!
But are you hungry for more information on the latest trends in digital marketing and how to keep your advertising department on top? Then check out the rest of the posts on our blog!