- On this blog post, you'll learn:
- What's a KPI (Key Performance Indicator);
- Three tips to choose the right marketing metrics;
- 9 marketing performance metrics (KPIs) ideas.
After planning and implementing a marketing strategy, the final step is to measure its results. Metrics will tell you if the strategy has achieved its goal, if it needs adjustments, or another action plan should replace it. Either if the results are good or bad, by measuring marketing metrics that matter to your business, it's possible to not only improve ongoing strategies but to define your company's next steps and actions.
As the name implies, the KPI (Key Performance Indicator) reflects the success of a strategy, a department, and the company itself. To choose the right marketing performance metrics, it's important to define the objectives you want to reach. The marketing KPIs should be able to answer this question: "what results I need to achieve for my company to grow?".
That's why it's a problem to track the wrong KPIs. You need a reliable source of information to make smart decisions. If a metric isn't relevant to the business and it's still used to create new marketing actions, you'll spend a great amount of time on planning, implementing, improving and analyzing a strategy that won't drive actionable results.
But what are the marketing performance metrics that matter to your business? That's something only you can define. Luckily, I've prepared this content to help you choose the most valuable marketing KPIs to drive your company towards success.
Tips to choose marketing metrics that matter
Before we jump to the most important metrics that successful businesses analyze, it's important to know how to choose the right marketing KPI for your company:
1. Use rates and growth instead of total numbers
Having a dashboard to follow your total number of page views, leads or customers is satisfying, isn't it? But unfortunately, it's a waste of time. Total numbers will always go up - instead, focus on how much these numbers have grown compared to a previous period.
Also, a rate is easier to follow than a five or six-digit number. Who likes doing complex math only to report how many leads they've acquired last week? No one, I tell you.
2. Establish a period of time to measure it
Marketing KPIs should be measurable and stable. Since it's better to analyze rates and growth than total, you must select a specific time window to measure it. Most companies prefer to have weekly and monthly KPIs because they give a strong, stable rate to compare with other periods.
If you choose a period that is too short, it won't have enough time to provide a stable and comparable number. If you take too long to measure the KPI, you'll lose timing and won't be able to take action to improve its results. Remember: as your company grows, you'll have a smaller time window to change strategies and make decisions.
3. Choose a realistic and reachable goal
Another thing about having solid marketing KPIs: you can use them to define realistic goals. A company can't expect a $5.000.000 ARR without knowing how many signups they've had last month.
With a measurable, stable KPI, it's easier to establish both goals and actions to reach them. It gives valuable parameters to create a realistic projection of how and when that goal will be achieved. It's OK to dream big, but it's better when you know you're in the way to get it.
The 9 marketing performance metrics that matter
Now you know what is a KPI in marketing and how to choose a valuable metric to target your business efforts. To help you define which metrics you'll track, I've brought 9 marketing KPIs that companies follow in order to reach their goals:
Organic traffic growth
Tracking how many people are getting to a website is important to measure the effectivity of content marketing, SEO, and other passive acquisition channels. With a good website conversion rate, a crescent number of visitors increases the number of leads, thus potential clients.
For a more detailed analysis, consider tracking traffic growth from different channels, such as social, referral, search engines and even direct visitors. Again, the growth rate is more valuable than the total number, so focus on the organic traffic growth.
Social media traffic (and conversion rates)
In your marketing efforts, having social media traffic as a KPI can be useful for many things. It helps to determine if - and which - acquisition strategies on social media are working, which social media platform brings the more qualified leads, and to measure a brand's social presence.
When measuring the traffic to understand which actions are catching people's eyes, do not forget about conversion rates. These KPIs should be your North Star to plan new acquisition strategies, since they show the channels that generate sales-qualified visitors.
Discover how to easily track your traffic channels with UTM Parameters: click here!
What's the point of having constant traffic? To convert visitors into leads, of course! That's probably the most common marketing KPI companies follow. The traffic-to-lead ratio is a marketing performance metric that tells how many of your visitors convert into contacts.
The lead conversion rates of a product or service can vary depending on its industry. The tip is to benchmark competitors and other companies in the same market to establish a realistic ratio. Then, plan conversion rate optimization (CRO) actions to increase your traffic-to-lead ratio.
Landing page conversion rates
Although your website certainly has signup and newsletter subscription forms, they're not the only way to convert visitors into leads. A good content marketing plan needs landing pages to get qualified opportunities. Knowing that, tracking conversion rates from landing pages as an individual KPI is ideal to monitor and improve ongoing lead acquisition strategies.
Most of the times, bringing more visitors to landing pages isn't enough to generate more leads. You have to focus on increasing the conversion rate. Since they have one page to catch the visitor's eye, you can try changing variables to A/B test and improve their traffic-to-lead ratio. These variables include its colors, CTA, content, interactive media and form length.
Cost per lead
This marketing KPI is somewhat related to customer acquisition costs (CAC), but they're not the same. The point of tracking the cost per lead is to know how much marketing and sales spend on lead generation. It includes employee salary, content marketing tactics, targeted PPC ads, social media marketing, and even corporate events.
The goal here is to keep this number low to optimize costs on bringing new business opportunities. A high cost per lead and a low traffic-to-lead ratio are dangerous for a company's financial health. That's why both of them are metrics that matter to plan your next actions.
From all marketing qualified leads (MQL) acquired through inbound marketing, how many of them sales accepted as a sales qualified lead (SQL)? Having a marketing KPI to answer this question is how you'll make both marketing and sales reach their goals.
The MQL-to-SQL ratio, as the name implies, measures if MQLs sent to sales are qualified enough to procced through the sales funnel. Its analysis is important to identify which acquisition channels have the most qualified leads. With a stable MQL-to-SQL Ratio, a company can plan its growth based on the "sales funnel conversion rates".
Inbound marketing revenue growth
An increasing revenue is always great. But instead of looking at the total revenue, focus on how much money inbound marketing has brought to your company. This includes all the revenue of customers from self-service products, landing pages, organic traffic and other inbound strategies.
Again, careful with the "total number illusion". Spend efforts to achieve an increasing revenue growth rate rather than measuring the total revenue. That's how a company defines how effective are its acquisition and conversion strategies.
Great news: inbound marketing is bringing revenue. But how is its ROI? Have a special place for Inbound ROI in your KPIs dashboard: it's a metric that matters to your marketing strategy. With it, you'll be able to analyze the return on investment of your whole inbound strategy.
Also, keep track of ROI from individual strategies, such as social media and content marketing. Then, check which ones deserve a higher investment, and which ones need tweaking to bring more results. More than revenue, ROI states how effective strategies are.
Customer Lifetime Value (LTV)
Although many people claim that LTV is a sales KPI, marketing can use it to determine if inbound customers are contributing to the company's profitability. When the lead is tracked since its first interaction, you'll discover the most effective channels, content, approach and nurturing strategies that generate valuable customers.
Dashboards to analyze marketing performance metrics
More important than keeping track of marketing KPIs is to gather relevant data in one place. Let's face it: there's nothing more painful than having all important metrics scattered around several different platforms, software, spreadsheets, and documents.
To solve this issue, dashboards come in handy. With a good software, analysts and managers can check - in real-time - the performance of strategies using their own marketing metrics that matter. The best part is that it can connect different data sources to create reliable reports. That is landing pages, UTM parameters, ad conversions and CRM data.
Also, since they can be completely personalized, companies can create different dashboards based on the metrics' time window. For instance, one dashboard can have weekly KPIs, and the other, monthly KPIs. That's particularly useful making data-driven decisions to improve ongoing actions and plan the company's next steps.
Careful of the vanity metrics!
One final thing about defining your marketing KPIs: don't be fooled by vanity metrics! The term, coined by Lean Startup's Eric Ries, define metrics that do not necessarily show the real performance of a company.
Number of pageviews, registered users or app downloads can be a sign of growth, but don't help you make a decision. On the other hand, actionable metrics can express the true potential and growth of a business. Among others, acquisition costs, revenue growth and customer engagement index can truly tell if a company is successful or not.
Keep that in mind when choosing your marketing performance metrics. Choose KPIs that actually tell what's going on with your company. Good or bad, they always give insights to make smart moves. Knowledge is power, but actionable data is a superpower!
What about you? What are the metrics that matter to your company? If you have a marketing KPI you'd like to share, use the comments section below - I wanna hear from you!