For many of us, key performance indicators (KPIs) can be intimidating. We associate them with performance reviews, quarterly business reviews, and board meetings, and they shed light on how well you’re doing — or not doing. In marketing, however, KPIs are a good thing, because they help you understand what’s working and what’s not working with the strategies and tactics you’re using to attract and convert leads. In today’s climate of breakneck competition, it’s vital to track, measure, and analyze this information.
This blog post takes a look at why KPIs are important to you as a marketer, and six important KPIs every marketer should track.
What are marketing KPIs?
Say you’ve just taken up fishing as a hobby. You’ve heard about the best fishing spots, the best nets and spears and poles, and the best times of day or night to go out there. Since you don’t know what works best, you try them out one by one, track and measure their effectiveness, and figure out the best combination of tactics. What bait got the most bites? What line didn’t break? What reel retracted easily? All of these are KPIs for the best fishing equipment and conditions. Next time you’re on the lake, you’ll remember which method yielded the best results.
Similarly, marketing KPIs help you measure the value of each marketing tactic you try, so you know how to maximize your investment and effort. What got your audience’s attention? Did the last email campaign get click-throughs? What piece of content was downloaded most frequently? Knowing these metrics will enable you to maximize your investment of time, money, and effort to get the most possible leads.
As marketing strategies can be dynamic and complex, keep an eye on the following KPIs to optimize your efforts:
Engagement metrics
Some of the first things we look at when measuring and analyzing the value of our efforts are touchpoints: how are your prospects finding you and in what ways are they interested in your business? Use these following metrics to gauge your reach:
1. Organic traffic
How did you get to this blog post? Was it a link in your morning “Read this if you want to be successful!” newsletter, or did you find your way here on your own? Paid traffic is a direct result of paid content, such as sponsored content, pay per click advertising, and display ads. Organic, or unpaid, traffic looks at how many people have found you on search engines such as Google and Yahoo. Your content is a reflection of your business, so having the right content marketing and search engine optimization (SEO) strategies can work wonders for getting more leads to find their way to you.
2. Bounce rate
Your leads have found you, but are they staying on your site? Bounce rates are a percentage of single sessions, or how many visitors have come to your site and then left (or bounced) without seeing what else you have to say. A good bounce rate ranges between 26 and 40 percent and indicates relevant, engaging content that keeps your visitors’ attention.
Understanding how visitors have found you and what they’re doing once they do is a good start to converting unknown prospects to leads.
Performance metrics
As you cast your rod and reel in your line, you need to track what it brings in. Use the following KPIs to understand the effectiveness of your marketing efforts and the quality of their specific returns:
3. Return on Marketing Investment (ROMI)
ROMI measures the productivity of your marketing campaigns by calculating their net revenue versus marketing spend. This is one of the core points of marketing attribution, because it tells you, in terms of profit, how effective your channels are at converting touchpoints to sales. Potential leads are interacting with your business through so many channels; having a solid understanding of ROMI gives you a bird’s-eye view of what you’re taking in versus what you’re giving out.
4. MQL to SQL conversion
Marketing Qualified Leads (MQLs) are prospects who have shown interest in you over other businesses. There’s a crowd of buyers at your stall in the market who have heard there’s great fish here — but how many of them will take something home? Your MQL to Sales Qualified Lead (SQL) conversion rate tells you the quality of your leads and is a useful tool for both the marketing and sales teams.
Having an effective lead scoring model is crucial to understanding how your business is converting prospects to leads, and an optimum MQL to SQL conversion rate indicates a healthy relationship between your marketing and sales teams.
Customer metrics
What’s the value of your bounty versus the time, effort, and resources you’ve put in to get it? How are these channels holding up as your business grows and evolves? Track the following KPIs to answer these questions:
5. Customer lifetime value (CLV)
CLV estimates the net profit of a customer’s entire relationship with your company, taking into account the cost of acquiring them and going beyond a simple one-time purchase to their entire revenue yield.
Marketing teams often oversimplify this KPI by lumping customers together in one group or limiting analysis to existing revenue, without considering the value of potential revenue. The better approach is to factor in customer segmentation, which considers the unique buyer persona and customer-company relationship. Applying a predictive CLV calculation provides a more robust forecast of your future sales and marketing potential.
6. Net promoter score (NPS)
While customer retention is already a widely used KPI and important for understanding how well you’re holding on to your customers, you can go beyond this by measuring customer satisfaction and the likelihood that they will recommend and promote your business. A positive NPS score is a strong indicator of organic growth, customer retention, and loyalty.
What now?
Whichever KPIs are most relevant to your business, BDO Digital’s Demand Generation group can help you take charge and optimize the performance of your marketing outreach and operations. Check out our Reports & Analytics services to learn how we can help you measure KPIs and fine-tune your marketing efforts for maximum impact.
The post Top 6 KPIs Marketing Teams Should Track — and Why appeared first on DemandGen.
