Measure Your Marketing Success with Confidence
As a marketing professional, someone in the marketing space, or a key player that works with marketers, you’re likely aware of different ways to assess success when it comes to your company’s marketing campaigns and strategies. Even if these measurements aren’t always said by name (or acronym), it’s probable you talk about sales through marketing, customer conversions, marketing spend, and so on.
With that said, if you want to ensure your marketing team is hitting the mark(s) and knows all the most important and telling marketing KPIs, look no further. In this blog, we’re giving you our top 10 marketing KPIs that we think marketers, marketing teams, and other key players should be aware of. These help us (and can help you) ensure your company’s marketing efforts are working.
What are Marketing KPIs?
Marketing KPIs, or Marketing Key Performance Indicators, are measurements that help you gauge the success of your tactics and make business decisions. Without specific measurements like these, it can be difficult to stand back with the full picture in view.
If you want to strategize and execute quality marketing tactics, it’s important to pay attention to KPIs – especially those that help you build a quality marketing framework and set of plans. With the right KPIs in focus, your business can identify which practices are working, which are not, and which ones have the biggest impact on your goals.
Top 10 Marketing KPIs (You Should Know)
Sales Revenue
Although “Marketing” isn’t in the title of this metric – knowing sales is key to understanding if your marketing tactics are working. “Reporting for the sake of reporting is pointless. Reporting should lead to increased profits.” Your sales revenue should be higher (if not much higher) than your marketing expenses.
Return on Investment (ROI)
ROI = (Sales Revenue – Marketing Investment) / Marketing Investment
Although it’s not the only metric to focus on, return on marketing investment is very important to keep track of. This is a general KPI that helps you understand how to go ahead with your marketing budget and plans.
Although this metric is important, it’s not the most cut-and-dry. What do we mean by this? Often, sales members must turn your marketing leads into successful customers to have a successful ROI. Additionally, “it can be hard to directly attribute sales growth to a marketing campaign.” If so, “subtract your average organic sales growth and marketing cost from your sales growth and then divide it by your marketing cost.”
Marketing Revenue Attribution
This metric measures the revenue that your marketing campaigns have brought to your company. It’s key, because it helps you understand if and how much your campaigns are contributing to your overall revenue. To better understand attribution as a whole, check out this Strata YouTube original video.
Customer Acquisition Cost (CAC)
Spend / Customers = $CAC
This measurement is the total cost of acquiring a single customer and includes both sales and marketing costs. It’s important to calculate this cost for all marketing tactics – including outbound, print, digital marketing, and so on.
If the CAC is too high, you may want to reevaluate your tactics, focus on specific ones, and stop conducting practices that don’t acquire customers.
Customer Lifetime Value (CLV)
Specific Calculation: Spend x Expected Years = CLV
Generic Calculation: CLV = Avg. Sale Per Customer x Avg. # of Times a Customer Buys Per Year x Avg. Lifetime of a customer
The CLV is an estimate of the total revenue expected from just one customer over their entire relationship with your business.
This metric is also not as cut and dry as other measurements, as it’s usually (as stated previously) an estimate, but it can really aid in business decisions and help you decide where it’s best to use your marketing and sales resources, and what resources are most important.
Additionally, the more revenue you can get out of existing customers, the more you can put into acquiring new ones, so understanding this metric can give you a better idea of where to focus your budget (whether that’s customer retention tactics and lead nurturing campaigns, customer acquisition strategies, or something else).
Conversion Rates
A conversion rate is the percentage of potential or current customers that complete a desired action – whether that’s filling out a form, providing an email, clicking through to a company page, adding items to a cart, or buying.
For example, if out of 100 website visitors, 20 make a purchase, your conversion rate is 20%.
As mentioned, a conversion rate can be a measurement of many things, including:
- Purchases
- Ad Clicks
- Website Visits
- Follows
- Sign Ups
- Email Opens
- Social Media Engagement
High or low conversion rates can help you decide where to allocate marketing spend, what practices to continue, and what marketing tactics to possibly stop all together. Additionally, A/B testing can always help you to understand what causes conversions, so if you’re unsure why something isn’t working, always test first.
Churn Rate
This metric is the rate that customers drop off from buying your products or using your services. For example, if your business has 30 regular clients, and 3 stop working with you (over the span of a year), your company’s churn rate is 10%.
A high churn rate is obviously a negative thing, but a churn rate in general, is bound to happen. No matter how hard you try, it’s unlikely you’ll keep all your customers forever.With that said, a high churn rate can call for larger conversations and big changes for marketing and sales tactics.
Lead-to-Customer Ratio
Leads just aren’t that important if they don’t turn into customers. This ratio is the percentage of leads that become customers. If your lead-to-customer ratio isn’t looking good, you likely want to ask yourself and your team:
- Are the marketing tactics we’re using bringing in the right leads?
- Are leads being successfully passed off to sales (at the right time)?
- How is our close rate?
Although this is an important marketing KPI, this measurement is often more about sales than it is about marketing. It’s important to periodically assess your company’s sales and lead qualification processes to ensure you’re getting the best possible lead-to-customer ratio.
Return on Ad Spend (ROAS)
This metric is used to measure the success of your ad campaigns. It usually appears as a ratio of the revenue per dollar spent on a campaign and tells you how well the specific campaign performed (and if the investment was worth the outcome).
Net Promoter Score (NPS)
Your NPS measures customer satisfaction, and more specifically, the likelihood of customers recommending your business to others.
It’s vital to listen to what your customers have to say and understand their wants, needs, opinions, and so on. After all, they’re your company’s lifeblood – and if you support them, they’ll support you.
Notable Mentions
While traditional KPIs play a crucial role in measuring specific aspects of your marketing campaigns, there are also some honorable mentions that serve as overarching indicators of success, particularly within digital channels.
Website Traffic
This encompasses the number of visitors to your website and can be further segmented into metrics such as total visits, unique visitors, and page views. Monitoring website traffic provides a foundational understanding of your online presence and audience engagement.
Organic Search Traffic
This metric measures the volume of visitors who reach your website through unpaid (organic) search results. It serves as a barometer for the effectiveness of your Search Engine Optimization (SEO) strategies in improving your website’s visibility and relevance in search engine results pages.
Social Media Engagement
Engagement metrics on social media platforms, including likes, shares, comments, and follows, reflect the level of interaction and interest generated by your brand’s content. Monitoring social media engagement helps gauge the resonance of your messaging and the strength of your community.
Brand Awareness
Metrics related to brand mentions, social media mentions, and brand sentiment provide insights into the awareness and perception of your brand among your target audience. Understanding brand awareness metrics helps evaluate the effectiveness of your marketing efforts in building recognition and fostering positive associations with your brand.
While these metrics may not fit neatly into the traditional definition of KPIs, they are important to consider when assessing the holistic impact of your marketing campaigns and guiding strategic decision-making in the digital landscape. Hoping to gain a better understanding of the success of your marketing, or better yet – are you interested in working with the experts to achieve greater marketing success? Reach out today.
A Strata YouTube Channel Original
Multichannel campaigns can be complicated to create, and once you create them, even more work needs to be put in to make them as effective as possible. In the last YouTube video of our Multichannel Marketing series, we’ll go through how to optimize your multichannel campaign for the best success and highest ROI.
What’s an Optimum Multichannel Campaign?
An optimum multichannel campaign is a campaign or workflow that converts every possible campaign member. Keep in mind – that doesn’t mean every person in the campaign, as there will always be some members that are truly impossible to convert. Why? Things happen. People start new jobs, financial positions change, people move, etc. The list goes on. The point of optimization is to optimize for what can be controlled, and in this instance, that’s the customer journey or workflow.
Two Categories of Multichannel Campaign Optimization
- Theoretical: This category happens before starting your campaign. It’s the last but usually the most time-consuming portion of actually building your workflow. It’s done through effective use of assumptions and historical data from similar campaigns. The steps to do this? Assign estimate conversion rates to each of your workflow components and then use them to calculate expected conversions – taking the output of one component as the input of the next. Although it’s very time consuming, it’s worth it in the end. Theoretical optimization helps you optimize both your campaign and create stronger projections for your campaign’s performance.
- Empirical: This category happens while the campaign runs. Instead of using historical data from other campaigns, you’ll use historical data from this campaign. So, factors like audience and creative can be held constant. You’ll still go through the same process – assigning your empirical conversion rates to each of your components, and going through the calculations to more accurately predict overall campaign outcomes. Measure your component’s KPIs while simultaneously updating projections based on the changes to your workflow.
To hear from our Director of R&D, Harrison, on what else you’ll want to do, as well as what tools you can use to optimize your campaign, click on the video below. Or, if you’d like to discuss multichannel marketing optimization with one of our experts, contact us today.
A Strata YouTube Channel Original
In this ever-changing market, not even a marketing genius can accurately gauge performance of a multichannel campaign without organized, analyzed data across channels. That is why setting and tracking key performance indicators (KPIs) is very important. Follow along as we walk you through a few things to keep in mind when establishing and understanding KPI’s for your multichannel campaign.
What’s a KPI?
Like we said above, KPI stands for key performance indicator. It’s a quantifiable measure of performance over time for a specific goal. In this case – that goal is multichannel marketing success. KPIs lay out marketing goals in the form of specific milestones to calculate progress and insights, and these insights help marketers make better decisions. In order for KPIs to be successful and helpful, a marketer or team of marketers needs to handle and record analytics from several touch-points. Without KPIs there’s no way to accurately and effectively measure the efficiency of your multichannel performance.
KPIs at Their Core: Layer One
There are two levels of KPIs for multichannel campaigns. The first layer is the component layer, and it’s used to analyze the individual components of a campaign. This layer helps establish realistic goals for the campaign and provides low level insight to analyze and optimize as your campaign progresses. Conversion rates vary by standards like industry and medium, which are easily researchable.
Yet, actual conversion rates have huge ranges based on the nature of your call to action – like your messaging, imagery, and your audience, and which segment of the funnel they’re in. If your campaign’s messaging can be considered “industry standard”, save yourself some time and use an average conversion rate, even if it looks low.
Further into KPIs: Layer Two
Want to learn about the second layer of KPIs, and how to establish them for your next multichannel campaign? Click on the video below and hear more from our Director of R&D, Harrison. Or, if you’d like to discuss this concept with one of our multichannel experts, contact us today to get your next (or maybe your first) multichannel campaign started.
