When it comes to setting and tracking your marketing KPI’s, many marketers and business owners are fully aware of the usual suspects.
Sales revenue. Leads. Cost per acquisition.
But there are a number of other KPI’s that you should be tracking in order to execute a more successful marketing campaign.
No one wants to support a marketing activity that’s losing their company money. By tracking the right marketing KPI’s, your company will be able to make adjustments to various strategies and budgets.
Without the right KPI’s, your company might be reporting and making decisions based on misleading information. In addition to this article, we’ve also detailed how to fix the 6 critical marketing KPIs your boss actually cares about here.
The 10 Most Important Marketing KPI’s to Track
1. Sales Revenue
How much revenue has your inbound marketing campaign brought your company? Understanding your sales revenue is important to know how effective your inbound marketing campaign is, no company wants to spend money on something that isn’t generating money.
For the moment think of inbound marketing as pay per click, if your sales revenue from direct mail was less than the money you spent for that campaign, why would you continue using direct mail? Most likely you would move that money to other marketing activities. To determine your sales revenue from inbound marketing you would have to define what you mean by inbound and outbound marketing.
Inbound marketing activities include:
- Developing premium content
- Social media engagement
- Pay per click
Outbound marketing activities include:
- Direct mail
- Television ads
Another critical element is capturing sales data directly via your CRM integration and closed loop reporting. You can calculate your sales revenue from inbound marketing by utilizing the following calculation.
(Total sales for the year) – (Total revenue from customers acquired through inbound marketing)
2. Cost Per Lead
Not only do you want to calculate your customer acquisition costs for inbound marketing, but outbound marketing as well. How much is it costing you to acquire a customer through inbound marketing versus outbound marketing? When calculating your customer acquisition costs, it requires the integration of your marketing automation and CRM platforms as well as accounting for all relevant costs associated with ERP integration.
Calculating CAC for inbound marketing, relevant costs include:
- Manpower (creative and technical)
- Technology and software
- General overhead
Calculating CAC for outbound marketing, relevant costs include:
- Marketing Distribution
- Manpower (sales and marketing)
- General overhead
Once calculating the costs associated with your inbound and outbound marketing campaigns, you can directly account for new sales, as well as allocate particular budgets for each campaign. If you company is utilizing mostly inbound marketing, you can break down that component further by campaign types assess how successful and profitable each activity is.
3. Customer Value
With inbound marketing, there is no better way to reach out to your current customers. Not only can it help you keep in contact with leads, but it also helps reduce churn and expand your customers lifetime value.
You can calculate the lifetime value of your customers by utilizing the following calculation:
(Average sale per customer) X (Average number of times a customer buys per year) X (Average retention time in months or years for a typical customer)
A great way to increase the lifetime value of your customers is by developing lead nurturing campaigns that reach out to existing customers. Providing you and your sales team the opportunity to inform existing customers about new services, products and resources.
4. Inbound Marketing ROI
Every company wants to see their return on investment! Calculating your inbound marketing return on investment is huge to help assess your monthly and annual performance. Equally important is the ability to start planning strategies and budgets for the following year or even months. No matter what marketing activity your company is using, your return on investment will determine the future with that activity. You don’t want to continue adding money or increasing your budget for a marketing activity that is costing your company money.
5. Traffic to Lead Ratio
Understanding your website traffic, especially knowing where your traffic is coming from, whether it’s organic, direct, social media or referrals is extremely important. Is your traffic continually increasing or is it dropping? Not only do you need to ensure that your traffic is meeting the goal you set for the month, but also make sure your visitor to lead conversion rate is between 2 to 4 percent.
6. Lead to Customer Ratio
After all of your marketing efforts, it’s important to know how many leads your sales team is able to close. You will want to calculate both your sales qualified lead conversion rate and sales accepted lead conversion rate.
What’s the difference between the two?
- Sales Qualified Leads are leads considered to be sales ready based on their lead score or specific activities/triggers they completed. Most companies would consider a lead who filled out a form, such as “contact a rep” a lead who is ready to buy your service or product. For example, a waste management company with a lead who filled out the form ”rent a dumpster”, would be considered a sales qualified lead.
- Sales Accepted Leads are leads your sales team considers opportunities, and have either contacted the lead directly or a scheduled call.
This marketing KPI is extremely useful for sales and marketing to help determine how successful their campaigns are.
Ask yourself the following questions:
- Is my campaign capturing leads?
- Is our CRM successfully passing qualified leads to sales at the right time?
- Do you have a high closing rate?
7. Landing Page Conversion Rates
Is your content generating conversions? A great well to tell if your landing pages are converting visitors is to see how many people are visiting each landing page and identifying how many of those visitors are completing your lead capture forms.
One reason people might not be converting is your content! Are you creating remarkable content that will make your visitors convert into leads? If your landing pages aren’t generating conversion rates around 10-20% you might need to edit your content. Another great way to increase conversions would be to optimize your landing pages and call to actions by performing A/B tests.
8. Organic Searches
What percentage of your traffic is from organic searches?
The traffic to your site generated by organic searches can be directly correlated with your search engine optimization strategy. Some great metrics to help you identify where you organic search traffic is coming from include:
- Number of lead conversions assisted by organic search
- Number of customer conversions assisted by organic search
- Percentage of traffic associated with branded keywords
- Percentage of traffic associated with unbranded keywords
Those are four really great metrics to help your company gain a better understanding of your brand awareness, content marketing effectiveness, as well as the impact of your SEO strategy.
9. Social Media Reach
You might be wondering what your social media reach and engagement have to do with your marketing KPI’s. Well, social media is a huge component of your inbound marketing strategy, allowing you to engage and share content with users. You can show your senior management team the value of social media through the growth and engagement of your social media profiles. Social media engagement can include anything from likes, comments, retweets, shares, mentions and many more.
Metrics you can utilize to show the importance and impact of social media on your marketing efforts include:
- Number of lead conversions assisted by each social media channel
- Number of customer conversions generated through your social media channels
- Percentage of traffic associated with social media channels
So you were able to show how many leads, customers and percent of your traffic that was generated through social media marketing. However, which channel should you put more of your efforts into?
With social media sites like Twitter, Facebook, LinkedIn Google+, Pinterest and Instagram you might not have all the time in the world to effectively utilize every platform. Break down the number of leads, customers and percentage of traffic coming from each platform.
Why would you spend 10 hours a month engaging and interacting on Google+ when 55% of your traffic generated through social media is coming from LinkedIn?
10. Mobile Traffic, Leads and Conversion Rates
You cannot forget the increasing amount of traffic, leads and customers being produced through mobile devices like Smartphones and tablets. Is your website effectively optimized for mobile? One way you can tell if your company is generating traffic and leads through mobile is to calculate the following metrics:
- Number of lead conversions from mobile devices
- Bounce rates from mobile devices
- Conversion rates from mobile optimized landing pages