As you manage your business’ growth in 2018, pay attention to these 15 marketing KPIs.
Keep your finger on the pulse of your company’s marketing efforts without digging through spreadsheet after spreadsheet.
Most business experts shorten this concept to KPI; full-form fans say Key Performance Indicators.
If you’re new to business metrics, you’re probably wondering, “What is KPI analysis? How do I use marketing KPIs to manage my teams?”
Consider this short KPI definition: a vital statistic or data point for quick and insightful managerial oversight.
You don’t look at a large set of data, just one KPI, meaning you have time to oversee all aspects of your operation.
Pick the Right Marketing KPIs: The Hard Numbers
Only pay attention to the marketing KPIs that matter most.
Ask your marketing team (or accounting team) to update you regularly on these figures. Use the information in this article to select the right marketing data for your regular reports – and avoid information overload.
Check the business metrics in this article on a regular (daily or weekly) basis.
Use these KPI examples to understand the accounting math and business concepts that matter most to your marketing teams. With the right marketing analytics at the ready, you can keep spreadsheet spelunking sessions to a minimum.
1) Customer Acquisition Cost (CAC)
Your KPI Marketing analysis must include this metric. Learn how much you spend to gain a customer (on average) – and compare this number to your average profit per customer.
With customer acquisition cost/profit figures, you can understand how your marketing costs balance with your other operations.
To calculate your Customer Acquisition Cost, divide your Marketing Cost by your number of New Customers. (Be sure to use data from the same time period.)
CAC = MC / NC
For a more in-depth discussion of customer acquisition cost, check out our article on key business metrics.
2) Social Media Traffic
Though likes, comments, and shares can help you compare social media campaigns to each other, they often don’t tell the whole story.
Social data is a valuable source of customer intelligence.
– Penny Wilson, Hootsuite CMO
Integrate artificial intelligence and image search engine technologies into your everyday marketing activities.
Use psychographics (not demographics) to understand consumer needs – and give the people what they want.
Today’s social media analytics tools give business owners and managers unprecedented opportunities to learn more about their target audiences.
3) Conversion Rates
Depending on your industry, your target conversion rates (at the top of your sales funnel) will vary between two and ten percent.
Software companies, for example, shoot for 5-10%. Media, publishing, and financial services companies aim for 10%; non-profits and large retailers hope for 2-3%.
Further down the funnel, you must identify Marketing Qualified Leads (MQL), which later become Sales Qualified Leads (SQL).
Once people become leads by consuming free content in exchange for contact information and brand engagement, they become MQLs. Later, after passing your lead scoring tests, these people will become SQLs. At this point, they pass from your marketing team to your sales team – and hopefully become customers.
You can calculate conversion rate percentages for any measurable step in your sales funnel. For example, let’s say you had 10,000 SQLs and 1,000 MQLs. Divide the figure that comes later in your funnel by the one that appears first:
Later [1,000] / First [10,000] = Conversion Rate [10%]
4) Dwell Time
- On average, how long do people view a piece of online marketing content?
Learn about consumer behavior (and preferences) with this key business metric.
- Do people actually read your content?
- Do they click away quickly?
- Do they scan your page and look at the images, but skip your text content?
Though some content pieces need to be long (blog posts, customer resources), no one like to slog through a page to find what they want.
Match the purpose of your page (opt-ins, likes/shares, etc.) with content length to achieve optimal dwell times.
5) Bounce Rate
Closely related to Dwell Time, Bounce Rate goes a step farther. With this information, you can determine how many people click away from your entire site after viewing a page.
Your ideal Bounce Rates depend on the type of page (again, much like Dwell Time). Your FAQ and customer service pages should have substantial bounce rates.
This means users found what they needed and got on with their lives.
However, high bounce rates in marketing funnels mean you need to identify and smooth out wasteful bottlenecks.
You want to turn more leads into customers, right?
6) Goal Value
When setting sales/marketing goals, convert each consumer action into a dollar amount. In online marketing, Goal Value becomes Page Value, but let’s keep things simple with a real-life example:
Imagine you play washtub bass in a bluegrass band. In this case, your band functions as a sales team at the gig, closing leads generated by your marketing team (you, earlier in the day).
Before your gigs, you hand out fliers. One in every 100 people (1%) who take a flier from you will show up at the venue.
10% of your attendees buy digital downloads of your album at $10 a pop. Your goal value for people who take action by showing up is $1; one-in-ten of these people will buy a $10 album.
(Of course, the goal value for purchasing an album is $10.)
Going a step further, each person who takes a flier contributes (on average) a penny to your cause.
Because 1% of these people show up, their goal value ($0.01) equals 1% of attendees’ goal value ($1).
At this point, you need to make absolutely certain your fliers cost less than a penny – or improve your conversion rates. Otherwise, your revenues won’t cover your expenses and your band will lose money, fast!
7) Traffic Source Balance
When you create a content calendar, consider the value of each traffic channel you employ.
- Do you need to drive blog traffic because these readers convert easily into buyers?
- Are you better off investing in your social media presence and introducing your product/service to younger audiences?
- Would you benefit from putting more resources into your lead-generation efforts?
Regardless of the content mix you create, remember to save a small percentage for cultural events, HR resources, philanthropy, and other reputation-boosting programs.
8) Qualified Leads per Month
Feed enough qualified leads to your sales teams to maximize their chances of success.
With Qualified Leads per Month numbers, you can judge team performance based on the likelihood people will say yes.
For example, your marketing team might not provide your salespeople with enough QLM. Your sales team probably did the best they could with poor leads. Don’t focus on sales tactics – work on getting more “warm leads.”
9) Inbound Marketing Infrastructure ROI (Returns on Investment)
Maximize your investment in static assets like websites, apps, blog articles, social media platforms, customer resources, etc. Create a robust sales funnel framework for your marketing teams to streamline and optimize:
- Prospect Research – Test and optimize your lead magnet/lead gathering campaigns to pull in new customers at the lowest possible rates. Target your ad campaigns to avoid attracting people who don’t need your service – but cost money to acquire.
- Lead Generation – Remember, while outbound marketing can get quick results, inbound marketing costs over 60% less. Create an appropriate mix of these two approaches and regularly adjust this ratio to market conditions.
- Nurturing Leads – Provide leads with fresh content according to an aggressive content calendar. Keep people aware of your brand as they make purchasing decisions.
- Marketing Management – Monitor, measure, and optimize your funnel(s) for peak performance and ROI.
10) Split Testing
No matter what the platform, from Facebook Ads to Google Shopping to Etsy, you must split test your ad campaigns.
Ask your marketing teams to provide split testing percentages/ratios for each incremental change in their content. With this methodical approach, you can test your ideas on the one group that truly matters – customers.
Marketing KPIs based on guesswork and speculation aren’t really marketing KPIs, are they?
Also called “A/B Testing,” split testing involves real-world data.
Unlike focus groups, which typically provide opinions in artificial environments, split testing gets down to the nitty-gritty.
Think about it – what shows do you watch that you might not share with others?
Many of us indulge in guilty pleasures like reality television, though we might not care to admit it. Smart managers can make guesses based on survey and focus group data, but the marketing KPIs that really matter are split tested – every time.
Qualitative KPI Examples: A Soft Science
Of course, you can’t measure everything that makes your company great. According to Forbes’ Nicole Rodrigues, business owners must pay attention to these five intangible marketing KPIs:
Although you can use customer loyalty programs to reward people for sharing this information, it is rarely complete. Inspire loyalty throughout your organization by engaging with the causes your customers value.
Take genuine care of your customer-facing employees; their authentic love of your company will show through – and affect customer attitudes. Nothing builds long-term consumer relationships like that personal touch!
Some people love your brand but haven’t purchased from you yet. Lower your customer acquisition cost (CAC) by nurturing the relationships that lead to referrals.
For example, you may have impressed customers, suppliers, and retail outlets in other niches. They may not need your product/service, but they certainly refer to friends and family who do.
Affinity may be hard to measure, but the overall attraction you have to customers and admirers alike can dramatically improve your brand’s value, reputation, and longevity.
Your marketing efforts go well beyond conversion rates and CACs.
Ask yourself, what do people really think of us?
Reward your customers for written, in-depth feedback that gives you a clear sense of what they like (and would like to like) about your company.
Make charitable donations and create socially-responsible initiatives that demonstrate your genuine, long-term commitment to making the world a better place!
You earn customer trust over years of committed service; don’t break it for short-term gain. From on-time deliveries to friendly faces to product safety, nothing sells better in the long term than trust.
Your brand reputation is everything; protect it with the right legal, PR, and marketing efforts. Build relationships with customers (and all other stakeholders) to make your business stand the test of time.
Keep the likability and friendliness of your brand fresh as your business grows. We all love the personal charm of small, local businesses.
As you grow out-of-town and out-of-state, take extra care to insert an extra dose of personal connection. Healthy growth means increasing the size of your consumer community – and always remembering where you started.
How Toggl Can Help
Use our free and premium time-tracking, productivity, and report-generation software to manage your marketing teams.
Keeping track of your marketing KPIs means quickly filtering through the vast amount of data available to your company.
Use Toggl’s report-generation suite to quickly compile time use, resource, and billable hours reports. When you get the right marketing KPIs on a regular basis—and avoid all the rest—you can make solid, data-driven decisions.