Marketing measurements: KPIs you should be tracking
Want to measure the success of your business’s marketing campaigns? Time to start tracking these key performance indicators.
Key performance indicators (KPIs) — metrics by which you define success — act as a marketing control system so that you can identify what works and what doesn’t. When deciding which metrics to track, set a business goal and then ask yourself how each KPI correlates to that goal and also what time frame you’re measuring. KPIs will vary for different industries, but there are essential values all business owners should consider.
1. Sales revenue
“Revenue is one of the most important metrics to measure,” says Brian Dean, SEO expert and Founder of Backlinko. Tracking your sales revenue shows you how successfully you’re meeting your bottom line. You can use a sales analysis report to track, measure, and analyze the money coming in and make sure you’re hitting your revenue KPIs. Once you have a baseline of your sales revenue, you can discover which efforts are helping to increase your sales and what efforts need to be cut or modified.
Another KPI that Dean calls out as a top metric is sales leads, which, like revenue, can also affect your bottom line. The more leads you have, the more conversions to sales you’re likely to get. You can measure leads by tracking the number of names, email addresses, and phone numbers you collect from your marketing efforts. As you track and analyze leads, you may want to define what a quality lead looks like for your business to ensure you’re measuring valuable KPIs.
3. Conversion rates
To begin tracking conversion measurements, you might want to calculate the traffic-to-lead ratio. In the digital world, you’ll need to understand the origin of your website traffic — organic, social media, or referrals — to focus marketing efforts and measure leads coming from your top channels. If you find that you have high traffic but a low number of leads, you may need to revise your website content and design. Make sure that navigation is intuitive and you’re getting the right type of traffic. Additionally, if you’re measuring conversion rates, you might look at lead-to-customer ratios and landing page conversions.
4. Organic traffic
An efficient and cost-effective method to gain leads, organic search allows you to target customers who are already looking for your products or services. You can use free tools such as Google Analytics to measure the performance of your search engine optimization (SEO) efforts. You can track how people are accessing your site — whether they’re coming from search engines and what pages they’re landing on. If you find that customers rarely stumble upon your site through organic search, consider investing in content marketing on your website, as unique, relevant, and engaging content is one of the most valuable ways to increase your search engine ranking.
“Most people struggle with SEO because they spent too much time messing with their title tags and site-speed and not enough time publishing content that meets a searcher's needs,” says Dean.
5. Acquisition costs
If you want to measure the return on investment (ROI) of your marketing efforts, you’ll want to determine your cost per acquisition — calculated by dividing marketing expenses by the number of customers acquired in the period the money was spent. Ideally this cost will stay low, but if you notice it gradually increasing you’ll need to identify where you’re losing customers or why your marketing costs are rising. If you’ve implemented customer relationship management software at your company, you can review customer data and information to see if something’s changed. You can also elicit customer feedback to gauge your customers’ satisfaction levels.
Not all KPIs are created equal. According to Dean, one of the biggest mistakes a company can make is investing money in vanity metrics like followers on social media or page views. “Yes, these metrics can be important in some cases,” he says. “But in general, the biggest KPIs that impact your bottom line are traffic, leads and sales.”
If you’re ready to expand on your marketing strategy, consider these tips for lead generation.