Marketing can be a whirlwind of activity. In a world of big data and constant innovation, knowing which marketing metrics you should track can be tricky. After all, you’ve spent time and effort (and money!) on putting your marketing strategy together – shouldn’t you be able to measure its success?
Any business that is serious about marketing needs to understand the importance of tracking marketing KPIs. By monitoring suitable KPIs in marketing, you can make data-driven decisions that will help fine-tune your marketing strategy and achieve your business goals.
Are you unsure which marketing KPIs are the most important for your business? If so, keep reading for a crash course on marketing metrics and how to track them.
What is a KPI?
Before we get into which marketing KPIs you should track, let’s start with the basics. A key performance indicator (KPI) is a metric that measures the progress made toward predetermined objectives. KPIs can be financial or non-financial, depending on the industry and business goals.
Depending on your business, you’ll want to track different KPIs. For example, a financial KPI for a company might be revenue growth. A non-financial KPI might be customer satisfaction. But why are marketing KPIs important – and why should you give them the attention they deserve?
Why Marketing KPIs are Important
Keeping tabs on marketing metrics, specifically KPIs, is essential for any business focused on marketing. While marketing KPIs can vary depending on the size of your business, industry, and goals, they all share one common theme: to help you assess whether your marketing strategy is working.
Marketing KPIs allow you to monitor progress and make informed choices about your marketing efforts. Aside from the clear business-focused benefits, tracking KPIs is vital for various reasons.
Set Measurable Marketing Goals
When you, or your marketing team, initially developed your marketing strategy, you likely set goals. These could have been short-term goals, like increasing website traffic by X% in the next month. Or, they could have been long-term goals, like growing your email list by X% within two years.
Whatever the aim, it’s important to establish KPIs to help you measure any progress made. Having measurable marketing goals is the first step in tracking your marketing KPIs – without a plan, you won’t know what success looks like.
Get an Outside Perspective
Like most business owners or marketing professionals, you likely wear many hats. You might be responsible for strategy, execution, and analysis – all while trying to stay on top of the latest industry trends. It can be tough to take a step back and objectively assess your marketing performance when you’re close to the daily grind.
This is where marketing KPIs come in handy. By tracking specific KPIs in marketing, you can get an outside perspective on your marketing performance. This external view can help you see where your marketing efforts are falling short and where you need to make changes.
Make Informed, Data-Driven Decisions
When it comes to marketing, not all decisions are created equal. Some choices may be viewed as fairly insignificant. Whereas other decisions, like pursuing a new marketing channel or investing in a specific marketing campaign, can significantly impact your bottom line.
Making informed, data-driven decisions about your marketing strategy is essential for any serious business. By tracking the proper marketing KPIs, you can gather the data you need to make intelligent business moves – like where to allocate the budget to help your business grow.
Online tools like Semrush and HubSpot help you keep the overview, so you never lose track of key data points. Making informed, data-driven decisions becomes much easier as a result.
Prove the Value of Your Marketing Department
Marketing is often seen as a ‘nice to have rather’ than a ‘need to have’ by some brands – especially small businesses. Having this mindset can make it tough to justify marketing spend or even the need for a marketing department.
One way to prove the value your marketing department provides is by tracking marketing KPIs. By demonstrating the impact marketing has on key business metrics, like website traffic or sales, you can easily justify marketing investment. This way, you can ensure that your marketing department has the resources it needs to be successful.
Keep Everyone Accountable and Motivated
Whether you have a whole marketing team or are flying solo, keeping everyone accountable for their work is essential. Without accountability, it can be easy for team members or yourself to become discouraged or demotivated. And when team members are disengaged, they begin to withdraw, and their productivity declines.
One way to keep everyone accountable and motivated is by tracking marketing KPIs. By setting goals and regularly monitoring progress, you can ensure that everyone is working toward the same objectives – and that they see results for their efforts.
Tracking KPIs can also help you identify areas where team members might need additional training or support. By keeping everyone motivated, you can help ensure that your marketing campaigns are as effective as possible. Plus, it keeps you in touch with your employees and ensures they feel fulfilled.
What Should Be Tracked in Marketing?
Aside from focusing on specific metrics, which we will cover next, you must understand the categories these marketing KPIs fall into.
As a business in this day and age, you are most likely focusing your efforts on digital marketing. And while this is a great way to connect with more consumers, print media and other marketing strategies are not gone for good – although it can be harder to track these methods.
There are 4 main types of marketing metrics that you can monitor. Most KPIs will fall under one of these categories, so if they are relevant to your business, you should be following them:
SEO Based Marketing Metrics
Search engine optimization (SEO) should be a key focus for any business with an online presence. After all, if potential customers can’t find you when they search for your product or service, you’re losing out on valuable leads. Measuring SEO marketing metrics is smart and essential for any business wanting to succeed online.
Social Media Marketing Metrics
Social media is a fantastic tool – but only if used correctly. You need to track the right social media metrics to make the most of your social media marketing. This will help you understand what’s working and not, so you can adjust your strategy accordingly.
Paid Advertising Metrics
Paid advertising can be a great pathway to reach new customers and grow your business. But it’s important to track the right metrics to ensure that your campaigns are effective. After all, you don’t want to waste money on ads that don’t generate results.
See here our article on the differences between marketing and advertising.
Website Performance Metrics
Your website is usually the first point of contact between you and your potential customers. That’s why it’s so essential to track website performance metrics. By understanding how people interact with your site, you can make changes to improve the user experience – and increase leads and sales.
12 Common Marketing KPI Examples
Now that we’ve discussed the importance of marketing KPIs, let’s look at some specific marketing KPI examples. These are some of the most important examples, but the ones you should measure will depend on your specific business goals.
1. Website Traffic
If you want people to buy from you, they need to be able to find your website. Whether you gain traffic from a new social media campaign, your blog, or an old-fashioned print ad, website traffic should be one of your top marketing KPIs.
You can track website traffic using Google Analytics or another web analytics tool. Once you have this data, you can then dig deeper to see the following:
- Where your website visitors are coming from
- What pages people looking at
- How long potential customers stay on your site
You can use this information to learn how to attract more website visitors and convert more leads into customers.
2. Qualified Leads Generated
Another important marketing KPI is the number of qualified leads generated. This metric shows how effective your marketing is at attracting new leads and customers. You can track leads generated using a customer relationship management (CRM) or marketing automation tool.
Once you have this data, you can segment your leads to see which ones are most likely to convert into customers. This information can help you fine-tune your marketing campaigns to attract high-quality leads. Ideally, you should be attracting leads that fit your ideal customer profile – this way, you’re not wasting time or money marketing to people who are unlikely to buy from you.
3. Customer Acquisition Cost (CAC)
Customer acquisition cost (CAC) is the money you spend to acquire a new customer. When analyzing KPIs in marketing, it can be easy to overlook the CAC when focusing on other KPIs, such as leads, as previously mentioned.
But, the CAC is an important marketing metric to track, as it can give you insights into the efficiency of your business strategy – and how much it costs to move your customer down the sales funnel.
To calculate your CAC, divide your total marketing and sales expenses by the number of new customers gained in a given period. For example, if you spend $100,000 on marketing and sales monthly and acquire 100 new customers, your CAC would be $1,000.
4. Return on Investment (ROI)
Specific KPIs for marketing go hand in hand. This is the case with website traffic and leads generated. It’s also true of customer acquisition cost (CAC) and returns on investment (ROI). Your ROI measures how much profit you’re making relative to how much you’re spending. ROI can apply to anything you spend money on, such as ads or influencer marketing. See here for our extensive guide on influencer marketing.
To calculate your ROI, divide your total expenses by your total revenue. For example, if you spend $100,000 on marketing and sales monthly and generate $1 million in revenue, your ROI would be 10%.
Generally speaking, a higher ROI is better. But it’s important to remember that many factors can affect your ROI – such as the type of product you’re selling, your target market, and the current economic climate.
If you aren’t achieving the ROI you want, don’t be discouraged, and certainly don’t abandon your marketing efforts. Instead, take a closer look at your marketing strategy and see where you can improve.
5. Total Sales
Of course, one of the most important marketing KPIs is sales. This metric tells you how effective your marketing is at generating revenue for your business. How you track sales will depend on your company – if you’re an eCommerce store, you can use your shopping cart software. Or, you can track sales using your point-of-sale system if you’re a brick-and-mortar business.
When you have this data, you can easily see which products or services sell the most. This information can help you adjust your marketing strategy to promote your best-selling products or services.
6. Customer Retention Rate
What is a business without loyal customers? Not a very successful one! That’s why customer retention is such a vital marketing KPI. This metric tells you how well you’re retaining your existing customers.
There are many ways to track customer retention, such as calculating your customer churn rate (the customers who stop doing business with you in a given time) or the number of repeat purchases made by each customer.
Whatever method you choose, customer retention data can give you valuable insights into the effectiveness of your marketing. If you’re losing customers, you must look closely at your customer journey to ensure no holes or friction points. If you’re retaining customers, you’re likely doing something right – so keep up the excellent work!
7. Email Campaigns
According to Forbes, email is still one of the most effective marketing channels. Sending emails allows you to personalize your message and keeps your brand at the forefront of your customer’s minds.
When tracking the success of your email campaigns, there are some key metrics you should focus on. Such as:
- Open rate: the number of people who open your email
- Click-through rate: the percentage of people who click on a link in your email
- Unsubscribe rate: the number of people who unsubscribe from your email list after receiving one of your emails
By monitoring this information, you can get a good idea of how effective your email campaigns are. For example, if your open rates are low, you might need to work on making your subject lines more compelling. Or, if your unsubscribe rate is high, you might want to look closer at the quality of your content.
8. Social Engagement
In today’s world, social media is a powerful marketing tool. It allows you to connect with your customers and create a community around your brand. Some ways to measure social engagement can include:
- Amount of new followers over a certain period
- How many comments your posts receive on average
- Total content shares
- The number of people who have joined your social media groups
You can also track how often your brand is mentioned on social media and the sentiment of those mentions (positive, negative, or neutral). This information can give valuable insights into how your customers perceive your brand.
If you’re not getting much engagement on your social media posts, you might need to create more interesting or relevant content. Or, if you’re getting a lot of negative sentiment, you might want to take a closer look at your customer service procedures.
9. Net Promotor Score (NPS)
The net promoter score (NPS) is a metric frequently used in marketing that measures customer satisfaction. It’s a simple way to track whether your customers would recommend your product or service to their friends or family.
You can calculate your NPS by asking your customers how likely they are to recommend your business on a scale of 0-10. Customers who answer 9 or 10 are considered ‘promoters,’ 7-8 are ‘passives,’ while those who answer 0-6 are considered ‘detractors.’
Your NPS score is calculated by subtracting the number of detractors from the promoters. Let’s say you send out a survey to 100 customers, and 10 of them are detractors, 10 are passives, and 80 are promoters. That would give you an NPS score of 90.
NPS can be a valuable metric for tracking customer satisfaction over time. If you find that your NPS score is declining, it’s an indication that you need to take a closer look at your product or service.
10. Bounce Rate
The bounce rate is the number of people who leave your website after viewing only one page. A high bounce rate indicates that people are not finding what they’re looking for or that your website is irrelevant to their needs.
There are several ways to reduce your bounce rate, such as improving your website’s design, making sure your website loads quickly and ensuring that your content is relevant and exciting.
11. Customer Lifetime Value (CLV)
Customer lifetime value (CLV) is the total amount of money a customer will spend on your business throughout their relationship with you. A number of factors contribute to CLV, such as the price of your product or service, how often your customers need it, and how long they continue to use it.
CLV is a beneficial metric for businesses because it allows you to see how much revenue you can expect to generate, from each customer, over time. This information can help you decide on pricing, marketing, and product development.
12. Conversion Rate
There are various conversion rates your business can track, with some relating to more than one marketing objective. Some traditional conversion marketing KPIs you will want to monitor are:
- Landing page conversions
- Email conversions
- Social media conversions
Basically, anything a potential customer touches, be it a webpage form or a Facebook ad, can be counted as a conversion marketing KPI. If you find your conversion rate is low, you can try testing different elements within your marketing campaigns, such as the copy, images, or call to action.
How To Implement KPIs Successfully
Now you know some of the most crucial marketing KPIs businesses can track. But how do you actually go about implementing them successfully?
Here are a few tips:
- Set realistic goals: Don’t try to track too many KPIs at once. Start with a few that are most relevant to your business and your current objectives, and then expand from there.
- Make sure your data is accurate: To make good decisions based on your KPIs, you must ensure that the information you’re collecting is accurate. This means using reliable sources and tracking methods.
- Use KPIs to inform your decisions: Don’t just track KPIs for the sake of it. Use the data you collect to inform your marketing decisions going forwards.
- Communicate with your team: Make sure everyone on your team knows which KPIs you’re tracking and why. This will help ensure that everyone is working towards the same goals.
- Review your KPIs regularly: You should review KPIs regularly to check they’re still relevant and provide helpful information. Don’t forget to adjust your KPIs if you make changes to your business or objectives.
Common Marketing Metric Mistakes to Avoid
When running a business, mistakes are inevitable. But when it comes to tracking marketing KPIs, there are a few common errors that you’ll want to avoid.
Here are some examples:
- Ignoring marketing KPIs: You’d be surprised how easy it is to ignore KPIs in marketing, especially when they show your expertly crafted campaigns aren’t bearing the expected fruit. But tracking KPIs is essential for understanding what isn’t working so you can make any necessary changes.
- Not measuring KPIs at all: While it’s best to just focus on a few valuable KPIs, it’s better to measure some than none. The key is to find the right balance for your business.
- Focusing on vanity metrics: Vanity metrics make you feel good but don’t provide any useful information. For example, if you’re only tracking social media likes – that’s a vanity metric. While it’s fine to observe some vanity metrics, you should mainly focus on KPIs which give you insights into things like customer behavior and conversions.
- Not tracking specifics: Your KPIs in marketing may be very different from another business’s KPIs. This is because every company has different objectives. Ensure you’re tracking KPIs relevant to your specific business goals.
- Focusing on perfectionism: It’s okay to strive for the best – for both your business and your team. But don’t let the quest for perfection prevent you from making progress. The most important thing to remember when monitoring marketing metrics is you aren’t seeking perfectionism but progress.
Final Thoughts on Marketing KPIs
If you’re not already tracking KPIs in marketing, now is the time to start. By monitoring the correct KPIs, you can gain valuable insights into your business – helping you to make better decisions and achieve your objectives. By following the tips outlined in this article, you’ll be on your way to successfully tracking marketing KPIs in no time!