Looking to learn about KPIs and how you can use them to improve your marketing? Then this article is for you!
- What is a KPI in marketing?
- KPIs vs marketing metrics
- How are KPIs used to measure performance in marketing?
- 20 examples of essential KPIs for marketing
What is a KPI in marketing?
KPI stands for key performance indicator.
A KPI in marketing is a measurable value tied to specific objectives of a marketing campaign.
KPIs help measure marketing effectiveness at the end of a campaign.
KPIs vs marketing metrics
Isn’t KPI the same as marketing metrics?
No, it’s not and you must be able to know the difference between KPIs and marketing metrics.
Marketing metrics are measurable values that include everything from the number of followers of the brand’s page on Facebook, Instagram, YouTube, TikTok to website traffic, email subscribers, MQL (marketing qualified leads) and the list can continue. It’s everything you can measure at any given time.
The KPI belongs to the marketing metrics category, it is indeed a marketing metric itself.
The difference is that the KPIs are tied to a specific goal of a specific marketing campaign whereas marketing metrics are not tied to a specific goal of a specific marketing campaign.
Every marketing campaign has one or several marketing goals. To measure how effective your campaign was to achieve your goals, select the appropriate KPIs.
How are KPIs used to measure performance in marketing?
Before we talk about how to use KPIs to measure and track performance in marketing campaigns, it’s essential to understand the brand’s business goals and objectives.
You cannot measure progress if you don’t know what progress looks like. Or what success means for your business.
So, if you are the leader of your team, share the brand’s business goals for 2021 with your colleagues.
They could focus on revenue (increase sales), suppliers (replace old suppliers with new, more performant ones), employees (reduce employee turnover), profit (increase profit margin) or market (increase market share).
Once everyone in your team is aware of the business goals they need to achieve, you can move on to the next step: establishing marketing goals.
Here are some of the common marketing goals:
- Increase Brand Awareness
- Lead generation
- Promote new products/services
- Target new customers
- Increase website traffic
- Grow your email list
If your business goal is to increase revenue, what marketing campaigns your team needs to create and run in order to achieve it?
You could consider implementing several marketing campaigns. For example, a marketing campaign targeted at new customers or a marketing campaign targeted at your current customers with the goal of upscaling. What would you like them to do: buy more in quantity or buy products that are more expensive?
The KPIs tied to this particular marketing campaign could be 20% new leads generated or 20% customer conversion rate.
20 examples of essential KPIs for marketing
Here are 20 essential KPIs that you should track to measure your marketing performance:
- Email open rates
- Email click-through rates
- Email forward rates
- Newsletter signup conversion rate
- Social media engagement rate
- Social media conversions
- New leads generated
- Cost per lead
- Customer lifetime value
- Returning website visitors
- Goal completion rate
- Marketing revenue attribution
- Customer acquisition cost (CAC)
- Landing page conversion rates
- Traffic-to-lead ratio
- Lead-to-customer ratio
- Customer retention
- Content downloads
- Referral traffic
- Net promoter score
1. Email open rates
You worked hard to gain new subscribers to the company’s newsletter, but all is in vain if your emails remain unopened. Optimize your headlines. Are you sending too many emails per week? If you do, but your subscribers don’t click the unsubscribe button then they wish to receive your emails but they are too often which leads to fatigue.
2. Email click-through rates
Your subscribers are opening your emails – that’s great! One of your email campaign goals is to drive website traffic so the email clickthrough rate is an important KPI. If you note this particular indicator is unsatisfactory (what value did you set for email clickthrough rates?) because the subscribers are not clicking on the links, you should consider the content and the copy. Is the linked content relevant to subscribers? Re-write the copy: don’t use learn more to persuade the subscriber to click the link. Get creative!
3. Email forward rates
The email forward rate is one of the most important KPIs if you are looking to grow a community for the brand. Opening the email and clicking on the content links inside is one thing, but making your message so relevant to your subscribers that they forward it to someone else is a great achievement.
4. Newsletter signup conversion rate
How many people did your email subscribing campaign convert? This KPI shows how well you were able to find a match between the brand’s offering and their interests, to speak to their values and show them your solution to their pain points.
5. Social media engagement rate
They say liking a post is the easiest engagement action that your followers can take whereas commenting is the hardest. Having followers that take the time to express their opinion in a comment to your post is more valuable than receiving likes. It also tells the algorithm that this piece of content is sparking conversations which prompts it to show your post to more people.
6. Social media conversions
It’s nice to have a big number of followers on social media accounts, preferably in the millions. It is an indicator that the brand is popular and a lot of people want to stay connected with the brand. After having said that, let’s also not forget that the algorithm shows your content to a small number of people. Some say it’s 1% or 2%. So this vanity metric is a nice-to-have feature, but it is not essential. What is instead relevant is how many conversions does your social content drive? How many clicks to website? How many email subscribers? How many leads does it generate?
7. New leads generated
Generating new leads is paramount for every brand. You need to constantly show your products or services to new leads gently nudging them to the next step in your marketing and sales funnel.
8. Cost per lead
Lead generation is important, but if the cost of acquiring leads is high, you need to take a step back, analyze every stage of the process and see where you can improve it. The Pirate Funnel may help you pinpoint where your business is losing customers. Check it out!
9. Customer lifetime value
Customer lifetime value is the total revenue you can expect from a customer during the period that they remain a customer. Or simply put: how much are they worth to your brand? For example, Amazon Prime members are worth twice as much as non-Prime shoppers. Prime shoppers spend $1,340 annually, more than twice as much as non-Prime shoppers, who spend $650 annually.
10. Returning website visitors
Having a good amount of website traffic is necessary if you want to run ads, show up in organic search results and gain email subscribers. Your website is owned media, it’s where you control the content – your brand is not at the mercy of any social media algorithms. It’s important to measure the number of new visitors your website gets every month. But equally important is to track how many visitors return to your site. Returning visitors tell you that your website is a relevant and valuable resource for them. It’s how your brand stays top of mind. It’s also easier to convert returning visitors to leads and then customers.
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