In any business venture, benchmarking the success of your campaign is important to show your client, your sales team, or your management-level bosses that it is working. So much mystery exists in the code and algorhythms that lie beneath the surface of a website and it’s marketing scheme. It’s often not easy to determine if it’s working according to plan. Marketing KPI’s are where you can show what’s going on.
Are you generating leads, sales and an ongoing relationship with possible clients? What is your Return on Investment (ROI) in relation to how much it is costing per lead?
By finding the strengths and identifying weak areas of your campaigns, you can adjust and refine your efforts in order to achieve higher standards all around. And in the end, it’s all about showing the money.
Marketing KPI’s, or Key Performance Indicators are like discovering your report card in terms of your campaign’s efficacy. Left unanalyzed, you may be making decisions (like using erroneous keywords, for example) that will take your campaign off track.
Here are the top 10 marketing KPI’s you should be analyzing
1. Calculate the value of a customer or how much a customer is worth
A customer who has retained his or her faith in a company will return again and again. Lifetime sales are like season ticket holders. They are the backbone of revenue. Lead nurturing, therefore, has always been an implicit mantra of the process.
The Internet has created an environment in which your team has the luxury of reaching out to its customers in the social arena. Different companies determine different values a customer brings. For example read this article to see how it affects Internet companies.
A simple marketing KPI formula to determine the value of a particular customer can look like this: AVERAGE REVENUE FROM A CUSTOMER-(MULTIPLIED BY) AVERAGE AMOUNT OF SALES PER YEAR FOR THIS CUSTOMER (MULTIPLIED BY) AVERAGE TIME (IN MONTHS/YEARS) THIS CUSTOMER WAS RETAINED.
2. Calculate the ROI of your inbound campaign
It is true that often it is difficult to fully realize the effect of an inbound campaign. One of our clients had a moment when a lead mentioned in passing how they had seen a blog article written by a salesperson (endorsing his knowledge and expertise, in a sense).
Can we ascribe a marketing KPI for when this happens? Probably not. But sales have always been organic in this way. A handshake, or an incidental remark can influence a sale as much as cost overhead and corporate brand.
However, calculating your ROI is a dire necessity when it comes time to show if it’s working.
3. Determine the revenue from sales
Can you identify what portion of sales can be attributed to your particular inbound marketing campaign? You need to be able to point to specific revenue and claim it as an example of your campaign.
If there is a direct mail component operating simultaneous to your digital, inbound method, then you must separate the two and claim your half. To be clear here is the difference between the two:
Inbound marketing can be:
- Web content, developed towards and SEO end
- Developing podcasts or other online broadcasts like podcasts
- Administering an SEO-driven blog
- Building visual content such as infographics
- Editing and writing premium content such as: white pages, eBooks and newsletters
- Sending lead-nurturing emails (follow up emails) to attract a lead’s interest
Outbound marketing can be:
- Sending out direct mail to postal code lists (addressed and unaddressed)
- Broadcast television advertising
- Buying media space for print ads in magazines, newspapers and billboards
- Employing telemarketing to make cold calls
- Creating pay-per-click advertising (on both search engines and social media channels), Keep in mind that PPC advertising for your free materials such as premium content and eBooks count as inbound marketing. Advertising for persuading leads to get a quote or by your product is outbound marketing.
- Guerilla-style advertising, event management, experimental campaigns, etc.
If you are using (and you should be), a Customer Relationship Management (CRM) integrated, closed-loop reporting system, you can calculate the revenue from sales. Some have suggested this formula: TOTAL YEARLY SALES (MINUS) THE REVENUE FROM INBOUND MARKETING CREATED CUSTOMERS.
4. Determine your Cost of Customer Acquisition
Both Inbound and outbound efforts can produce marketing KPI’s in order to tell how much each method costs (per lead) to enact. This is important, obviously, to show how an inbound, organic campaign can be far more cost effective than its flashy counterpart. HubSpot claims that inbound marketing leads cost on average 60% less than outbound marketing leads, but you should test and measure it for yourself.
When looking at your Marketing KPI for inbound campaigns, costs can be:
- Hours of work to generate creative and technical material
- Purchasing and Development of software / technology
- Any general expenses (i.e.: design, purchased photos, ect.)
When looking at your Marketing KPI for an outbound counterpart, consider:
- Media space for advertising
- Creative costs incurred from advertising houses
- Distribution of materials (snail mail costs)
- Hours of work to generate sales and marketing materials
- Again, any general expenses
With these elements of cash expenditures in mind, it is easy to see which categories are costing the most while which are yielding the most in terms of revenue. In some cases, for example, ColdAd has shown a year-to-year parity of lead generation for its clients. However, the major marketing KPI we could show was how much less was spent to generate those same leads using inbound methods over their direct mail methods. For example, read this inbound marketing case study to see how we were able to generate the same number of leads but with 60% less marketing budget. Even though that 40% still can generate organic traffic for upcoming years.
5. Show traffic to lead conversion rates and ratios
Know and show where your leads are coming from. One marketing KPI is being able to describe the activities of leads before and after they come to a website. Then, ultimately, you must be able to show the conversion rate of this traffic becoming leads. It is standard to see between a 2 to 4 percent rate. What’s yours?
6. Show lead to customer conversion rates
When your team closes on a lead, you need to know. Knowing the quantity is a marketing KPI that discloses the rate at which your campaign is working.
Is your campaign capturing leads? If so, how many? Is your CRM getting these leads to sales at the right moment? If not, consider altering your methodology. What is the closing rate of your system? Can it be higher?
In order to make a proper report of your conversion rates, you also need to categorize them appropriately:
- Sales Qualified Leads. A lead who is at the final stages of the purchase cycle. After seeking a quote (for example), this lead will mostly likely be ready to “Contact Us.”
- Sales Accepted Leads. Sale opportunity-ready. They have been contacted directly by the sales team is in negotiations to close.
It may be easy (and perhaps more cost effective than some methods), to pay for adwords PPC campaigns. It may be easy and effective to advertise on Facebook. Your team will be thankful for all the new leads that you have generated.
But it is your responsibility to know exactly which campaign has generated these new leads, new clients and general brand awareness.
7. Work out what percentage of traffic is from organic searches
Metrics associated with organic searches prove the effectiveness of your SEO strategy. These can include:
- How many customers or leads came from organic searches?
- What percentage of your traffic came from branded keywords?
- And what percentage came from unbranded keywords?
These three factors can help to determine what level of activity and business came directly as a result of your campaign.
8. Show the conversion rates of your landing pages
To convert well, your landing pages have to be effective. They must be properly worded and laid out for ease of use. When a visitor fills out a form, for example, you have the opportunity to prove a marketing KPI by showing that the landing page is doing its job.
If, however, this category looks sparse, this can mean that your page has content that requires improvement. Or perhaps your form is too complicated. Even consider the loading time of the images on that page.
Consider this: Conversion rates of around 10-20% are an average that you should try to meet.
This is the time to benchmark your success and make critical changes where required. Performing an A/B test can help determine (for example), the best layout of the landing page, as well as other aesthetic and navigational choices.
9. Highlight mobile traffic conversion rates as well
Smartphones and tablets are accounting for more web browsing traffic than ever. If your site isn’t optimized for mobile devices, you’re missing a key demographic. It’s not simply about the amount of traffic that’s moving to your mobile device optimized site. It’s also about simply seeing how effective your presence there is.
Answer these questions and see:
- How often to visitors “bounce” away when accessing your site from a mobile device?
- What is your conversion rate for:
- Mobile phone traffic
- Landing pages optimized for mobile devices
Also keep in mind that not all solutions work for everyone. For example, we decided against having a mobile responsive website for one of our insurance clients. Why? Because on average, young visitors use mobile devices to visit an insurance website to get a quote, and they are likely to be considered a higher risk client (for insurance providers). Therefore, by NOT optimizing for mobile, we tried to avoid the traffic from this demographic to their website.
10. Show your social media presence
Again, this is an area that is sometimes seen as intangible. Probably because social media has such a life of immediacy. Tweets and status updates change from minute to minute. It’s hard to determine the long-term effects of a tweet. However, what you can analyze can speak volumes as to the power you wielding when it comes to social media. Therefore, it is an essential marketing KPI and must be addressed.
When it comes to “Likes” and “Followers” and “Retweets” you can always show your sales or management team the growth rate in that area. Of course you can show:
- The percentage of leads that come through social media channels
- The percentage of customers generated through those channels
- The general traffic and activity coming from those channels
This is also a good time to consider a marketing KPI to determine which social media outlets are the most effective and which ones were less so.
So show the numbers. Create charts outlining the degree to which each social media channel has produced a desired effect. Then consider the cost of continuing to work in those arenas. You may very well decide to cut Pinterest out entirely, for example.
Conclusion: The good and the bad news
At the end of the day, inbound campaigns rely upon constant vigilance. All content, web pages, blogs, tweets, pay-per-click ads, banner ads, landing pages, web forms are only as effective as the last set of analysis.
You must listen to the metrics and change where change is needed. What was once your main keyword may in fact be shifting in importance and if you don’t adapt, you’ll extinct your efforts.
The bad news is: This is your valuable business, but it’s also a grand experiment. Nothing is entirely predictable and certain. Risk is part of any campaign’s equation.
The good news is: You can update your ideas and refine your approach on an hourly basis. So change with the times. Unlike an outbound media campaign, once the flyer’s been sent, it’s not coming back.
Do you have any other marketing KPI’s in mind? What else we should consider?