It’s All About the Numbers—Specifically These 8 Marketing KPIs

KPI—or key performance indicator—is an acronym we hear a lot. It’s used to describe any metric or set of data that measures business performance. KPIs are extremely important, and they should serve as guideposts for your business. Consistent, accurate tracking of the marketing KPIs relevant to your business is critical to ensuring you are progressing toward your goals and able to make adjustments as needed.

Not sure where to start? We’ve put together a list of eight impactful marketing KPIs you should be tracking.

1. Sales Revenue

Calculate sales revenue by subtracting revenue attributed to customers acquired through your marketing campaigns from your total sales for the year.

Understanding your sales revenue is critical to knowing the effectiveness of your marketing. If you’re not generating revenue as a result of your marketing efforts, it’s a waste of resources to continue spending money on the same strategy. By measuring sales revenue as a function of your marketing campaigns, you can determine whether to stick with your current strategy or move resources into other activities.

2. Lifetime Customer Value

To calculate the lifetime value of your customers, use this formula:

LCV = (Average sale per customer) x (Average number of times a customer buys per year) x (Average retention time in months or years for a typical customer)

By understanding lifetime customer value, you can better predict the future revenue potential of the relationship, which in turn will help you determine a reasonable marketing spend for acquiring a customer. It can also help sharpen your focus on the long-term value of customers and provide a basis for your communication strategy.

3. Cost Per Lead

It’s important to know how much it costs to acquire a customer relative to your marketing budget. Understanding cost per lead helps with more effective budget allocation and campaign decisions.

4. Traffic-To-Lead Ratio

Also known as a new contact ratio, traffic-to-lead ratio is all about understanding where your website traffic is coming from—whether it’s organic, direct, via social media, from referrals, or some other source. If traffic is increasing but traffic-to-lead ratio is low, it’s an indication that something is missing. You may need to consider a change in your website design, content, or contact form(s), or revisit your lead generation strategy entirely.

5. Lead-To-Customer Ratio

The end goal for many marketing campaigns is to gain new customers and grow sales. To determine whether your campaign is successful in achieving that, you need to know how many leads your sales team is able to close. If your campaign is failing to capture qualified leads or your close rate is low, work with your sales team to develop ways to improve those numbers. A lack of leads turning into customers might not be a marketing problem—so it’s important to set expectations for your sales team as well.

6. Landing Page Conversion Rate

Monitor landing page conversions as part of understanding your inbound marketing effectiveness. A landing page that gets no visits or clicks is of little use to your business—there may be great content there, but it doesn’t matter if no one sees it. Similar to your traffic-to-lead ratio, if your landing page is getting lots of traffic but has a low conversion rate, it is an indication that you need to make some changes.

7. Organic Traffic

Monitoring the success of your SEO and keyword efforts is an essential part of any marketing strategy. Traffic from organic search means people are finding your site or content on their own based on relevant search queries.

8. Social Media Traffic (and Engagement)

Among the metrics you should be monitoring on social media are lead conversions, customer conversions, and the percentage of total website traffic generated by social media. As part of an inbound marketing strategy, social media has proven value. By understanding where your leads, customers, and traffic are coming from, you will be better able to determine where the focus of future efforts should be.

How Will Tracking These KPIs Help You?

Simply put, tracking KPIs is important to understanding why you’re getting the results you’re getting from your marketing strategy. The right marketing KPIs can help you determine why conversions or sales are low, and understand the strengths and weaknesses of specific campaigns. Reviewing KPIs periodically—not just at the end of a campaign—enables you to revise and refine your strategy and make adjustments as needed.

When it comes to marketing, numbers don’t lie. If you find yourself wondering if your campaign or overall strategy is working, tracking these eight marketing KPIs can help give you an objective answer—and a path to make the right changes. Contact us for help determining the best KPIs for your business.

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