When I was cooking a steak the other day, I had to use a meat thermometer to check if the meat was done all the way through.
In other words, I had to look for an indicator to see how the cooking process was going.
Marketing is quite similar.
As a marketer, instead of a meat thermometer, you’ll use key performance indicators (KPIs) to measure success.
Below, let’s learn more about KPIs and review some examples of Marketing KPIs that can help you improve your marketing.
What is a KPI?
A KPI is a key performance indicator that measures how well your business is performing towards a certain goal or goal. There are KPIs for all aspects of the business, be it financial, marketing, business or operational.
Essentially, KPIs are measurable metrics that assess overall performance over time. A great way to analyze and report on your KPIs is to create Dashboards in your automation software.
So, now that we understand what a KPI is, let’s look at some examples.
For today’s needs, we’ll focus on marketing KPIs, but to learn more about sales metrics, see our ultimate guide.
Examples of KPIs
- Customer acquisition cost (CAC)
- Customer lifetime value (LTV)
- Return on investment (ROI)
- Return on advertising spend (ROAS)
- Qualified Marketing Leads (MQL)
- Qualified Sales Leads (SQL)
- Subscriber growth
- Conversion rate
- Website visitors
- Social media engagement
- Reference traffic
- Net Promoter Score (NPS)
- Organic traffic
- Participation in the event
- Loyalty of the clientele
1. Customer acquisition cost (CAC)
Customer acquisition cost (CAC) measures the amount of money needed to convert a potential prospect into a customer.
This metric can be used to improve your marketing as it helps you make important budget decisions.
For example, you don’t want to spend too much money on acquiring a customer if it doesn’t result in a profit. Basically, it helps businesses decide how much money to spend on attracting customers.
2. Customer lifetime value (LTV)
Another metric that can help determine how much money to spend on marketing is the lifetime value of a customer. This metric shows the total amount of revenue a business can expect to make with a single customer.
This is a useful metric to compare to CAC. For example, if your CAC is higher than your LTV, you are probably spending too much money on acquiring your customers.
3. Return on investment (ROI)
Return on investment in marketing refers to the amount of money you earn versus the cost of marketing.
To calculate this, you subtract the marketing spend from the sales growth, then divide that by the marketing costs to get the return on your investment.
In marketing, keep in mind that it can be difficult to directly attribute sales growth to a marketing campaign. If so, you can subtract your average organic sales growth and marketing costs from your sales growth, and then divide them by your marketing costs.
4. Return on advertising spend (ROAS)
Return on advertising spend is a more specific KPI that you can use to determine the success of your advertising campaigns.
This statistic measures the revenue generated per dollar spent on an advertising campaign. It is usually a ratio.
For example, let’s say you earn $ 10 for every dollar spent on an ad campaign. This means that your ROAS for this campaign is 10: 1.
5. Qualified Marketing Leads (MQL)
A MQL is a lead that has engaged with your business and could become a more serious prospect if you have that relationship.
This is a great KPI to measure because it helps your marketing team understand the number of leads they bring.
Additionally, compared to qualified leads for sales (see below), your marketing team can measure how many MQLs become SQLs and then customers.
6. Qualified Sales Leads (SQL)
If an MQL is properly maintained, it eventually becomes a qualified prospect for sales. An SQL is a potential customer ready to speak to a member of your sales team.
Usually, these leads have been researched and verified by your marketing department.
Again, this KPI is useful because it can help your marketing team understand how many of their prospects are talking to your sales team.
7. Growth of followers
As a marketer, one of your jobs may be to manage your company’s social media accounts. If you work in the social team, a useful KPI to track is follower growth.
One of the goals of your social media team is probably to increase brand awareness and engage with your audience. Increasing your subscribers is a great way to measure the success of these goals.
To grow your subscriber base, you may want to consider running sponsored campaigns. One brand added 36 times their typical number of followers each day during the 4 days they posted a set of sponsored posts on Instagram, increasing their follower count by 18.15%..
8. Conversion rate
Conversion rate is the percentage of visitors who perform a desired action. The desired action can be anything from filling out an online form to signing up for a service or purchasing a product.
This is a useful KPI to track because it can tell you how successful you are at attracting leads.
For example, if the desired action was to fill out a web form, measuring your conversion rate might tell you that your webpage is not converting a lot of leads. If so, then you can start to rethink your strategy.
9. Website visitors
As a marketer, attracting people to your business is the primary goal. A great way to do this is to attract website visitors.
Website visitors are an important KPI as they could track the success of multiple campaigns.
For example, if you are tracking organic web traffic, you will measure the effectiveness of your SEO team.
On the flip side, if you are tracking web visitors from social media, you can use web visitors to see how many referrals your social team is sending to your site.
10. Social media engagement
It doesn’t have to be repeated, but social media plays a major role in marketing. One of the main key performance indicators of social media is engagement.
You can track likes, shares, comments, posts, tags, or mentions. No matter how a customer or prospect interacts with you, you can count as engagement.
Measuring engagement can help you analyze the success of your social media posts.
11. Reference traffic
Referral traffic is a KPI that can help you understand where your web visitors are coming from.
This is a great KPI to follow because it helps you understand how most people find your business. This can be useful information when developing your overall marketing strategy.
12. Net Promoter Score (NPS)
Promoter net score is a way to measure customer satisfaction. This KPI measures the likelihood that your customers will recommend your business to a friend.
When calculating your NPS, you will likely leave extra space for comments. This metric can provide you with direct, actionable feedback and information from your customers.
As a marketer, it’s important to listen to your customers and truly understand them. This KPI will help you do that.
13. Organic traffic
It is important to measure the success of your SEO efforts. To do this, you will likely track organic traffic KPI and keyword performance.
With an SEO tool, you can see how well your business is ranking on search engines for certain keywords.
This KPI will inform your overall organic and SEO strategy.
14. Participation in events
As a marketer, you will have KPIs for every campaign you run.
If you’re hosting an event, for example, you’ll likely track attendance at the event. This KPI will allow you to know how successful your marketing team was in attracting people to your event.
15. Client retention
While you might think that customer retention isn’t a marketing KPI, it’s actually important to take it into account.
Customer retention is a great KPI for marketers to follow because you can use your email information for your marketing campaigns.
Plus, this metric helps you better understand your customers, so you can better market them.
Ultimately, KPIs are important because they are a measure of success as a marketer. You will use KPIs in almost any situation, as you will need to track the success of short and long term campaigns.