Have you ever sat and wondered to yourself how the big guys grow to be… the big guys?
I’m sure it has come into your mind a time or two during your mid-day daydream.
Do they have some content marketing superpower, or are they just lucky?
Maybe there is some club you can sign up for?
We thought the same thing until coming across the truth, they make growth-related decisions based on data-backed metrics.
These metrics are referred to as KPI’s which stands for Key Performance Indicators.
What Is A KPI In Marketing?
KPIs in marketing are quantifiable metrics used to help you measure and track your success over time.
Marketers use KPIs to manage and see whether they’re on track to meet their strategic goals.
Essentially they help you navigate the road map laid out with your content marketing strategy and allow you to make decisions based on accurate data.
It’s not something you want to become overly obsessed about, but it is something you want to keep in mind as you implement your marketing strategy to let you know if you are on your target or not.
Why Are KPIs In Marketing Important?
KPIs in marketing are important for a couple of reasons.
For starters, It helps you and your team keep a continuous pulse on your business and growth.
It’s always a plus to know that you’re on the right path as you and your team collectively work hard towards producing new content targeted towards the overall strategy.
This leads us to the next point.
Keeping everyone on the same page and understanding KPIs keeps everyone on the same page and helps unite the team for a common cause.
When people feel important and make a difference in the end result, they will feel inclined to work harder at producing high-quality content, and results will show.
Speaking of results, you will be able to make decisions based on facts and evidence from data rather than guessing and assumptions.
Your marketing strategy is more than a wall decoration you look at every once in a while as you walk into your office.
If you want to meet your goals, then tracking your KPIs will help you make sure you are on the right track.
Another benefit of keeping track of your KPIs is that it creates a learning culture among your team.
Whether you hit your goals or not, you will be training your team to be growth-minded and adapt their knowledge and skills to hit those goals eventually.
Not only is this good for the business as a whole, but your team will enjoy playing an active role in their success within that project.
KPIs get everyone on the same page and boosts team morale.
You would be surprised how many people would prefer to be an active part of your company’s success when you let them.
13 KPIs You Can Track
The KPI’s you set for your business all depends on what your goals are.
Take a moment to refer back to your marketing strategy and go from there.
Pick the right metrics that will give you the most insights and let you stay up-to-date with your progress.
You don’t need to track every single one of the 13 we have listed here, just the most relevant ones.
Here are 13 key performance indicators that you can pick from:
1. Lifetime Value of a Customer
It is good practice to know how much each customer is worth to your business.
This means understanding how long they’re going to be with your company, how much money they will spend with you on average, how many times will purchase from you, etcetera.
Make sure you take all factors into effect here for a more accurate number to go off of.
This helps you consistently predict how much you will be expecting and Revenue and how many customer Acquisitions you will need to hit the numbers you need to.
Formula: (average order value) * (number of repeat transactions) * (average customer lifespan) = Customer Lifetime Value
2. Return on investment (ROI)
Knowing your return on investment will help you inform your decisions better when maximizing your time and money compared to your expended efforts.
You always want to make you more money than you’re putting out. It is nice to see that number upfront.
Tracking your ROI will help you keep your decisions clear and purely based on data, not emotion.
It allows you to make smarter decisions.
Formula: (Gain from the investment) – (the cost of investment/cost of investment) = ROI
3. Return On Ad Spend (ROAS)
This refers to understanding how much money you are making back compared to what you are spending.
Advertising platforms like Google Ads and Facebook ads help you to make it very clear in real-time how much money you are spending versus receiving.
Use these resources to your advantage.
Formula: (sales from investment – cost of investment) / (cost of investment) = ROAS
4. Marketing Qualified Leads
This represents how many qualified leads you brought in from your advertising methods.
If you are a service-based business, your revenue is directly related to how many qualified leads are coming in.
The goal is to predictably quantify how many leads are coming in every month so you can better distribute your resources or plan accordingly.
6. Conversion rate
Conversion rate represents the number of people that have completed the desired action you want them to take.
This could be a form sign-up, calling for more information, sign up for an email list, whatever it is that you’re trying to get your customers or viewers to do.
Your conversion rate gives you insight into how well you are at bringing in valued leads by performing an action.
If many people come to your website and none of them turn into customers, then there may be something throwing them off from taking the final move.
You can then spend time diagnosing what the problem is by A/B testing finds the solution.
Formula: (number of conversions) / (number of impressions) = Conversion Rate
7. Website visitors
This one is pretty straightforward.
Website visitors are simply people that come to your website.
It doesn’t matter where they came from; It’s just an overview showing how many people are coming to check out what you are making in the kitchen.
Maybe they’re coming to check out your blog or use tools that you have created a website.
It’s just an overview of how many people have come to your website in total.
8. Organic traffic
Organic traffic represents people that have come onto your site without touching any ads or promotional posts from either google ads or any other platform.
Organic traffic is monetarily free traffic.
You pay for organic traffic in the form of time and effort rather than money.
The amount of organic traffic you receive is primarily related to your SEO practices and optimizing your website.
9. Referral traffic
Referral traffic is a KPI that can help you understand precisely where your customers are coming from online to your website.
It tells you if they clicked through a post you made on Facebook or from a pin you created on Pinterest.
This helps you better understand where you need to maximize your efforts and your most popular sources of traffic.
10. Customer acquisition cost
Customer acquisition cost is a metric that tells you how much you have to spend to convert someone into a customer.
Whatever you Spent throughout the entire process of trying to bring in Leads, build trust, create content, all the way to signing them up as customers.
It gives you clarity on information like spending more than you need to bring in new clients or if your actions are resulting in conversions.
Formula: (budget) / (number of new customers) = Cost Of Customer Acquisition
11. Customer retention
The customer retention indicator helps you keep track of how long customers stick with their company for your provided service.
If you are losing more customers than you are gaining every month, you know something needs to change.
Formula: (customers lost in a given period / total number of customers acquired in the same period) * 100 = Customer Retention Rate
12. Sales growth
Sales growth represents whether or not you are increasing the number of sales made month-over-month.
It’s an easy way to track whether your sales team will hit their mark and if they’re improving their abilities.
If you’re making more sales this month and last month, then congratulations, you’re showing positive sales growth.
Formula: (current month sales – last months sales) / (last months sales) = Sales Growth
13. Number of inbound links
Inbound links are when people refer to your content within their own, resulting in a referral link from their website to yours.
Consider this an indication they found the information you produced was valuable enough to link back to and give credit.
Depending on the referrer, your website traffic could be directly affected, and your domain authority could go up.
Conclusion
KPIs in marketing are tools that you can use to judge whether you are on target to meeting the goals laid out and your marketing strategy.
keeping everyone in your organization informed of your businesses KPIs will create a culture of personal growth, and will keep your team personally vested in seeing results.
We appreciate you hanging out with us today and hope to have taught you something new.
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