Understanding what works and what doesn’t in marketing is often known as your marketing’s Key Performance Indicators (KPI). These are often referred to as the pillars of your company’s growth strategy.
What are KPIs?
Furthermore, measuring marketing KPIs is crucial in reviewing a company’s overall plan. Measuring the correct marketing KPIs for your business will allow you to assess the effectiveness of your marketing activities while also helping you to reflect upon what all changes in your strategies are needed.
In short, KPI is a quantitative indicator for a campaign’s specific goals in marketing. It helps quantify marketing performance at the end of a campaign by indicating the progress made during the process.
Why is tracking KPI important?
Well, we have got you a lot of reasons why you should be tracking the KPIs. Let’s have a look at them:
- Suppose you don’t monitor and track your campaign results. In that case, you won’t know if your marketing efforts are helpful and are generating desired results.
- You can ensure that you’re focusing on the proper marketing initiatives to fulfill your project’s objectives by aligning KPIs with them.
- Measuring outcomes will prevent you from wasting time, effort, and resources on ineffective projects.
- Knowing the suitable KPIs and measuring them will help you to have the right information at your fingertips to solve problems or increase performance.
1. Cost per Lead (CPL)
Let’s do some maths! Let’s say if you generated 50 leads in January, and 20 of them converted to opportunities during that time, your lead conversion rate would be (20 / 50) x 100 = 40%.
2. Online Marketing ROI
Reporting and analytics are essential in the marketing industry. It is vital to your online business to be able to report on and evaluate website activity, as well as where traffic is coming from. Once you have the tools to examine this data, you can improve traffic sources to generate more lead traffic & increase conversions. Examine which platform works best for you, such as Google Adwords, social media, backlinks, etc.
3. Cost per Customer Acquisition (CAC or CPA)
Let us try to understand it like this. If you’re trying to get a customer on board, but their onboarding isn’t going to give you a large sum of profit, you know that you don’t want to spend too much money on it. Essentially, this will help organizations determine how much money to spend on customer acquisition.
4. Customer Lifetime Value (CLV)
Customer Lifetime Value is an estimate of a company’s profitability throughout its relationship with each customer. Increasing Customer Lifetime Value allows you to keep in touch with your customers, reduce disengagement, and maximize their satisfaction. It also aids in estimating a realistic cost per acquisition.
5. Marketing ROI
Every business wants to see a positive return on its marketing budget. You don’t want to keep raising your marketing budget for an inefficient campaign that is losing your organization money.
Your return on investment will influence how you should go in the future, regardless of what marketing activity your firm is implementing.
6. Marketing Qualified Leads (MQL)
A marketing-qualified lead (MQL) is a potential customer who has been evaluated and reviewed by the marketing team and meets the requirements for being handed on to the sales team.
In a nutshell, an MQL is a lead who has connected with your firm and has the potential to become a significant prospect if the relationship is fostered.
This is an excellent KPI to track because it allows your marketing team to see how many leads they generate. Furthermore, by comparing MQLs to SQL (sales qualified leads).
7. Sales Qualified Leads (SQL)
An SQL is a prospective customer who has passed the engagement stage, has been thoroughly examined by both marketing and sales, and has been considered ready for the next step in the sales process, i.e., a direct sales pitch. These leads have shown an interest in purchasing and have passed lead qualifying standards, indicating that they are a good match for the product or service. All they need now is further nurturing of leads to convert them into paying customers.
In short, An SQL is a buyer who has expressed an interest in making a purchase and sees your firm as a viable option.
It is essential to understand that the desire to buy is the most significant difference between MQLs and SQLs. While other elements influence whether a lead is marketing or sales-ready, the “intent to purchase” is the most crucial indicator for marketers when selecting whether or not to move a lead on to sales.
8. Landing page conversion rates (website traffic)
So, your landing page is up and running. It’s lovely and follows all the best practices, but does it convert? Then this is a red flag you should be paying attention to.
You can try to change your CTA color, place your CTAs in the right place, add persuasive copy text, add reviews, etc., to see if they are helping you get better results.
9. Return on Ad Spend (ROAS)
Return on ad spend is a more specific KPI that you may use to evaluate the success of your advertising initiatives. This metric calculates the profits generated for every dollar spent on an advertising campaign.
10. Return on Marketing and Advertising Spend (ROMAS)
It is a common mistake to get confused between ROAS and ROMAS, but we are here to help. ROMAS breaks down all of your spendings, including your cost of goods, agency spending, consultancy spending, marketing spending, ad spending, and everything else. If ROMAS is positive, you are undoubtedly making money, unlike ROAS, as it may not show you the whole picture.
We at Kuware believe that you should go on to measure ROMAS. It is a much important factor to examine if you want to get accurate results on your investment returns. Unfortunately, ROMAS will not be immediately available in any of the tools. You will have to ask your marketing agency to do it for you.