15 Key Performance Indicators to Help Improve Your Marketing
When I was cooking steak the other day, I had to use a meat thermometer to check that the meat was completely cooked through.
In other words, I had to look for an indicator to see how the cooking process was going.
Marketing is pretty similar.
As a marketer, instead of using a meat thermometer, you use key performance indicators (KPI) to measure success.
Below you will learn more about KPIs and some examples of marketing KPIs that you can use to improve your marketing.
What is a KPI?
A KPI is an important performance indicator that measures how your company is achieving a specific goal. There are KPIs for every aspect of the business, whether financial, marketing, sales, or operational.
In essence, KPIs are measurable metrics that measure overall performance over time. A great way to analyze and report on your KPIs is to create custom dashboards in your automation software.
Now that we understand what a KPI is, let’s look at a few examples.
For today’s purposes, we’ll focus on Marketing KPIs. For more information on sales metrics, check out our ultimate guide.
- Customer Acquisition Costs (CAC)
- Lifetime Value of a Customer (LTV)
- Return on Investment (ROI)
- Return on Ad Spend (ROAS)
- Marketing Qualified Leads (MMS)
- Sales Qualified Leads (SQL)
- Follower growth
- Exchange rate
- Website visitors
- Social media engagement
- Referral traffic
- Net Promoter Score (NPS)
- Organic traffic
- Participation in events
- Customer loyalty
1. Customer Acquisition Costs (CAC)
Customer Acquisition Cost (CAC) measures the amount of money it takes to convert a potential lead 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 acquiring a customer if it doesn’t result in a profit. Basically, this helps companies decide how much money to spend on customer acquisition.
2. Customer lifetime value (LTV)
Another metric that can be used to determine how much money to spend on marketing is a customer’s lifetime value. This metric indicates the total revenue a company can expect from 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 trying to get your customers.
3. Return on Investment (ROI)
Return on Investment in Marketing relates to the amount of money you make compared to the cost of marketing.
To work this out, subtract marketing costs from sales growth and divide that by marketing costs to get the return on your investment.
In marketing, keep in mind that it can be difficult to directly attribute revenue growth to a marketing campaign. In that case, you can subtract your average organic sales growth and marketing costs from your sales growth and then divide by your marketing costs.
4. Return on Ad Spend (ROAS)
The return on ad spend is a more specific KPI that you can use to determine the success of your ad campaigns.
This metric measures the revenue generated versus every dollar you spend on an advertising campaign. It’s usually a relationship.
Let’s say you made $ 10 for every $ 1 you spent on an advertising campaign. That means your ROAS for this campaign is 10: 1.
5. Marketing Qualified Leads (MMS)
An MMS is a lead who has dealt with your business and could become a more serious prospect if you nurture that relationship.
This is a good KPI to measure as it will help your marketing team understand how many leads they are bringing in.
Compared to sales-qualified leads (see below) Your marketing team can measure how many MMSs turn into SQLs and then customers.
6. Sales Qualified Leads (SQL)
When properly maintained, an MMS will eventually become a sales-qualified lead. A SQL is a prospect who is ready to speak to someone on your sales team.
Typically, these leads have been researched and reviewed by your marketing department.
Again, this KPI is helpful as it can help your marketing team understand how many of their leads are speaking to your sales team.
7. Follower growth
As a marketer, one of your roles may be managing social media accounts for your business. If you work on the social team, follower growth is a helpful KPI to track this.
One of the goals of your social media team, most likely, is to increase brand awareness and engage with your audience. Increasing your followers is a great way to measure the success of these goals.
To grow your follower base, you can run sponsored campaigns. In the four days of making a series of sponsored posts on Instagram, a brand added 36 times its typical number of followers per day, increasing their number of followers by 18.15%.
8. Conversion rate
The conversion rate is the percentage of visitors who take a desired action. The action you want can range from filling out an online form to signing up for a service or purchasing a product.
This is a helpful KPI that can be used to track how successful you are in generating leads.
For example, if the action you wanted was to fill out a web form, measuring your conversion rate will tell you that your website is not converting many leads. If so, you could start rethinking your strategy.
9. Website visitors
As a marketer, the main goal is to attract people to your business. A great way to do this is to attract website visitors.
Website visitors are an important KPI as they can track the success of multiple campaigns.
For example, if you’re tracking organic web traffic, you’re measuring the effectiveness of your SEO team.
Conversely, 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 website.
10. Social media engagement
Not to repeat, but an important role in marketing is social media. One of the most important KPIs for social media is engagement.
You can track likes, shares, comments, messages, tags, or mentions. Every way a customer or lead interacts with you can count as engagement.
By measuring engagement, you can analyze the success of your social media posts.
11. Forwarding Traffic
Referral traffic is a KPI that can help you better understand where your web visitors are coming from.
This is a great KPI to track as it helps you understand how most people find your business. This can be useful information in building your overall marketing strategy.
12. Net Promoter Score (NPS)
The Net Promoter Score is a way to measure customer satisfaction. This KPI measures the likelihood that your customers will recommend your company to a friend.
When calculating your NPS, you are most likely leaving extra space for comments. This metric can give you direct, actionable feedback and insights from your customers.
As a marketer, it’s important to listen to your customers and really understand them. This KPI will help you with that.
13. Organic traffic
It is important to measure the success of your SEO efforts. To do this, you are likely tracking organic traffic KPI and keyword performance.
With an SEO tool, you can see how well your company is ranking on search engines for certain keywords.
This KPI informs you about your general organic and SEO strategy.
14. Participation in events
As a marketer, you have KPIs for every campaign you run.
For example, if you are hosting an event, you are most likely tracking people attending an event. This KPI tells you how well your marketing team has attracted people to your event.
15. Customer loyalty
While you might think that retention isn’t a marketing KPI, it’s actually important to keep that in mind.
Retention is a great KPI for marketers because you can use the information in your messages for your marketing campaigns.
Additionally, this metric will help you better understand your customers so you can better market them.
Ultimately, KPIs are important because they are how you measure success as a marketer. You use KPIs in almost any situation as you need to track success for both short and long term campaigns.