People often think of marketing as a magic wand – wave it and all of a sudden, businesses take flight, sales grow exponentially, and life becomes sunshine and rainbows. But what many fail to realize is that, as much as it is an art, there’s science behind marketing too!
The effectiveness of your marketing efforts depends on your ability to track, analyze and interpret key statistics – also known as marketing Key Performance Indicators (KPI), which allows you to optimize your business’ growth strategy. Apart from being time-consuming, marketing campaigns don’t come cheap. Therefore, tracking your marketing KPIs helps you get the best value from your campaigns and saves you those extra pennies.
1. Sales Revenue
The most important KPI, without a doubt – I mean, why else are you running a business, right? The best way to find out if your marketing campaign is effective (and worthy of investment) is to track the sales revenue generated directly from those efforts. Bear in mind that not all revenue growth is attributed to your marketing campaigns, therefore an additional layer of filter is likely required.
A lead is your chance of making a sale. More leads translate to more sales and thus greater sales revenue. Identifying qualified leads allows you to target your marketing efforts towards people with an existing interest in your product, hence giving you a greater chance at conversion.
Leads can either come as a marketing qualified lead (MQL) or sales qualified lead (SQL), which are simply different lifecycle stages of the same lead. MQL is a lead that has engaged enough with the company to be considered worthy of nurture, while SQL refers to those who are entering the purchase stage of their customer journey.
3. Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is a great indicator to tell you how much you should be spending on customer acquisition. CLV is the worth of your customers to your brand – the monetary value (gross profits) your customers bring during their entire period as a paying customer. If you’re spending more than what you will receive for every acquired customer, then you should be reviewing your strategy!
4. Cost of Customer Acquisition (COCA)
The Cost of Customer Acquisition (COCA) measures how much you are paying to acquire customers. Likewise, COCA should not exceed CLV to avoid making a loss from your marketing campaigns. Understanding COCA allows you to properly allocate your marketing budget according to your customer acquisition goals for the year.
You can calculate COCA by taking the total cost spent on customer acquisition efforts divided by the actual number of new customers secured during a set period.
5. Return on Ad Spend (ROAS)
Again, you don’t want to be spending money without generating enough revenue in return – the same goes for advertising.ROAS measures the amount of revenue generated for every dollar spent on ads. Be sure to have a healthy return before continuing with your advertising campaign!
6. Web Traffic
Most businesses use a website as their main platform for sales, with advertising campaigns on search engines and social media platforms intended to increase web traffic. Therefore, tracking the activities of your web visitors is essential in ensuring the success of your marketing agenda. Tools like Google Analytics can help you measure useful data which include:
• New Users
• Number of Sessions Per User
• Page Views
• Pages Per Session
• Average Session Duration
• Bounce Rate
7. Landing Page Conversion Rates
Another important metric that determines your website’s effectiveness in converting visitors into sales is the landing page conversion rate. When visitors arrive at your website from search engines and social media platforms, your landing page needs to direct them towards conversion. Tracking the landing page conversion rate tells you if potential leads have gone cold at the final hurdle, hence allowing you to implement changes more effectively – such as having a more convincing Call-To-Action (CTA).
8. Social Media Engagement
The important role social media plays in marketing needs no introduction. With its ability to generate buzz, build awareness and educate, social media is the main driver of lead generation and lead nurturing. Hence, understanding your consumers’ social media engagement will be key to you delivering the best content to push them through the marketing funnel towards purchase. Social media engagement includes likes, shares, comments, messages, tags and even mentions. You can also track the volume of web traffic generated from social media channels to measure the effectiveness of your social media campaigns!
Behind even the most eye-catching and inspiring campaigns lie invaluable marketing KPIs that simply cannot be ignored. Marketing KPIs provide brands with a detailed analysis of the effectiveness of their marketing campaigns by accessing how customers react to them. Having such critical information will be key to ensuring that future marketing efforts are both cost-saving and revenue-generating to achieve sales growth. Need help with running your marketing campaigns? Speak to us at email@example.com! We track campaign performance to optimize your marketing returns.