Key performance indicators (KPIs) are used to track the effectiveness of business and department activity and measure individual and overall success. Different departments or areas of business have their own targets and strategies, and as such should have different KPIs.
KPIs provide targets, milestones and insights to help motivate and educate your team so that they can make better decisions and produce better results for your business.
When it comes to marketing, it can be difficult to see or measure the effectiveness of activity, so it is important that you are tracking all the right metrics to give you the best picture. Here are some of the top marketing KPIs to measure your progress.
Cost per lead
Cost per lead (CPL) measures the efficiency of your marketing campaigns when generating new leads. CPLs provide businesses with the data required to determine whether or not they are acquiring new customers in a cost-efficient manner.
This is calculated by dividing the total value of customer acquisition costs by the number of leads generated. Customer acquisition costs may include investments in search engine optimization, content marketing, event marketing, and PR.
Marketing qualified leads
A marketing qualified lead (MQL) is one which has been generated or is more likely to become a customer as a result of marketing activity and is an important part of the Customer Journey.
These can be identified as the leads that have been contacted by the business and have responded to the marketing.
Customer retention
A company’s ability to turn customers into repeat buyers is reflected in their customer retention rate.
If you have a high retention rate, this means that customers continue to use your services or repeatedly purchase your products, indicating that you are offering a high-quality or competitive product or service.
However, if you have poor customer retention, then you are likely losing customers to competitors and need to identify how to improve customer loyalty.
Customer lifetime value
The customer lifetime value (CLV) is a metric which is used to indicate the total revenue that a business can reasonably expect from a customer during their lifetime, or at least throughout the business relationship.
To calculate your CLV, multiply the average sale value per customer by the average number of times a customer buys per year, then multiply by the average lifetime of a customer in years or months.
Return on investment
It is imperative that you measure the return on investment (ROI) of your marketing activity to determine whether it is helping or hurting your business.
If a campaign is costing you more than the revenue you are gaining from it, you may need to re-evaluate your marketing strategies in order to see a higher profit. However, it is important to know which ROI you should be expecting for each channel. Some channels you may expect fast results, such as Pay Per Click (PPC), and may expect a could ROI quickly. However, SEO, Content Marketing, and Social Media are examples of channels that may not provide quick wins. Your ROI for these channels may appear low initially but you must take into consideration the time it takes for these channels to be established as they are all different.
There are several ways of calculating your marketing ROI, but the most common is to subtract your marketing cost from your sales growth, then divide by the marketing cost.
There are many more important KPIs that you should be using to track and guide your marketing activity.
If you are struggling to track your progress or to meet targets, or if you are not seeing the results you were hoping for, contact DBS for professional support today.
We can take care of measuring and monitoring the performance of your digital marketing campaigns to see what is and isn’t working. Plus, you will receive a monthly report highlighting the performance of digital marketing efforts.
At DBS Digital, we specialise in maximising your revenue through Tailored Digital Marketing Services. We’re dedicated to elevating your brand’s profitability. To find out more about our services, contact us today.
