Key performance indicators (KPI) are what marketers use to gauge success. Let’s learn more about KPIs and look at a few marketing KPI examples that will help you enhance your marketing in the sections below.
What is a Key Performance Indicators (KPIs)?
A key performance indicator, or KPI, assesses how well your business is doing in relation to accomplishing a particular aim or purpose. KPIs exist for every facet of the business, including financial, marketing, sales, and operational aspects.
KPIs are essentially quantifiable measurements used to track overall performance. Making unique dashboards in your automation software is a terrific method to examine and report on your KPIs.
Having established what a key performance indicator is, let’s examine some examples.
1. Customer Acquisition Cost (CAC)
Customer acquisition cost (CAC) quantifies the expense involved in turning a lead into a paying customer.
Because it enables you to make crucial budgetary decisions, this metric can be used to enhance your marketing.
For instance, if obtaining a customer won’t generate a profit, you don’t want to spend too much money on it. In essence, this aids businesses in determining how much money to invest in luring clients.
2. Social Media Engagement
I won’t say it again, but social media plays a big part in marketing. Engagement is one of the key KPIs for social media.
Likes, shares, remarks, messages, tags, and mentions could all be tracked. Any interaction a lead or customer has with you qualifies as engagement.
You may evaluate the effectiveness of your social media posts by tracking engagement.
3. Lifetime Value of a Customer (LTV)
The lifetime value of a customer is yet another indicator that can be used to decide how much money should be allocated to marketing. This indicator shows how much money a company can make overall from a single consumer.
Comparing this statistic to CAC is helpful. You may be paying too much to acquire clients, for instance, if your CAC is larger than your LTV.
4. Return on Investment (ROI)
Return on investment in marketing is the amount of money you make compared to the cost of marketing.
By subtracting marketing expenses from sales growth and dividing the outcome by marketing expenses, you may calculate the return on your investment.
In marketing, keep in mind that it can be difficult to attribute an increase in sales to a specific marketing campaign. If so, after subtracting your normal organic sales growth, divide your sales increase by your marketing expense.
5. Referral Traffic
A KPI called referral traffic can show you where your website visitors are coming from.
This is a wonderful KPI to monitor because it enables you to learn how the majority of people discover your business. You could find this information helpful when creating your overall marketing plan.
6. Return on Ad Spend (ROAS)
A more precise key performance indicator you may use to assess the effectiveness of your advertising initiatives is the return on ad expenditure.
This metric compares the amount of money you make from advertising to every dollar you spend on it. Often, it is a ratio.
Let’s imagine, for illustration, that you spent $1 on advertising and received $10 in return. Your ROAS for that particular campaign is 10:1.
7. Marketing Qualified Leads (MQL)
An MQL is a lead who has interacted with your business and may develop into a more significant prospect if you maintain that connection.
This is an excellent KPI to track because it gives your marketing team insight into the volume of leads they are generating.
Your marketing team can track how many marketing-qualified leads (MQLs) turn into sales-qualified leads (SQLs), and ultimately, customers (see below).
8. Net Promoter Score (NPS)
Customer satisfaction can be measured using the Net Promoter Score. This KPI gauges the likelihood that customers will tell a friend about your company.
You’ll likely give more room for comments when calculating your NPS. This measure can provide you with candid, useful feedback and client insights.
It’s critical for marketers to pay close attention to and fully comprehend their target audiences. You can do that with the aid of this KPI.
9. Customer Retention
Customer retention may not seem like a marketing key performance indicator, but it is one that should be taken into account.
Because you can use the data in your messaging for your marketing activities, customer retention is a wonderful KPI for marketers to monitor.
In order to better market to your clients, this metric also helps you understand them better.
10. Sales Qualified Leads (SQL)
A sales-qualified lead will eventually develop from an MQL if it is properly nurtured. A prospective customer who is prepared to speak with a member of your sales team is known as SQL.
These leads have often been investigated and approved by your marketing division.
Once more, this KPI is beneficial as it can assist your marketing team in understanding how many of their leads are speaking with your sales staff.
11. Follower Growth
One of your responsibilities as a marketer may be to oversee the social media presence of your business. A useful key performance indicator to monitor if you are on the social media team is follower growth.
Your social media team’s main objective, most likely, is to engage your audience and raise brand awareness. A fantastic approach to gauge your progress towards those objectives is by growing your following.
You might think about launching sponsored campaigns to expand your following. On the 4 days that one brand ran a series of sponsored posts on Instagram, it gained 36X the usual amount of followers daily, bringing its total number of followers up by 18.15%.
12. Organic Traffic
It’s critical to assess the effectiveness of your SEO efforts. You’ll probably monitor the KPIs for organic traffic and keyword performance to achieve that.
You may check how well your business is performing on search engines for particular keywords by using an SEO tool.
Your complete organic and SEO strategy will be guided by this key performance indicator.
13. Conversion Rate
The percentage of visitors who carry out a desired activity is known as the conversion rate. Anything from submitting an online form to signing up for a service or making a purchase could be the intended action.
This KPI is useful to monitor because it can inform you of your success in generating leads.
For instance, tracking your conversion rate could show you that few leads are being converted from your website if the desired action was to fill out a web form. If so, you might want to start reevaluating your approach.
14. Website Visitors
The basic objective of a marketer is to draw customers to their business. Getting website visits is a wonderful approach to achieving this.
An essential KPI is website traffic because it can be used to measure the effectiveness of various campaigns.
For instance, if you monitor organic web traffic, you can assess how well your SEO staff is performing.
But, if you are monitoring online traffic from social media, you can utilize web traffic to determine how many referrals your social team provides to your website.
15. Event Attendance
You will have KPIs as a marketer for each campaign you are running.
For instance, if you’re organizing an event, you’ll probably keep track of attendees. This KPI will inform you of how successfully your marketing team attracted attendees to your event.
KPIs are crucial since they allow you to assess your progress as a marketer. Since you’ll need to monitor the success of both short-term and long-term campaigns, KPIs will be used in practically every situation.