THE Marketing Key Performance Indicators (KPIs) are one of the most used and least understood terms in marketing departments.
In this article, we will define and take an in-depth look at how to choose the right marketing KPIs.
In an era where tracking and reporting software is multiplying, it is easy to get lost and forget about them. Main marketing KPIs and report on performance indicators that mean nothing (vanity metrics).
Marketing KPIs are too often seen as metrics or data used to measure business performance.
The role that marketing KPIs play is much more important.
In fact, KPIs are one of the most important benchmarks for any business.
All businesses should have and monitor them regularly.
Summary
- What is a marketing KPI?
- Marketing KPIs to measure revenue generated
- Marketing KPIs to measure the performance of your site
What is a marketing KPI?
A marketing KPI (Key Performance Indicator) or key performance indicator is a specific marketing metric that companies track in order to measure their progress towards a defined objective within the different marketing channels.
There is no need to have many different marketing KPIs.
However, you will need to select, report and take action from those which you have defined.
Now we will see 10 marketing KPIs to follow in your business.
Marketing KPIs to measure revenue generated
Cost per lead
How much does it cost you to acquire a lead?
Calculating your CPL or cost per lead will determine the effectiveness of your marketing campaigns. This is why it is very important to regularly monitor the evolution of the cost per lead.
To calculate a cost per lead simply, you can perform the following calculation:
CPL = Total marketing expenses / total leads generated
Customer Lifetime value
Measure the value of a customer throughout its lifecycle is essential to understanding your business.
We call Customer Lifetime Valuethe total amount one can expect to get from a customer on average over their life cycle.
Before you can calculate Customer Lifetime Value, you will need to understand another important marketing metric, ARPA or ARPU.
Average Revenue per Account or Average Revenue per User, is the average revenue generated over a month by a customer.
You can calculate Customer Lifetime value or CLV as follows:
CLV = ARPA x 12 x average customer lifespan in years
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Number of MQLs (Marketing Qualified Leads)
Now that you have leads, the next step is to determine if those leads are qualified leads (MQLs).
MQLs are leads that have been qualified as an attractive customer.
This will vary by company and industry, but the methodology is the same.
You can qualify a lead in MQL based on the interactions he has had with your brand using a lead scoring solution, for example.
For example, we can consider that a lead is an MQL if he has visited at least 10 pages on the site and downloaded 1 white paper.
You can adapt your MQLs criteria depending on the feedback from your sales if the MQLs are not qualified enough for example.
MQL to SQL ratio
Sales qualified leads (SQLs) are simply MQLs who intend to make a purchase.
The marketing team should be able to hand these leads to the sales team on a “silver platter” for just closing.
If you are having trouble converting MQLs to SQLs, then you may need to do a better job of qualifying during the process.
This can be a measure with many possible variables.
If you’re not generating SQLs at a high enough rate, it may be a sign that the scoring and lead nurturing done by the marketing team isn’t accurate enough or that you’re attracting the wrong type of lead.
ARPA by acquisition channels and campaigns
As seen previously, ARPA, Average Revenue per Account, is a very important indicator for measuring the “average basket” of your customers.
Understanding this indicator and analyzing it by acquisition channel and by campaign will allow you to allocate the right resources where it is most profitable for your business.
Thanks to this indicator you will really be able to scale your business on what is most profitable.
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Customer retention (or churn reduction)
Acquiring new customers is less profitable and takes more time than building loyalty or upselling.
A high customer retention rate tells you that you offer greater value than they can find elsewhere and that they are very satisfied with your offer.
This is a key metric because it allows you to understand and analyze the value you bring to your customers, across the organization.
The more your customers stay and use your product, the more your CLV will increase and the better your business will perform.
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ROAS of your campaigns
If you run paid marketing campaigns, it is essential to analyze and understand this marketing KPI. The ROAS or Return On Ad Spend, allows you to know if your marketing campaign is profitable or not.
How to calculate ROAS?
ROAS = Revenue generated by the advertising campaign / Revenue spent in the campaign
If you spent $2,000 on Google Adwords campaigns in one month, and in the same month those campaigns generated $10,000 in revenue, then your return would be:
€2,000/€10,000 = 5:1 or 500%.
A ROAS of 5:1 means that for every $1 spent, you get $5 in revenue.
Marketing KPIs to measure the performance of your site
Landing page conversion rate
This marketing KPI is very simple to understand. The conversion rate will allow you to see which landing page performs best.
For more advice on landing pages, we recommend this article.
Conversion rate = total on-page conversions / total on-page sessions * 100
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Rebound rate
The bounce rate is an interesting content quality indicator to analyze.
A low bounce rate (less than 40%) will indicate that you are attracting the right visitors to your site and that they find your content interesting.
Conversely, a high bounce rate will indicate that you may not be attracting the right users and you may need to change something in your traffic acquisition strategy.
Time on page
The time on-page is also an indicator of content quality.
Quite simply, the time on-page indicates the average time a visitor spends on your page.
Number of Sessions
The number of sessions is what is called a vanity metric, a metric that means everything and nothing at the same time.
However, the more qualified visitors you attract to your website, the more likely you are to convert them into leads and customers.
As you will have understood, there are many Marketing KPIs to measure the performance of your actions.
From more business-oriented KPIs to your site’s KPIs, you need to measure many factors on a regular basis in order to stay on track. healthy organic growth.