With marketing metrics, you can determine the effectiveness of marketing campaigns and find possible roadblocks. Not to mention, these metrics extract insights to make them actionable. However, knowing what metrics to track and fully understanding the data can be overwhelming.
Tracking marketing KPIs – KPI stands for key performance indicator – is an excellent way to boost your company’s growth and revenue. However, the efforts will pay off only if you track the right performance metric. With this, you can get a better pulse on the health of your business.
So, why wait? Determine KPIs that align with your sales and marketing tactics, and see how it helps your business thrive.
Like with sales KPI, once you get the essential marketing KPI down, you can have deeper and more meaningful conversations with your team. It eventually identifies any missing pieces in your strategy, so you can get desired results.
Even the most seasoned marketer can sometimes get lost in the crowded world of metrics.
Hence, we’ve compiled the ten essential marketing metrics you should track each quarter. Use them to strengthen your campaign and yield a more significant marketing ROI.
What are Marketing Metrics & why do they matter?
Marketing KPIs are simply those indicators or metrics that determine the overall effectiveness of your marketing and sales efforts. It lets you know what strategies are working and which aren’t, so you can adjust your actions accordingly.
The best thing about marketing metrics is that you can configure them to suit your business requirements. Marketers can quickly analyze these metrics by creating a custom dashboard in their automation software. Remember, these indicators are varied and can change from platform to platform.
Wondering why marketing metrics matter? Here’s a quick rundown of the benefits you can enjoy with these key performance indicators.
- It justifies your marketing spend and overall budget allocation.
- These metrics enable you to know which channels provide the highest ROI.
- Marketing KPIs offer insights, so you can make data-backed decisions.
- It helps you adjust marketing efforts to increase the result.
- Marketing metrics help your sales team improve and let them know how to maximize lead conversions.
10 Marketing KPIs
Here’s a breakdown of the ten vital marketing KPIs to help you adopt a data-driven mindset. Track these metrics and optimize your marketing campaigns to boost productivity.
1. Website Session Time
It is the amount of time a user spends on your site. The more time user stays on your website, the better the chances of purchasing. Session time is one of the most essential yet overlooked marketing KPIs.
It gives you more profound insights into customers’ interest in your site and can help you identify user trends in your data. Remember that a visitor who spends a lot of time on your website can serve as a better estimate of digital marketing success than CTR alone.
Finally, session time helps you evaluate your content marketing strategy and identify where to invest your budget.
2. Cost Per Acquisition (CPA)
CPA refers to the aggregate cost of acquiring a new paying customer. This metric depends on several factors, including campaign, channel, and time of the year. Cost Per Acquisition is touted as one of the most vital marketing metrics, especially in the digital marketing era.
It can better contextualize the true impact of marketing campaigns, so you can optimize your budget accordingly. To calculate CPA, gather both marketing expense sheets and sales data.
Divide your campaign cost by the customers acquired to get the result.
The recommended CPA varies from one industry to another. Businesses must focus on lowering their CPA over time sustainably to yield better productivity.
3. Customer Lifetime Value (CLV)
CLV is the total money a single customer is projected to spend on your business in his lifetime. This calculation is based on your pricing model, historical records for similar customers, and any potential upsells.
Customer Lifetime Value proves that quality is often better than quantity. Hence, marketers should organize campaigns to value their existing customers. This value can be determined by multiplying customer value by his average lifespan. The result gives you the revenue you can generate from that particular customer.
4. Website Bounce Rate
Yet another marketing KPI you should be tracking is the Bounce Rate. It refers to how often a user visits your website but leaves without interaction.
If your bounce rate is high on specific pages, it indicates something is wrong and needs immediate review. A high bounce rate means your content or offers aren’t keeping people on the site. It either doesn’t address the audience’s problem or doesn’t lead to a strong value proposition.
A high bounce rate further translates to sales pipeline breakdowns; hence, it should be fixed immediately. The one thing you should do to resolve the high bounce rate is to work on CTA. Ensure your CTA is relevant and compelling and clearly defines the next steps the visitor should take.
5. Conversion Rate
This marketing metric represents how many customers complete a goal on your site. That goal could be creating an account, signing up for a newsletter, or purchasing. Conversion rate is an essential indicator to track, as it gives insight into the overall success of your site.
The benchmark for conversion rates varies from one industry to another. It’s vital to consider this metric at each stage of the funnel to make further adjustments accordingly. If your desired pages aren’t converting many leads, you could start to rethink your strategy.
6. Multi-Touch Attribution
Only a handful of people research and buy during the same browsing session. Most users start their search for a product or stumble across a piece of content, click through to your site, and poke around the blog.
Then, they search for your company name days or weeks later and purchase. Owing to this, you won’t get a complete picture of the customer journey and undervalue critical aspects of your marketing efforts.
You can use various attribution models to evaluate this marketing metric. However, the choice of the attribution model depends on what you want to learn and how your organization works.
7. Marketing ROI
The next key performance indicator you should track is Marketing ROI. It allows you to measure how much revenue is being generated by a specific marketing campaign. ROI is a vital indicator to monitor and assess. To track this KPI, divide the number of leads your campaign generates by the opportunity value.
While marketing ROI is important to track, it can sometimes pose challenges. It’s not always possible to determine a direct return in certain situations, such as when a lead views an ad without clicking and then visits your site later.
8. MQL to SQL Ratio
MQL or Marketing Qualified Leads are prospects whose actions reflect they’re ready to purchase. They either downloaded buying guides or signed up for a free trial to showcase their interest.
SQL or Sales Qualified Leads are potential customers ready for a direct follow-up. To track the overall success of your marketing campaign, you must calculate MQL to SQL ratio. This percentage is a good indicator of your pipeline’s health. It also reflects your marketing team’s ability to qualify and screen leads.
MQL to SQL ratio indicates how well-aligned are your marketing and sales teams. The low percentage raises a red flag and reflects a disconnect between these two major departments.
There’s no recommended or ideal number, as the metric dramatically depends on the source of the lead.
For instance, website leads convert at an average of 31.3%, while referrals and webinars are 24.7% and 17.8%, respectively.
9. Unengaged Subscribers
Most users often subscribe to your emails or newsletters but aren’t as engaged with your content as they should be. That’s why marketers keep an eye on how many recipients unsubscribe.
However, not everyone takes the route of unsubscribing. Some people simply trash emails they are not interested in. Hence, it is vital to keep an eye on unengaged subscribers. To measure this metric, you must decide what an unengaged subscriber means to you. Is it someone who hasn’t checked out your email in three months, six months, or a year?
Consider implementing an automatic unsubscribe option to remove such recipients from the list. While this step may seem rude at once, it eventually helps you eliminate unengaged subscribers for good.
10. Opportunity-to-Win Ratio
Last but not least, the KPI that allows you to measure the progress of your marketing campaigns is an opportunity-to-win ratio. It offers an easy-to-understand value to check your success rate in converting high-value leads to paying customers.
This ratio lets you know the valuable team member who’s great at locating opportunities and closing deals. It is crucial data that helps train your sales team in specific areas. Divide the number of won opportunities by the number of opportunities created to calculate this metric.
Overall, this KPI indicates your sales organization’s effectiveness and measures your team’s ability to convert opportunities into sales. The higher the opportunity-to-win ratio, the better the productivity.