No one wants to support a marketing activity that's losing their company money. Without the right key performance indicators (KPIs), however, your company might be reporting and making decisions based on misleading information, or even worse, assumptions driven by no data at all.
When it comes to setting and tracking marketing KPIs, many marketers and business owners are fully aware of the usual suspects: sales revenue and leads. But what are the other key metrics your business should be tracking on a month-to-month basis?
1. Cost of Customer Acquisition
One of the most important numbers a company needs to know about their business is the cost of acquiring a new customer. By dividing the marketing department’s monthly budget with the number of new customers acquired that month, you’ll understand how much you are spending to convince a visitor to become a paying customer.
If you spend $20,000 in marketing for the month and gain 100 customers, your customer acquisition cost is $200. If you plan to grow your customer base by 1,500 customers by the end of the year, you’ll need to spend $300,000.
2. Customer Lifetime Value
Once you understand how much it costs to acquire a customer, you need to know how much that customer is worth. If it costs $100 to acquire a customer who only spends a lifetime value of $50, there’s a clear problem in your business model that needs to be addressed.
To calculate a customer’s lifetime value, multiply the average transaction amount by the number of repeat sales and the average retention time. Using this formula, if an average customer spends $50 per transaction and makes three purchases a year over a span of five years, their LTV is $750, so it’s ok to spend $100 acquiring a customer for multiple purchases of a lower value item.
Related reading: How to Calculate the Lifetime Value of a Customer
3. Web Traffic Metrics
Web traffic metrics will tell you how effective your digital marketing efforts have been. Web traffic can be found (along with corresponding demographics) in Google Analytics, and increasing traffic inevitably increases sales and revenues. Sessions, duration, page views, bounce rate, and users are all valuable web traffic metrics to know, and all are available through Analytics reports.
Related reading: The Absolute beginner’s Guide to Google Analytics
4. Social Media Reach
Social media continues to be one of the most important digital marketing statistics as conversion rates are high and more than 1.8 billion people use these platforms globally. Twitter, Facebook, LinkedIn, and Pinterest all track post reach within the application. By monitoring these numbers, you can gauge the effective contribution of social media to online conversions.
5. Landing Page Conversion Rate
A landing page is the first impression your brand makes on a new visitor, so it’s important that the format and layout be intuitive and promotes easy conversion. To fully optimize your website for conversions, it’s important to know which landing pages are performing well and which need improvement. One page may appear less often but have a higher click-through rate while another may generate traffic with low conversions. Using Google Analytics, you can check your website’s keyword and landing page traffic, and follow user interactions.
Related reading: 7 Conversion Rate Truths That Will Change Your Landing Page Strategy
6. Website Leads
The entire point of having an online presence and content marketing strategy is for lead generation. Because of this, marketing departments often lean on lead generation as an important metric to validate ROI. Website leads often come back more than once, so tracking return visitors all the way through new customer acquisitions is necessary to provide a full picture of website lead generation.
7. Website Lead to Marketing Qualified Lead (MQL) Conversion Rate
An MQL is a lead that is likely to become a customer based on their reception to marketing initiatives. This could include filling out a web form, signing up for a webinar, subscribing to your blog, or otherwise showing increased interest and engagement.
Related reading: How to Expose the Best Leads to Your Sales Team
8. MQL to Sales Qualified Lead (SQL) Conversion Rate
A MQL is a customer at the beginning of a sales funnel, while an SQL is a customer at the end of the funnel. These are customers who are very likely to make an immediate purchasing decision and should be contacted by the sales team right away.
9. Email Conversion Rate
Email marketing metrics help businesses quantify the effective return of their marketing efforts. By tracking the number of people who respond to an email message, how many become customers, and how much each customer is worth, you’ll have the foundation for an effective marketing strategy.
Tracking these statistics proactively (as it’s difficult to go back and track them after the fact) will provide the confidence necessary to steer your business to the next level as you move forward. Learn more strategies to use marketing KPIs by downloading our free ebook, “Marketing Metrics”.