Most business people, from large enterprises to MSMEs, need to measure the performance and work efficiency of certain business process units with KPIs or Key Performance Indicators. Whether for employee development units (employee engagement), business sales (business sales), to marketing campaigns in a marketing technique. While sales activities can be measured with sales KPIs, they are almost similar to marketing activities which can also be measured with marketing KPIs.
Marketing KPIs are a measurable indicator related to the specific business objectives of a marketing campaign. These metrics can show business development progress and help measure marketing effectiveness at the end of the campaign by effectively analyzing your marketing strategy. So you can increase your company’s social media traffic, add leads, and make more profitable business sales.
Types of marketing KPIs
Having KPIs for marketing is very important as they can help companies understand:
- What are the marketing goals and objectives.
- What steps need to be taken to achieve this goal.
- Are the marketing results consistent with the marketing plan at the start.
- What are the means or sustainability plans that can be implemented to achieve better results.
Without marketing KPIs, it’s difficult for you and your marketers to create the best marketing campaign strategies and measure marketing results. For this, you need to know which marketing KPIs you need to measure and analyze. See the explanation below.
1. Turnover and sales volume
When measuring the success of marketing results, indicators of turnover and sales volume should not be forgotten. How not, as more and more of your business derives revenue from sales, the more likely you are to be successful in selling commercial products or goods in large quantities.
In other words, these two indicators become a benchmark for the effectiveness of the marketing program you are conducting. In addition, turnover and sales volume can also help you see and evaluate the performance of employees and the team as a whole (performance appraisal).
2. Sales target and growth
Based on the calculation of revenue from the sale of a number of business products, you will also measure the possibility of sales growth (sales growth) so that your business can achieve certain sales goals or targets (sales targets) .
Efforts to track these two marketing KPIs are very important in determining the type of successful marketing campaign. Because sales growth and goals will tell you what business strategy you could improve on, what areas of your marketing campaign to focus on, and more. As such, measuring sales growth is critical to the long-term health of your business.
3. Customer Lifetime Value (CLV)
According to Impactplus, Customer Lifetime Value (CLV) is the value or amount of revenue a business can expect over the average lifetime of a consumer as a customer. This metric will be very useful when comparing different marketing campaigns and channels to identify which online marketing (digital marketing) activities will benefit your business the most. Calculating the average CLV value can help your business build the best marketing strategy with the most effective marketing budget possible. And develop a reasonable cost per lead.
Customers with high lifetime value are loyal customers through customer loyalty programs that bring sustainable and long-term benefits to the business. This way, the business churn will be lower and the business will get more sales and positive reviews.
4. Cost per lead (CPL)
The next marketing KPI that is no less important to you is the costs incurred to obtain leads or the cost per lead. Generally, CPL is very useful when a company implements a digital marketing strategy, for example by promoting products on social networks or through Google Ads. Many marketers use Google Analytics to measure cost-per-lead effectiveness, especially companies that use marketing strategies with SEO or search engine optimization.
5. Customer loyalty
Customer retention is one of the customer management strategies in which you retain the customers you have gained to continue to be loyal to the brand (brand loyalty) through the continued use of your product or service. By measuring this indicator, it will be easy for you to know if your marketing campaigns have been effective in retaining existing customers.
Moreover, customer retention also helps you find out what is the best customer service strategy so that they can provide feedback and stay happy with your brand (customer satisfaction). And when a customer uses your product, it means that you trust them (brand authority) and your final sale rate has increased.
6. Return on investment (ROI)
Based on the results of revenue and customer lifetime value, you also indirectly measure the rate of return on investment or return on investment (ROI). Calculating the return on investment in digital marketing is very important to assess the performance and the monthly and annual revenue that your business derives from a particular marketing.
Then ROI is also important to help you plan your strategy and budget for the next marketing planning period. So whatever marketing activities your business uses, your return on investment will determine how you should continue to market in the future.
7. Customer Acquisition Cost (CAC)
Literally, customer acquisition cost or customer acquisition cost is a representation of the costs, steps, and strategic stages of digital marketing and outbound marketing campaigns. Because CAC is a benchmark for calculating the costs businesses spend to convince potential customers to engage with your brand and buy the products or services you offer (part of product knowledge).
This way you will know what is a more effective marketing strategy to attract customers (customer engagement). And you can also set a goal for the number of new customers you want to get in a certain period. Where then should you allocate your marketing budget appropriately.
8. KPI Marketing Tracks
In addition, customers or prospects are also a marketing KPI indicator that should not be forgotten. The logic is simple, the more leads you get, the more sales opportunities you have. As a result, there will be better opportunities for sales growth which will help you determine the best marketing campaign.
However, not all leads are created equal. Be sure to analyze between Marketing Qualified Leads (MQL) and Sales Qualified Leads (SQL) which are two different stages in the customer lifecycle of the same lead.
Marketing qualified leads is someone who is more likely to become a customer than a potential customer based on the information and behavior analyzed by the buying process. Whereas Qualified Leads are primary customers that your sales team accepts as worthy customers to follow up with direct sales. In other words, SQL shows how many potential customers have successfully converted and are ready to make a buying decision.
9. Marketing Conversion Rate KPI
The conversion rate or conversion rate is the percentage of visitors who come to your company’s website to achieve their goals while connected to the company compared to the total number of visitors. Thus, this metric focuses on the effectiveness of your marketing and advertising efforts through promotional ads, A/B testing of products or services, landing pages, social media marketing, email marketing, email and others.
To get a high conversion rate, you can do several strategies, such as:
10. KPI Marketing Engagement Rate
The last marketing KPI indicator is the engagement rate. Engagement rate is a metric that measures how engaged your audience is with your digital content. Whether on social networks or on websites.
Engagement or engagement referred to here are social metrics such as number of likes, comments, shares, number of clicks and others. By knowing the audience’s level of engagement with your business account, you have the ability to:
These are marketing KPI indicators or metrics that you need to measure and analyze. Also be aware that concept marketing KPIs are slightly different from regular marketing metrics.
KPI is a measurement concept related to progress. Existing metrics show performance related to specific projects and campaigns. Marketing metrics are a set of numbers that you need to track regularly to understand the status of your marketing campaigns and whether they are helping to meet KPIs and business goals.