7 Most Important Marketing KPIs (You Need to Track These)
Marketing Key Performance Indicators or KPIs, are numerical marketing metrics used to measure the progress toward specific goals of marketing strategy and its assessment performance.
KPIs are key to any marketing strategy success and are closely linked with business growth.
They are specific and tied to a goal. Before setting KPIs you need to know your metrics, how to measure them, what they mean and select the ones that are the most relevant to measure the progress to a set goal.
The value here is not in the number of metrics you get but in how targeted and informative these metrics are to measure your success and inform the strategy.
In this article we share with you the seven marketing KPIs that you need to track for the benefit of your business:
Table of contents
- 1. Sales Metrics
- 2. User and Customer Acquisition
- 3. Quality and Quantity of Leads
- 4. Customer Lifetime Value (CLV)
- 5. Share of Voice (SOV)
- 6. Brand Awareness
- 7. Net Promoter Score (NPS)
- Conclusion to the most important marketing KPIs
1. Sales Metrics
Let’s be clear. A business cannot survive without sales and sales metrics provide a direct indication of the growth of your business.
It is one of the most intuitive marketing KPIs. However, in order to measure sales, you need to identify the metric that is the most relevant to your business model.
For example, your monthly revenue could be your KPI or you could decide to use profit as a KPI and also take into account the costs of making business.
How are sales metrics measured?
Sales metrics are straightforward as they represent the exact value generated by your sales.
It is wise to keep these numbers in your customer relationship management system (CRM) or your financial dashboard. Moreover, you can use the enhanced eCommerce tracking in Google Analytics to attribute sales of your marketing efforts.
Remember the limitation of online tools and use accurate data for the KPI.
2. User and Customer Acquisition
Growing your user-base doesn’t always equal profit. However, it is key to build a strong relationship with target consumers.
How is acquisition measured?
Take full advantage of the numbers in your CRM. You will need customers to sign up for tracking their numbers.
3. Quality and Quantity of Leads
Quantity and quality of leads are key KPIs for anyone owning subscription-based businesses.
This KPI reflects the performance of your marketing communication in attracting the right users to your website and to convert them into buyers.
When growing a customer base, your main focus should be on the quality of the leads you attract to your website. Indeed, quantity without quality is pointless.
You want people that love and need what you do, not a bunch of curious people from the internet.
How to measure quantity and quality of leads?
Measuring the quantity and quality of leads is easy as you have all the information in your CRM.
However, tracking quality leads demands more work and planning. It also gives you the lead scoring.
To measure leads, you need to develop an automated system that records the leads and scores them based on data.
You need to consider the below points for evaluating the quantity and quality of leads :
● The purchasing power of the company
● Setup and trial tier
● Customer behavior and action at your place (app or web)
● Conversation of user with the sales team
● Data that you collect from customer registration
Some CRM platforms also provide lead scoring like Hubspot as they have the built-in functionality. But it may not be the right solution for many cases, so it is advisable to consult with an expert.
4. Customer Lifetime Value (CLV)
Customer Lifetime Value or CLV is a marketing KPI that provides a picture of the business’s long-term and financial viability by estimating the value a customer will spend on its products or services.
High CLV is an indication of a great product or service, brand loyalty, and recurring revenue acquired from existing consumers. Thus it is important to work on increasing your average customers’ worth.
How to measure CLV?
The formula used to measure Customer Lifetime Value is:
Avg. Order Value x Avg. Annual Purchase Frequency x Avg. Customer Lifespan
For this formula, you need to have a record of sales from the past few years.
Once you have it, CLV will help you understand which of these three metrics need more improvement as they individually and collectively affect the CLV.
5. Share of Voice (SOV)
Share of voice is a measure of the market your brand owns compared to other brands in the same industry. It is a great indicator of brand awareness and engagement rate.
Put simply, Share of Voice represents the size of your media spending compared to the competition.
SOV is a strong indicator of how your market share will perform. If SOV increases, your market share should follow.
Once your market share overcomes SOV it creates excess SOV (eSOV).
To measure SOV effectively, pick an SOV metric for each channel.
How to measure SOV?
You can measure SOV with different methods depending on each marketing channel that is being used. Examples are measuring SOV with organic search by using your main keywords, looking at Impression Share on Paid Search, Estimated Brand mentions relative to competitors on social media, and Gross rating points (GRP) for TV ads.
6. Brand Awareness
Brand awareness represents the level of awareness your target audience has about your brand. The higher the brand awareness, the higher the chance is that people think of this brand first when looking for a product or service.
For example, the brands that come first for mobile phones are Apple and Samsung.
To estimate your brand awareness, measure the two points below:
● Saliency. How often does your brand come to mind in your industry? Which percentage of the market knows about your brand?
● Positioning. Does your brand resonate with your target audience? How effective is your marketing communication to communicate your brand’s values, mission, and identity?
How to measure brand awareness?
The best way to measure brand awareness is true market research. You need to ask questions to a representative sample of the market for it to be significant. The best way to do that is to work with market research agencies and learn from their consumer’s science knowledge.
7. Net Promoter Score (NPS)
NPS scores measure customer experience and predict business growth. It shows the percentage of people that would recommend your services or products to someone else.
NPS is measured on a scale going from 0 to 10. The score the user selects dictates if they are more or less likely to promote your products or services.
People who select a score between 0 and 6 on the NPS scale are detractors, anyone between 7 and 8 is passive and people above 8 are promoters.
NPS score is obtained by subtracting the percentage of detractors from promoters’ percentage.
The score ranges between -100 and +100. The higher the number the more likely they are to recommend your products or services.
A score above 70 is exceptional, but it also depends on the relevant industry. It is one of the easy-to-measure marketing KPIs that reflects your customer loyalty and satisfaction.
How to measure NPS?
NPS can be automatically measured using some software that does the survey distribution for you.
The key is to target as many people as possible within your customer base.
Working with a consumer science agency is beneficial to collect qualitative data about the motivation behind a user’s choice.
Conclusion to the most important marketing KPIs
You might be wondering why Return of Investment and Customer Acquisition weren’t mentioned. The answer is that they offer a short-term view of your performance and are not the most optimal for long-term growth.
Measuring the right marketing KPI to inform your strategy is a key factor of success.
So next time you write a marketing strategy, make sure to set strategic marketing objectives and to use relevant KPIs to the channels you are using.
Got questions about Marketing KPIs or need support growing your business online? Contact the First Page DigitalTM Team today and get a free consultation.