A Key Performance Indicator (KPI) measures how effectively a company is achieving its marketing objectives. Setting up a marketing KPIs allows businesses to track the performance of their marketing campaigns.
Here are some of the most popular KPIs businesses use today:
1. WEBSITE TRAFFIC TO WEBSITE LEAD RATIO
This metric provides insights on how many of your website visitors are converting to leads. To calculate this, divide the number of visits by the numbers of leads generated from your website.
For example, if you have 100 website visits and 10 new website leads in a month, the traffic-to-lead ratio would be 10:1, which is a 10% conversion rate.
2. CUSTOMER ACQUISITION COST (CAC)
This is the amount of money to acquire a customer through marketing. CAC can help answer questions such as:
To quickly calculate CAC, use the following formula: (ALL MARKETING AD SPEND + MARKETING & SALES STAFF SALARY + RELATED OVERHEAD EXPENSES) / NUMBER OF NEW CUSTOMERS ACQUIRED
3. LIFE TIME VALUE (LTV)
LTV is the average revenue someone brings in their lifespan as a customer. LTV can help answer the question, “How valuable are these customers to me?”
When calculating the LTV, you might notice that some groups of customers and/or industries are more valuable than others. By separating your calculation per group, this allows you to focus more on high-value customers.
The formula is: (AVERAGE ANNUAL TRANSACTIONS PER CUSTOMER) x (AVERAGE PROFIT PER TRANSACTION) x (AVERAGE # OF YEARS A CUSTOMER REMAINS)
4. INBOUND MARKETING RETURN ON INVESTMENT (ROI)
Inbound marketing is creating education and valuable content to raise brand awareness.
For a simple calculation of your inbound marketing ROI, use can use the following formula, which combines both LTV and CAC: (LTV-CAC)/LTV
5. EMAIL MARKETING PERFORMANCE
Email marketing is still ranked as one of the most effective marketing channels today. Analysing your email marketing performance could be measured in various ways, including monitoring click-through-rate (CTR), conversion rate, open rate and unsubscribe rate.
6. SOCIAL MEDIA PERFORMANCE
The metric is to know whether or not people are going to your website through social media. To know what to track, make sure you’ve previously created some social media goals. As soon as you do that, you’ll be able measure the following:
Most social media platforms have their own analytics platform, including Twitter, LinkedIn, Instagram and Facebook, where you can track performances directly.
7. GOOGLE ANALYTICS
Google Analytics is a free analytics tool that provides businesses with insights on their website’s performance for both its marketing and content optimisation. Users can create custom reports, including dashboards, segments and alerts to measure your website performance according to your metrics.
At Traktion, our weekly Google Analytics report includes:
8. LANDING PAGE CONVERSION RATE
To check the effectiveness of your landing page, analyse your conversion rate. Go on Google Analytics and click on the attribution tab to set up a project and begin tracking its progress.
TIP: If you have a good amount of traffic on your website but a low conversion rate, you can try A/B testing and change elements of your landing page like the colour of CTA button or copywriting to make sure you’re attracting the right customers.
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