Key performance indicators (KPIs) measure how well your company is performing at achieving a particular goal or objective. Each aspect of a business has its own KPI, whether it is financial, marketing, sales, or operational.
In essence, KPIs are measures of performance over time. In your automation software, you can create custom dashboards for analyzing and reporting on KPIs.
Let's look at some examples of KPIs now that we understand what they are.
KPI Examples
1. Customer Acquisition Cost (CAC)
An organization's customer acquisition cost (CAC) measures how much it costs to convert a lead into a customer.
Making important budgetary decisions is aided by this metric, which helps you improve your marketing.
For example, you don't want to spend too much money acquiring a customer if it won't result in profits. Essentially, this helps businesses determine how much money to spend on attracting customers.
2. Lifetime Value of a Customer (LTV)
The lifetime value of a customer can also be used to determine how much money to spend on marketing. A business can expect to make a certain amount of revenue from one customer according to this metric.
Comparing this metric to CAC is useful. If your CAC is higher than your LTV, then you're probably spending too much on customer acquisition.
3. Return on Investment (ROI)
Marketing ROI refers to the amount of money you gain compared to what you spend on marketing.
The return on investment is calculated by subtracting marketing expenses from sales growth and dividing that by marketing cost.
Marketers should keep in mind that it may be difficult to directly correlate marketing campaigns with sales growth. To determine your marketing cost, subtract your average organic sales growth from your sales growth and divide it by your marketing cost.
4. Return on Ad Spend (ROAS)
In order to determine the success of your ad campaigns, you can use return on ad spend as a KPI. A metric that measures the revenue generated per dollar spent on advertising. Usually, it's a ratio. Let's say you made $10 for every $1 spent on advertising. Your ROAS for that campaign is 10:1.
5. Marketing Qualified Leads (MQL)
A MQL is a lead who has engaged with your company and may become a more serious prospect if you nurture the relationship. The KPI helps your marketing team understand how many leads they are generating.
Your marketing team can also measure how many MQLs become SQLs and then customers by comparing them to sales qualified leads (see below).
6. Sales Qualified Leads (SQL)
MQLs can eventually become sales qualified leads if they are nurtured correctly. You can think of an SQL as a prospective customer who is ready to talk to one of your salespeople.
It is likely that your marketing department has researched and vetted these leads. Once again, this KPI can help your marketing team understand how many leads are talking to your sales team.
7. Follower Growth
You might be responsible for managing social media accounts for your company as a marketer. Follower growth is a useful KPI to track if you work on the social team.
Your social media team most likely aims to increase brand awareness and interact with your audience. A great way to measure success is by increasing your followers.
8. Conversion Rate
Visitor conversion rate is the percentage of visitors who complete a desired action. It could be anything from completing an online form to signing up for a service or making a purchase.
Tracking this KPI can help you determine how successful you are at attracting leads.
If the desired action was filling out a web form, measuring your conversion rate might show you that your web page isn't converting many leads. Then you might want to rethink your strategy if that's the case.
9. Website Visitors
Your main goal as a marketer is to attract people to your business. Attracting website visitors is a great way to do that. The number of website visitors is an important KPI because it can be used to track the success of several campaigns at the same time.
If you track organic web traffic, you're measuring your SEO team's effectiveness. For instance, if you're tracking social media visitors, you could use web visitors to see how many referrals your social team sends your way.
10. Social Media Engagement
Social media plays a major role in marketing. Engagement is a key KPI for social media. It is possible to track likes, shares, comments, messages, tags, or mentions. Engaging a customer or lead in any way counts as engagement. In order to analyze the success of your social media posts, you need to measure engagement.
11. Referral Traffic
In order to understand where your web traffic is coming from, you should monitor referral traffic.
In addition to helping you understand how most people discover your company, this KPI is an important one to track. Your marketing strategy could benefit from this information.
12. Net Promoter Score (NPS)
Customer satisfaction is measured by Net Promoter Score. Using this KPI, you can monitor whether your customers are likely to recommend your business to their friends.
It is likely that you will leave additional space for comments when you calculate your NPS. Your customers can provide you with direct, actionable feedback and insights through this metric.
Listen to your customers and truly understand them as a marketer. You will be able to do that with the help of this KPI.
13. Organic Traffic
Your SEO efforts should be measured for success. In order to do so, you will likely track organic traffic and keyword performance KPIs.
Search engine optimization tools allow you to monitor how your company ranks for specific keywords on search engines. Your overall organic and SEO strategy will be informed by this KPI.
14. Event Attendance
Every campaign you run as a marketer will have KPIs.
You'll most likely track event attendance if you run an event, for example. Using this KPI, you'll be able to see how well your marketing team did at attracting people to your event.
15. Customer Retention
Even though customer retention might not seem like a marketing KPI, it is actually an important one.
Marketing campaigns benefit from tracking customer retention because you can use the information in your messaging. Furthermore, this metric helps you better understand your customers, so you can market more effectively to them. Marketers use KPIs to measure their success.
Keep in mind that the KPIs we discussed in this post are spread across multiple departments and customer touchpoints. Since you'll need to track both short-term and long-term campaign success, KPIs will be used almost everywhere. To put it another way, you need to keep your data organized.
Here, a unified marketing analytics solution is recommended. In addition to measuring and comparing metrics across all of your marketing channels, it allows you to gauge how each marketing tactic contributes to your overall marketing plan.