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GUIDE ABOUT 4 MARKETING KPIs | Marketing is defined as the process of getting goods and services to the right consumers. It also involves promoting products or services to gain customers. A good marketing strategy will focus on building brand loyalty and increasing customer satisfaction.
The goal of a marketing campaign is to attract and retain customers and create brand loyalty. The best marketing strategy will satisfy your customers’ wants and build a strong brand image.
To create a clear marketing strategy, determine what key performance indicators you need to measure. Digital agencies in Preston and other large cities ensure that they have KPIs and monitor them regularly to check the effectiveness of their campaigns.
If you’re trying to monitor your marketing campaigns or the effectiveness of your strategies, here are some marketing KPIs you should measure:
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Leads
A marketing lead is a person who shows interest in purchasing your products or transacting with your business. This person makes them a potential customers.
Your marketing strategy should generate as many leads as possible. A lead is a vital part of a business; therefore, marketers should be cautious to ensure that they’re targeting the right customers.
There are three types of leads, depending on their position in the marketing funnel:
- Marketing qualified leads (MQLs) – These leads appear in the middle of the sales funnel. These people have expressed continuing interest in your business.
- Information qualified lead (IQLs) – These are the leads that happen at the beginning of the buyer’s journey. During this stage, your marketing or sales team offers helpful information to a potential lead regarding any inquiry they have on your products or services. Your team might ask the person regarding their contact information if you want to contact them to provide more materials or information.
- Sales qualified lead (SQLs) – These are leads found at the bottom of your funnel. At this point, the person has already expressed their willingness to make a purchase or transact with your business.
If you’ve increased the number of leads, you’ll know that your promotional tools and marketing efforts have paid off.
However, if your leads are in decline, there’s a problem with your campaigns, and you’d need to evaluate which strategy isn’t working.
Must Read:Digital Marketing Tips | How to Get the Most Out of Your Digital Marketing
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Cost Of Customer Acquisition
Customer acquisition cost is a crucial marketing KPI because it shows the overall cost of getting a new customer. It can be calculated by dividing your total marketing expenses by the number of new customers you acquire.
For example, your business spent USD$1000 on marketing materials in a year. With that, you’ve acquired 1000 new customers. Calculating the CAC or customer acquisition cost, it would be USD$1 per new customer.
If your business only brought in 500 new customers with the same marketing costs, your CAC would be USD$2 per new customer.
What are the costs involved when it comes to your customer acquisition efforts? These include:
- Advertising costs
- Costs of your marketing and sales team
- Publishing and production costs
- Creative costs
If you want to improve your CAC, you need to improve your conversions. If you have a website or e-commerce site, you can use tools like Google Analytics to see why your potential leads aren’t becoming paying customers.
You can also improve your marketing campaigns by adding value to your offerings. You can ask your target audience what they want to see or receive in exchange for purchasing your business.
Must Read:Best Ways To Increase Your Website Traffic For Making More Sales
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Website Traffic To Website Lead Ratio
If you have a website and use it for your marketing efforts, you need to monitor your website traffic to lead ratio. This measurement will indicate whether or not you’re having difficulty converting your website’s visitors into leads. Your website’s lead ratio is a key indicator of whether your content strategy is working or not.
It can be calculated by dividing your website traffic by the number of leads you’ve generated. For example, you’ve logged a total of 100,000 website views in a month.
Out of those 100,000 views, only 5,000 of your visitors became a lead or purchased your business. This means that your website traffic to lead ratio is 0.05 or five percent.
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Sales Churn Rate
Your churn rate measures the number of customers who stopped using your products or services each month. It helps you track your sales growth monthly and act accordingly.
The churn rate is calculated by deducting the number of customers you have at the beginning of the month from the number of customers you have at the end of the month. You divide this value by the number of customers you have at the end of the month.
For example, you have 500 customers at the beginning of the month and reduce it to 450 at the end of the month. So, 500 minus 450 is 50. You divide 50 by 500, and you get a 0.10 or 10% churn rate.
This metric gives you a realistic overview of your customer retention strategies. Understanding this metric is also important because it provides an overview of the overall satisfaction of your existing customers. This is because it’s easier and cheaper to keep your current customers happy than acquire new ones.
If your churn rate is increasing, there might be something wrong with how you run your business. It could be that the quality of your products is decreasing or you have poor customer service.
Your marketing efforts shouldn’t only focus on making new customers, but also keeping your existing customers loyal and happy.
With that, you should ensure your marketing efforts also include customer retention strategies. Your marketing team can provide discounts or coupons for repeat orders, or give awards to loyal customers.
Must Read: How To Stay Ahead Of Changing Consumer Behavior?
Final Thoughts
Marketing is one of the key areas to focus on your business. That’s why it’s essential to always have and track your marketing KPIs.
Marketing KPIs help managers determine which budget spending strategies work. They also help managers evaluate the effectiveness of marketing campaigns.
These are four of the many marketing KPIs you should be monitoring and measuring constantly. Marketing KPIs, like leads, traffic to leads ratio, and churn rates, are necessary to evaluate the effectiveness of your marketing campaigns.
KPIs, like CAC, will help you determine if your marketing investments are giving you enough sales or revenues. Without these KPIs, your marketing efforts will be running blindly, and you won’t know if your strategies are working to give you enough sales to run your business efficiently.
