Article | 6 minute read
10 KPIs You Need to Track
Being able to measure and analyse performance is more important than ever for marketers. But which KPIs are important to review, and how can they help you achieve your business goals? We list 10 KPIs that will help you succeed.
It's easy to stare blindly at data without understanding the correlation or the outcome. But whether it's traffic, reach or number of likes, the higher the results the better, right? That may be true, but those high numbers don't necessarily lead to more business or increased sales. You're reaching a lot of people, but not selling more. Tricky, isn't it?
With the right Key Performance Indicators, KPIs, you can increase the number of potential buyers, what content is converting potential leads and what activities are strengthening the relationship with your audience.
What's a good KPI?
It can be a challenge to understand what is relevant to measure and what is not. The key to selecting the right KPIs is to start from your objectives.
Which activities are important for your results?
This could be anything from a whitepaper, social media posts or campaigns. Get the marketing team together and talk to the sales department. Pin down which key performance indicators have a direct impact on your results.
Start with the following:
Relevant: KPIs that measure the goals you're trying to achieve.
Time-related: KPIs that can be monitored and compared over time, with focus on performance.
Channels: KPIs that can be derived from multiple channels. This is to get a better overall picture and comparison between activities.
Why track KPIs?
-
Engagement: possibility to monitor all results.
-
Control: possibility to make rational decisions based on data.
-
Knowledge: ability to analyse, measure and adjust for the best possible outcome.
10 KPIs you should implement in your marketing strategy
1. Conversion Rate
Conversion rate means that you track how many of your website visitors have completed a conversion. You can do a general measurement of all the traffic you generate, or measure specific activities: campaigns, newsletters or webinars.
The data can give you insights into how your activities are performing, but also hint at ways to improve your site.
For example, do you need to simplify the buying journey or clarify your services? Where do visitors get stuck? Monitor their behaviour and see what you need to improve.
You can easily measure your conversion rate by dividing the number of conversions by the number of visitors.
2. Cost Per Acquisition (CPA)
CPA refers to cost per conversion. That is, how much you need to pay for a customer to convert. This data is useful for monitoring campaigns and advertisements, for example.
CPA is calculated as follows: marketing costs / number of conversions.
3. Conversion Value
How much is a conversion worth to you? The KPI is based on an estimate, except in the case of an actual purchase. What is the probability that the recipients will convert and what would it be worth to you?
Based on knowledge and data from the buying journey, you can make an estimate or base the cost on the actual product.
4. Return of Investment (ROI)
ROI is a classic KPI that a large percentage of marketers value. ROI measures the return on an investment related to what it cost. The result can be used as a benchmark for future marketing strategies, as you can calculate what generated profit, and see clear areas for development.
You calculate ROI using CPA and conversion value. The formula is: profit - cost / cost.
5. Customer Acquisition Cost (CAC)
The CAC tells you how much a customer or sale has cost you on average. This can be calculated for a particular channel, activity or business. It is also common to calculate the CAC as a percentage of the sales value.
In many cases, this figure symbolises a limit on how much can be spent on media. Let's say your CAC % is 10%. So the cost of a sale or new customer should not exceed 10% of what the sale generates.
The CAC % is calculated as follows: cost of customer/sales/sales value x 100.
6. Customer Lifetime value (CLV)
CLV stands for the cost of generating a new customer. This is mainly based on marketing and sales costs. But also loyalty costs in the form of discounts, service and guarantees. The key figure gives you insights into the value of retaining customers over time and investing in relationship-building marketing.
CLV is calculated by the following formula: Customer Value x Average Customer Lifespan.
7. Return on Ad Spend (ROAS)
This KPI helps you to understand how much value a campaign generates. By measuring ROAS, you as a marketer can track how much revenue the campaign has generated in. This information is important for advertisers' optimisation efforts.
You calculate ROAS by dividing ad spend by ad revenue.
8. Marketing Qualified Leads (MQL)
MQL stands for a lead that has shown a strong interest in a brand. In most cases, the lead has been converted through marketing activities.
Examples of interest-generating activities are downloaded material, saved products in a shopping basket or submitted contact details. The leads are valuable. Take advantage of them and follow them up to ensure they complete the entire customer journey.
9. Sales Qualified Leads (SQL)
A Sales Qualified Leads stands for the leads that you deem ready to be contacted for sales. This means the lead is current and of high quality, based on previously demonstrated commitment and intent to purchase from your brand. This enables you to target the right people and invest your time where it will do good.
10. Follower Growth
This is an important KPI for those actively working with social media with the intention of growing your brand. Which posts are generating in increased reach? Can you optimize your hashtags? Or work more with stories?
There are several strategies for increasing engagement on social media, both in terms of reach, follower count and likes. Often the activities go hand in hand. Monitor your posts on a daily basis to gain an understanding of how you can work smarter to increase followers on your channels.
With the right KPIs, you can gain a better understanding of how your website is performing, what marketing activities are generating results, and which leads you should be following up on. Evaluate which KPIs are important for you to achieve your goals.
Article | 6 minute read
10 KPIs You Need to Track
Published: 27 February 2023
Being able to measure and analyse performance is more important than ever for marketers. But which KPIs are important to review, and how can they help you achieve your business goals? We list 10 KPIs that will help you succeed.
It's easy to stare blindly at data without understanding the correlation or the outcome. But whether it's traffic, reach or number of likes, the higher the results the better, right? That may be true, but those high numbers don't necessarily lead to more business or increased sales. You're reaching a lot of people, but not selling more. Tricky, isn't it?
With the right Key Performance Indicators, KPIs, you can increase the number of potential buyers, what content is converting potential leads and what activities are strengthening the relationship with your audience.
What's a good KPI?
It can be a challenge to understand what is relevant to measure and what is not. The key to selecting the right KPIs is to start from your objectives.
Which activities are important for your results?
This could be anything from a whitepaper, social media posts or campaigns. Get the marketing team together and talk to the sales department. Pin down which key performance indicators have a direct impact on your results.
Start with the following:
Relevant: KPIs that measure the goals you're trying to achieve.
Time-related: KPIs that can be monitored and compared over time, with focus on performance.
Channels: KPIs that can be derived from multiple channels. This is to get a better overall picture and comparison between activities.
Why track KPIs?
-
Engagement: possibility to monitor all results.
-
Control: possibility to make rational decisions based on data.
-
Knowledge: ability to analyse, measure and adjust for the best possible outcome.
10 KPIs you should implement in your marketing strategy
1. Conversion Rate
Conversion rate means that you track how many of your website visitors have completed a conversion. You can do a general measurement of all the traffic you generate, or measure specific activities: campaigns, newsletters or webinars.
The data can give you insights into how your activities are performing, but also hint at ways to improve your site.
For example, do you need to simplify the buying journey or clarify your services? Where do visitors get stuck? Monitor their behaviour and see what you need to improve.
You can easily measure your conversion rate by dividing the number of conversions by the number of visitors.
2. Cost Per Acquisition (CPA)
CPA refers to cost per conversion. That is, how much you need to pay for a customer to convert. This data is useful for monitoring campaigns and advertisements, for example.
CPA is calculated as follows: marketing costs / number of conversions.
3. Conversion Value
How much is a conversion worth to you? The KPI is based on an estimate, except in the case of an actual purchase. What is the probability that the recipients will convert and what would it be worth to you?
Based on knowledge and data from the buying journey, you can make an estimate or base the cost on the actual product.
4. Return of Investment (ROI)
ROI is a classic KPI that a large percentage of marketers value. ROI measures the return on an investment related to what it cost. The result can be used as a benchmark for future marketing strategies, as you can calculate what generated profit, and see clear areas for development.
You calculate ROI using CPA and conversion value. The formula is: profit - cost / cost.
5. Customer Acquisition Cost (CAC)
The CAC tells you how much a customer or sale has cost you on average. This can be calculated for a particular channel, activity or business. It is also common to calculate the CAC as a percentage of the sales value.
In many cases, this figure symbolises a limit on how much can be spent on media. Let's say your CAC % is 10%. So the cost of a sale or new customer should not exceed 10% of what the sale generates.
The CAC % is calculated as follows: cost of customer/sales/sales value x 100.
6. Customer Lifetime value (CLV)
CLV stands for the cost of generating a new customer. This is mainly based on marketing and sales costs. But also loyalty costs in the form of discounts, service and guarantees. The key figure gives you insights into the value of retaining customers over time and investing in relationship-building marketing.
CLV is calculated by the following formula: Customer Value x Average Customer Lifespan.
7. Return on Ad Spend (ROAS)
This KPI helps you to understand how much value a campaign generates. By measuring ROAS, you as a marketer can track how much revenue the campaign has generated in. This information is important for advertisers' optimisation efforts.
You calculate ROAS by dividing ad spend by ad revenue.
8. Marketing Qualified Leads (MQL)
MQL stands for a lead that has shown a strong interest in a brand. In most cases, the lead has been converted through marketing activities.
Examples of interest-generating activities are downloaded material, saved products in a shopping basket or submitted contact details. The leads are valuable. Take advantage of them and follow them up to ensure they complete the entire customer journey.
9. Sales Qualified Leads (SQL)
A Sales Qualified Leads stands for the leads that you deem ready to be contacted for sales. This means the lead is current and of high quality, based on previously demonstrated commitment and intent to purchase from your brand. This enables you to target the right people and invest your time where it will do good.
10. Follower Growth
This is an important KPI for those actively working with social media with the intention of growing your brand. Which posts are generating in increased reach? Can you optimize your hashtags? Or work more with stories?
There are several strategies for increasing engagement on social media, both in terms of reach, follower count and likes. Often the activities go hand in hand. Monitor your posts on a daily basis to gain an understanding of how you can work smarter to increase followers on your channels.
With the right KPIs, you can gain a better understanding of how your website is performing, what marketing activities are generating results, and which leads you should be following up on. Evaluate which KPIs are important for you to achieve your goals.