Imagine this scenario: First thing tomorrow morning, your executive team calls you into an impromptu meeting, and asks for a report on your marketing efforts. What numbers would you give them? What key performance indicators (KPIs) would you use?
No need to panic – just be prepared. Here are 10 KPIs that every marketer should be measuring:
1. Sales Revenue
You need to ensure that you can report that your sales revenue exceeds the expenses your marketing campaigns incur. Remember, reporting for the sake of reporting is pointless. Reports should lead to increased profits. This is the main difference between a proactive, results-oriented team and a backwards-oriented team.
2. Cost Associated Per Lead Acquisitions
How much is it costing you to acquire each lead? How many leads are generated by each one of your marketing efforts, and what’s the value of those leads? Consider this hypothetical breakdown of one company’s marketing campaign costs, leads, and value:
Notice that while the tradeshow was the most expensive, it generated the highest quality leads (valued at $50,000 each), but only $500,000 in annual revenue. On the other hand, the website cost half as much, but it generated much lower quality leads (valued at an average $250 per lead), and was responsible for almost $2 million dollars in annual revenue. Lastly, the webinar generated higher value leads than the website, but lost money. A company in this situation might decide to reconsider their investment in webinars.
3. Customer Lifetime Value
A customer’s value to your organization is only as good as the time they spend as your customer. What is your churn rate? And what are you doing to prevent churn? You need to know your churn rate and actively do things to reduce churn. To prevent churn, you need 360-degree view of your customer, and to constantly be monitoring customer satisfaction and usage of your product.
4. Online Marketing ROI
Reporting and analytics are huge here. Having the ability to report on and analyze website activity, as well as where the traffic is coming from, is vital to your online success. Once you have tools in place to analyze this data, you can optimize traffic sources that result in more lead traffic, ultimately increasing conversions on your site. Take a look at the following scenario:
The above chart represents the percentage of leads that arrive at Marketo’s site via Google Adwords, social media, webinar advertisements, backlinks, and tradeshows. Clearly, Google AdWords is the best place to spend our marketing dollars. Right?!
Lets take a deeper look at cost and value associated with each channel:
Google Adwords may generate the most traffic, but look at the value of the leads that come through that channel – at $300 each, they have the lowest value by far. Social channels generate much less traffic, but the value of social’s leads total nearly $5 million in annual revenue, at a much lower cost. Still think AdWords is the way to go?
5. Site Traffic : Lead Ratio
There are four important metrics to look at when it comes to your site traffic to lead ratio.
Unique visits to your website
Marketing Qualified Leads (MQLs) from website conversions
Conversions per site visit
Conversion by source
To drill down to a more granular level, you should break these metrics down by campaign, revealing which campaigns are most effective.
6. Marketing Qualified Leads : Sales Qualified Leads
Once a lead has met all of your marketing team’s criteria and is considered a Marketing Qualified Lead, your sales team needs to accept the lead as a Sales Qualified Lead. If the lead is not accepted by sales, the lead is put back on marketing’s radar. It is important to know the ratio of leads that get thrown back into marketing’s funnel, as well as leads that are accepted by sales. Once you know this, you can address any disconnects.
7. Form Conversion Rates
Is your content marketing effective? Are your marketing efforts to drive traffic to those landing pages working? You should always be optimizing your landing pages and content placement, utilizing A/B testing to improve conversion rates. Look at the following results:
Landing page B clearly works better. Awesome, lets pull Landing page A down, and we should see a dramatic increase in conversions!
Not so fast…..
It is always important to continuously A/B test. The same landing page that resulted in fewer conversions in September actually out-performed Landing Page B in October. Remember to stay on top of your A/B testing.
8. Organic Search
There are 4 primary metrics you need to monitor:
The percentage of leads that come from organic search.
The number of customers you acquire via organic search.
The percentage of leads that come in using branded key words.
The percentage of leads that come in using other terms.
SEO and offline marketing play a role here. What is it that causes someone to search for your product for the first time? Was it a billboard on Highway 101? Also, does the content on your website actively reflect what you are selling?
9. Social Media Reach
How many customers are you acquiring with Facebook, LinkedIn, Twitter, Google+, etc.? If you know how well each channel is working, you can more efficiently and effectively focus your social marketing.
10. Mobile Traffic
We live in an increasingly mobile world. As such, it’s important that we know the amount of traffic coming in from mobile devices. According to the latest bi-annual report from Knotice, 41% of commercial emails are opened on mobile devices. You need to have tools enabling you to report on mobile conversions. For instance, you may decide to contribute more of your marketing dollars to responsive design templates.
So the next time the executive team wants a full report, make sure you have a handle on these 10 key KPIs. Armed with these metrics, you’ll be able to prove that marketing is delivering qualified leads to sales. Even better, you’ll know how to optimize your spend next time, ensuring that your marketing team gets the biggest bang for their buck.