Whether you work on a marketing team or own your own business, the end of each quarter is one long discussion about performance. The driving factor of these discussions? KPIs, or key performance indicators. If you’re reflecting on the strengths and weaknesses of the past few months or are gearing up to dive into the upcoming season, it’s important to clearly define and stay on top of KPIs.
For those new to the sport, KPIs can be confusing and overwhelming. With so many measurements to analyze, which really matters? You’re only one person, after all, so you must allocate your time efficiently.
Our marketing experts at Charisma Communications investigate 8 important KPIs for your marketing team to keep track of each quarter. Let’s go!
What Are Key Performance Indicators?
Key Performance Indicators, called KPIs, are metrics that your business keeps track of to calculate the overall success of your marketing actions. Not every business will need to track the same numbers. What’s great is that you can configure KPIs to meet your unique needs.
Analyzing these values will help you decide what strategies work and which don’t. Our marketing specialists recommend incorporating the following KPIs into your strategy to see great business growth this year.
1. Cost Per Lead (CPL)
This KPI, known as Cost per Lead or CPL, helps you determine how cost-effective your marketing campaigns are at generating sales leads. It gives a dollar value to each lead generated by your campaigns.
The calculation for CPL is relatively straightforward: take the total costs associated with a campaign over a specified period and divide that by the number of leads generated during that same period. This helps marketers understand how much they are spending to acquire leads and make adjustments accordingly.
If CPL is higher than desired, then companies may need to invest more in design elements such as messaging and visuals or consider different channels for reaching potential customers. Investing more may sound counterintuitive, but it may help to lower your CPL.
2. Marketing Qualified Leads (MQLs)
MQLs are prospects deemed more likely to become customers, since they have already responded to a company's initial marketing communication, such as submitting a website form, clicking on an advertisement, or downloading an eBook. The way you define a qualified lead depends on your business.
The purpose of tracking MQLs is to identify potential customers who fit the target market for the product or service being offered.
Companies should use this metric to determine how successful their marketing campaigns are at generating interest from potential customers. Additionally, using this data allows organizations to focus their efforts on obtaining more qualified leads that will ultimately convert into sales.
3. Customer Retention
A customer retention KPI will help your business determine how many of your customers return and continue purchasing from you over time. When looking at customer retention data, businesses should pay attention to the average length of time customers remain loyal.
This helps identify trends in loyalty or defections and indicates when customers are losing interest in products or services. The data can be used to inform decisions about product re-launch, pricing updates, or other changes that may improve customer engagement and loyalty.
Understanding why certain customers have stayed with you longer than others could give insights into improving overall customer experience and satisfaction levels.
4. Cost Per Customer Acquisition
Cost per customer acquisition, or CPA, is an important KPI that helps marketers understand how much must be spent on average to make a sale. The metric measures the cost it takes a business to convert prospective customers into paying customers and includes any costs associated with marketing efforts such as advertising, promotions, or partnerships.
CPA can help companies optimize their marketing and ad spending by providing insights into which channels are driving more sales for less money. By monitoring the cost of acquiring each customer over time, businesses can make smarter decisions about where to allocate resources and build out campaigns that drive lower costs while still bringing in new leads.
5. Opportunity-to-Win Ratio
This KPI gives you a clear value to determine your rate of successfully converting qualified leads into closed sales. This helps you pinpoint in your team who is good at creating opportunities but not as strong at closing sales and vice-versa.
This data will help you better train your team in areas they may need more support.
6. Marketing ROI
Marketing ROI refers to the return on investment that a business has achieved from its marketing efforts. Measuring ROI helps businesses determine whether or not their campaign goals are being met, and if there is any room for improvement in terms of budgeting, targeting, and messaging.
Measuring ROI helps businesses identify areas where they could get more value out of their investments, such as by focusing on more cost-effective channels or optimizing existing tactics.
To track this KPI, divide the number of leads your campaign is generating by your opportunity value. Keep in mind, you may not always be able to determine a direct return in some situations, like when a lead views an ad without clicking and visits your site later. In these cases, it may be beneficial to send a follow-up survey to ask where customers heard of your brand.
Through leveraging data-driven insights gained from tracking ROI, marketers can make better decisions about which strategies to invest in moving forward.
Not sure where to start when measuring KPIs? Contact one of our marketing specialists so we can point you in the right direction!
7. Sales-Qualified Leads
Sales-qualified leads (SQLs) can come from various sources such as organic search results, emails, online advertisements, or even direct contact with potential customers. To qualify as an SQL, a lead must meet certain criteria determined by the company marketing team based on customer feedback and industry trends.
Tracking this KPI will help your company understand how many leads are being converted to sales.
8. Sales Revenue
This may seem like an obvious KPI, but it is one of the most important measurements for analyzing your business’s overall growth trends. It measures the total amount of money generated from sales activities within a period.
Sales revenue also provides an estimated value of how much customers are willing to pay for products or services, which can be used by companies when pricing their items to reach their desired target market.
Dive Deeper > How to Create a Killer Marketing Strategy in the New Year
Measure Success with Our Tampa Marketing Experts
Marketing KPIs can help you measure the success of your marketing campaigns, giving you insight into what works and what doesn’t. When used correctly, they can give you a competitive edge and provide you with invaluable data to inform your strategies.
Ultimately, it’s important to remember that while KPIs are incredibly useful, they should be used as part of a larger, holistic approach to marketing. If you need support in building a marketing strategy, reach out to our team at Charisma Communications today!
Experience success and have the numbers to prove it – 813-535-2218.
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