A GUIDE TO MARKETING. KPIs
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- Charity Blair
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1 A GUIDE TO MARKETING KPIs
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3 TABLE OF CONTENTS Introduction 1/ Focus on relevance 2/ What business are you in? 3/ Tie KPIs to your business goals 4/ KPIs of an marketing funnel 5/ Do it your way 6/ Look at the facts 7/ Don t allow data silos
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5 INTRODUCTION What is the purpose of marketing in your company? How do you know whether it brings value to your business? Is your communication tailored to subscriber needs? Are your subscribers engaged? Do you earn a return on your investment or are you wasting valuable resources on your campaigns? If you find these questions difficult to answer, this guide might be just what you need. Read on and find out what key performance indicators (KPI) are. Learn how to align KPIs with your business goals and understand the true meaning behind the numbers. After reading this guide, you ll be able to measure the effectiveness of your marketing campaigns and make better decisions based on information you collect. This guide will help you develop your marketing skills and progress from an instinctive gut-driven approach to a professional data-driven approach. Everything can be measured Online marketing is amazing. Seriously. There are lots of great online marketing tools that enable you to gather huge amount of valuable data without leaving your desk. If you can make use of it, you can optimize your marketing activities and go beyond your desired results. marketing is a marketing channel that features big data analytics. An marketing platform offers you lots of detailed information, such as open rate, click-through rate, progress toward goals, social media impact, bounces, unsubscribes, and spam complaint ratio. You can specify your target audience and launch list building campaigns to attract a database of people who match the profile. Then you can segment your list based on user behavior and send personalized s to each subscriber. You can track user activity in real time and find out whether your marketing resonates with your audience. You can test individual elements of an and optimize the smallest details of individual campaigns.
6 You can set long-term goals, such as to increase traffic to your website by 25% in the next three months, increase conversion by 25% by the end of the year, or boost sales by 20% in the next six months. Finally, you can run loyalty programs that surprise and delight customers and substantially increase retention. Don t measure everything It feels great to have access to so much data. However, there is a risk of getting lost in this immense amount of information. If you try to keep track of everything, you ll waste a lot of time. First, you need to understand what you want to measure. Success depends on your ability to uncover the meaning behind the metrics and translate it into business objectives. Second, you need to choose the right kind of information from a business perspective otherwise you may get stuck in the clutter.
7 1 CHAPTER 1 FOCUS ON RELEVANCE Let s start with a fundamental question: what is a key performance indicator? In short, a KPI is a measurable value that represents the success of a particular business activity, such as subscribers who convert to customers, number of purchases, or messages shared. Focus on selected KPIs There are hundreds of KPI metrics. The trick is to find the ones worth tracking. To do that, you need to understand your business goals and find the right KPIs to track your progress. Only then will you be able to see the reason behind each campaign and the logic behind the analytics. Vanity vs. performance Go beyond vanity metrics. Impressive numbers (number of subscribers, likes, downloads or page views) don t necessarily translate into business results. Let s take the number of subscribers as an example. Your list is fundamental to your marketing performance, and you want to grow it as much as possible. But the quality of your list matters. If you buy a list of a million names, you can expect serious problems with deliverability, low click- through rates, and a high complaint rate. As you can see, more doesn t always mean better. And the number of subscribers alone doesn t provide any valuable information.
8 2 Figure out the metrics that show the true health of your business. Instead of the number of subscribers, pay attention to click-through rates, bounce rates, conversion, and unsubscribe rate campaign performance metrics that allow you to determine the quality of your list. Let s take a closer look at your company. A detailed description of your business can help you choose the right kind of data to collect and analyze.
9 3 CHAPTER 2 WHAT BUSINESS ARE YOU IN? The answer to this question is crucial. It may change over time, so make sure you update your strategy regularly and keep track of the right metrics at each stage of business growth. Remember everything has its meaning. It makes a difference if you are a B2B or B2C company, offer products or services, are an e-commerce or offline retailer. You can use the Business Model Canvas to help you come up with the right details. Think of your business and determine the following:»» Industry»» Business model»» Stage of growth»» Business goals Examine the current state of your business to get a clear view of the milestones ahead. With this information, you can align your marketing strategy with your business objectives and use KPIs to measure performance.
10 4 Business Model Canvas Copyright Dr. Alexander Osterwalder, Yves Pigneur
11 5 CHAPTER 3 TIE KPIS TO YOUR BUSINESS GOALS What are the business goals that underpin your marketing strategy? What is the planned outcome of your campaigns and the reason for investing time and money in execution? Business goals differ from company to company. But more often than not, goals involve these areas. ROI There are hundreds of KPI metrics. The trick is to find the ones worth tracking. To do that, you need to understand your business goals and find the right KPIs to track your progress. Only then will you be able to see the reason behind each campaign and the logic behind the analytics.
12 6 Revenue Revenue is the amount of money brought into a company by business activities. revenue is the total revenue generated from your marketing (individual marketing campaigns, loyalty programs, etc.) Qualified leads In the early stages of the marketing funnel, the key objective is to generate qualified leads prospects who would benefit from using your product or service. Measure the number of qualified leads you generate, so you can make better decisions about list building strategies. Cost per acquisition How much does it cost to acquire a paying customer? This is one of the most important metrics to focus on when running promotional campaigns. Track your links and calculate the number of customers you generate within a certain budget. Sales Analyze the impact of your marketing strategy on sales. Look at areas such as traffic source, click-through rates, and conversion. Keep in touch with the sales department regarding your daily/weekly/monthly sales and how your marketing affects sales.
13 7 CHAPTER 4 KPIS OF AN MARKETING FUNNEL Picture marketing as a journey composed of several stages. Your goals include helping prospects become subscribers, helping subscribers become satisfied customers, and turning customers into brand advocates. Keep your business goals in mind and use our marketing funnel template to design the customer journey in your organization. Think of KPIs that could help you monitor the success at each stage of the funnel.
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15 9 CHAPTER 5 DO IT YOUR WAY When you know what you want your marketing to achieve, it should be easier to choose the right metrics to follow. Select your strategic KPIs and get smarter about your marketing. Here are a few metrics you might find useful. Incremental sales This metric shows new revenue that could be directly attributed to your marketing campaign. This KPI explains why marketing and sales should work together.
16 10 Customer lifetime value (CLV) This KPI can help you go beyond a single purchase and will get you to start thinking about building longterm relationships with customers. Check your CLV to find out whether it s time to initiate a customer loyalty program. Engagement Measure how well your s generate the desired response. Check click-through rates and website statistics to measure the number of subscribers that respond to your CTAs. Analyze the number of shares to see whether your audience finds your content valuable.
17 11 CHAPTER 6 LOOK AT FACTS There are certain metrics that marketers tend to neglect. Most marketers focus on growth and want to see positive results from their efforts. So they sometimes ignore valuable information, such as: Unsubscribe rate Unsubscribes can tell you a lot about the quality of your marketing communication. Find out why subscribers leave, then use the feedback to tailor your campaigns for your target audience. Spam complaint rate If subscribers mark your messages as spam, it might indicate that you should work on your subject lines or send your messages less often. Choose great content and optimize the frequency of your campaigns. Churn rate Churn rate is a percentage showing how many subscribers leave your list in a given period. List churn is typically 25-30% per year. Your list is your most valuable marketing asset, so try new ways of engaging your subscribers.
18 12 CHAPTER 7 DON T ALLOW DATA SILOS After developing a list of KPIs to monitor, make sure you have access to all the crucial information. In order to develop an marketing strategy based on company goals, you need a smooth flow of information between all departments. Most business goals are met as a result of collaboration, so it may not be possible to attribute results to individual actions. Encourage teamwork and drive collaboration across departments. Identify key stakeholders throughout your company and lay down your data requirements. You will probably need access to detailed sales data to evaluate the impact of your marketing campaigns on the business goals. Organize all your marketing channels into a coherent system connect the different tools and gather data that will allow you to make informed decisions.
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