KPIs can be overwhelming, but there are a few that you might want to pay extra attention to if you’re starting from scratch.
If you’re on this blog, chances are you have influence over, or at least an interest in your company’s marketing success. If so, you’ll surely have wondered… How is my marketing performing? What can I do to improve my marketing game? Well, this is where KPIs come in.
KPIs, or Key Performance Indicators, are the most important metrics that a business can track to measure marketing success. But they can be a little daunting.
There are hundreds of KPIs that you can track. And of course, no two businesses are exactly alike, so the KPIs you choose to pay attention to will vary from company-to-company. But at least from our experience, there are a handful of metrics that you might want to pay extra attention to if you’re looking to start tracking your marketing performance.
Maybe you’ve not been putting any money into your marketing campaigns at the moment, and that’s perfectly fine. ‘Organic’ traffic, refers to people who find your website, page, or store by themselves, without being influenced by ads.
This is a super important metric to track. In fact, the goal of a lot of digital marketers is to acquire the majority of their web traffic from organic search, instead of from digital ads.
However, keep in mind that your organic traffic may not be truly organic. This is because offline ads such as print, billboards and other out of home advertisements can bring seemingly organic traffic to your site.
Your SEO (Search engine optimisation)/SERP (Search Engine Results Page) ranking is your golden ticket to organic traffic. Essentially, your SEO ranking relates to how far down the page your site is when people search for a specific term.
For example, if you are a coffee shop in the centre of London, you’ll want to rank for “coffee in London”. If your website shows up as number 1 in this list (first of all, well done! You probably don’t even need to be reading this!), your SEO/SERP ranking for “coffee in London” would be 1. On the other hand, If you’re all the way on the second page, your ranking might be around 12.
Just remember, the lower your ranking, the higher your organic traffic will be!
Customer Acquisition Cost
If you are running paid marketing campaigns, this one is essential! Customer Acquisition Cost (CAC) is exactly what it sounds like, essentially this measures the cost to acquire one customer.
Measuring your CAC (yes, we know how that sounds) is pretty easy! All you need to do is divide the costs spent throughout a campaign/period of time, by the number of customers acquired over that same timespan.
Let’s say you spent £500 on an ad campaign, and this campaign resulted in 50 customers, your CAC is £10. Whether this is good or bad depends entirely on the product/service you sell. However, a general rule is the lower your CAC is, the better!
Customer Lifetime value
Another area to keep in mind when assessing your CAC is the lifetime value (LTV) of your customers. This KPI looks at how much money a customer will spend on your product/service throughout their lifetime as a customer.
Depending on your business, this metric may or may not be of use to you. If you sell a one-off product that does not necessarily need replacing or part-replacing, this metric may not provide much value. But if your product or service is retainer/subscription-based, or if your product is quickly consumable. This can help you to see the true value of your customer.
As mentioned, this is a particularly useful metric to compare with your CAC. As if you have a high LTV, a somewhat high CAC can be acceptable. However, if your CAC is higher than your LTV, you should probably reconsider how much money you are spending on acquiring your customers.
They say that money makes the world go round, and money made from a campaign is usually one of the first things that your manager will ask you about. This is where Return on Investment (ROI) comes in!
To calculate your ROI, simply subtract the money spent on the campaign from the money made as a result of the campaign. While this may seem easy at first, it can sometimes be difficult to attribute sales to specific marketing campaigns. If this is the case, this formula may help you to see a clearer picture.
Still unsure about your marketing KPIs?
We’ve helped a number of our clients come to terms with their KPIs, through detailed reports and tailored marketing advice.
Get in touch with us today for an informal chat about how we could help your marketing efforts.