Marketing KPIs were some of the first KPIs companies started using for data-driven decision-making. This was because measuring marketing performance and effectiveness became more crucial with the growth of digital marketing and data-driven marketing approaches. For example, website statistics or social media impressions could measure a company’s online presence and how well it performed, improve campaigns and generate extra revenue.
What are Marketing KPIs?
Marketing KPIs are specific, measurable goals that a company sets to track the success of its marketing campaigns. They can be anything from website visits to social media engagements. By tracking these metrics, companies can see whether their marketing efforts are working and make changes as needed.
One of the most common Marketing KPIs is website traffic. This can be measured in several ways: unique visitors, pageviews, or average on-site time and others. Companies also track social media engagement, landing page conversions, and costs for leads or analyze the lifetime value of customers.
Choosing the suitable KPIs to track depends on the company’s business goals and what type of marketing it does. Measuring how many people are reached by a campaign and how well it resonates with them is the basis, but also, the leads acquired, and the value created by marketing is worth measuring. Marketing KPIs should constantly be evolving as a company’s marketing strategies change.
Why is it essential to track Marketing KPIs?
Marketing KPIs are essential to track because they help businesses measure the success of their marketing campaigns and strategies. By monitoring these metrics, companies can identify which marketing initiatives are working and which need improvement, where money is lost, where customers are acquired, and how well marketing supports the organization’s objectives. Additionally, measuring marketing KPIs can help companies to optimize their campaigns to achieve better results.
Overview of the most critical Marketing KPIs
- Total Revenue
- Revenue by Product or Service
- New Customers
- Cost per Acquisition (CPA)
- Cost per Lead
- Sales Target & Growth
- Average Order Value
- Upsell & Cross-Sell Rates
- Customer Lifetime Value (CLTV)
- Organic Traffic
- Bounce Rate
- Engagement Rate
- Click-Through-Rate (CTR)
- Goal Conversion Rates
- Website-Traffic-to-Lead Ratio
- Marketing Qualified Leads (MQLs)
- Sales Qualified Leads (SQLs)
- Lead-to-MQL Ratio
- MQL-to-SQL Ratio
- Average Time to Conversion
- Landing Page Conversion Rates
- Cost-per-Click (CPC)
- Return on Investment (ROI)
- Return on Ad Spend (ROAS)
- Net Promoter Score (NPS)
Explanation of 24 important Marketing KPIs
One essential KPI is total revenue, which measures the gross income generated by your marketing efforts. This metric can be tracked monthly, quarterly, or even in Real-Time, and it’s important to compare the company’s total revenue to other KPIs such as leads generated, conversion rate, and cost per lead. By tracking total revenue, you can clearly see how your marketing efforts are impacting the bottom line.
Revenue by Product or Service
As a marketing KPI, the revenue by product or service breakdown is a great way to track your company’s progress. This metric tells you how much revenue each product or service generates, and can help you identify areas where your marketing efforts need to be focused. For example, if you see that one product is generating significantly more revenue than others, you can target your marketing efforts towards that product in order to boost sales. Similarly, if you see that one service is lagging behind the others in terms of revenue, you can adjust your marketing strategy accordingly.
New Customers / New Leads
New customers, or at least leads, are always a welcome sight for businesses. For these reasons, new customers are often used as a key performance indicator (KPI) for marketing efforts. There are several ways to measure the number of new customers, such as tracking first-time purchases or taking surveys. Regardless of the method, new customers can give valuable insights into the effectiveness of marketing campaigns. In combination with other KPIs, this number can be the primary way of measuring the effectiveness and costs of customer acquisition.
Cost per Acquisition (CPA)
Cost per Acquisition (CPA) is a key performance indicator (KPI) that measures the financial performance of a company’s marketing efforts. CPA is calculated by dividing the total cost of acquisition (CAC) by the number of customers acquired. For example, if a company spends $1,000 on marketing and acquires 10 new customers, its CPA would be $100. CPA is an important metric for companies to track because it allows them to assess whether their marketing efforts are efficient and effective. Additionally, CPA can be used to benchmark performance against competitors. If a company’s CPA is higher than its competitors, this may indicate that the company is not as effective at marketing or that its products are less appealing to customers. Companies should strive to keep their CPA low to achieve maximum financial efficiency. This KPI should be used in connection with Cost per Lead (CPL) to see the conversion from lead-to-customer.
Cost per Lead (CPL)
A Cost per Lead or CPL is a marketing KPI that measures the average cost of acquiring a new lead. To calculate your CPL, divide your total marketing spend by the number of new leads. For example, if you spend $100 on marketing and develop 10 new leads, your CPL would be $10. While your CPL will vary depending on your industry and target audience, tracking this metric over time is critical to ensure that your marketing efforts are efficient and effective. By closely monitoring your CPL, you can make necessary adjustments to your marketing strategy to improve results and ROI.
Sales Target & Growth
A sales target is a number that represents the required amount of sales for a business to generate within a specified period. This number can be based on many factors, including past sales data, market trends, and economic forecasts. On the other hand, growth is the percentage increase in sales that a business experiences over time. Sales targets and growth are two crucial marketing KPIs that can provide insights into the health of a business. By tracking these numbers regularly, companies can identify trends and make necessary adjustments to their marketing and sales strategies.
Average Order Value
Average order value is a metric that measures the average amount of money that a customer spends per order. Businesses often use this metric as a key performance indicator (KPI) to assess the feasibility of their marketing and sales efforts. A high average order value indicates that customers spend more money per purchase, which can result from effective marketing campaigns and/or strong product offerings. On the other hand, a low average order value may indicate that customers are not engaged with the company’s marketing messages or that they are not finding products that meet their needs. A major problem arises when the customer acquisition costs (CAC) are higher than the average order value or the margin of this value.
Upsell & Cross-Sell Rates
Upselling and cross-selling are essential marketing activities that can help boost revenue and grow your customer base. Upselling persuades customers to buy a more expensive product or upgrade to a higher-end service. On the other hand, cross-selling is the practice of selling complementary products to existing customers. Both upselling and cross-selling can be effective ways to increase sales and grow your business. However, it’s important to track your success rates to gauge your marketing efforts’ effectiveness.
Customer Lifetime Value (CLTV)
Customer Lifetime Value (CLTV) is a critical KPI to measure a customer’s actual value and represents a customer’s total value to a business throughout their relationship. CLTV considers customer acquisition costs, retention rates, and average purchase value. By tracking CLTV, companies can assess the profitability of their marketing campaigns and how much real value is generated, as a first sale might not cover high CAC. While CLTV can be a complex metric to calculate, it provides valuable insights into the effectiveness of marketing strategies and can be a powerful tool for driving business growth.
As a marketing KPI, organic traffic measures the number of visitors to your website who arrive there through a search engine, such as Google, without clicking on an advertisement. Because these visitors are already interested in what you offer, they are more likely to convert into customers or leads than those who come to your site through other channels. Organic traffic is, therefore a critical metric to track when assessing the success of your digital marketing efforts. While it can be challenging to increase organic traffic, you can use several tactics to make your site more visible in search engine results pages, such as optimizing your content for relevant keywords and building links from high-quality websites or creating content. By investing in organic traffic, you can improve the ROI of your marketing campaigns and drive long-term growth for your business.
What is a good bounce rate? It depends on your marketing goals. A low bounce rate is ideal if you want people to stay on your website and explore. However, a high bounce rate may be a good thing if you’re running a campaign solely to get people to click through to a specific landing page. Either way, your bounce rate is an important marketing KPI on which you should keep an eye. By understanding what factors influence your bounce rate, you can make changes to improve your website and reach your marketing goals.
Engagement rate is a marketing KPI measuring user interactions and content. This engagement can include likes, comments, shares, and other forms of interaction. The engagement rate is essential because it shows how well your content is performing in terms of stimulating interest and provoking reactions from your audience. A high engagement rate indicates that your content is resonating with your audience. In contrast, a low engagement rate may indicate that your content is irrelevant to your target audience.
As a marketing metric, click-through rate (CTR) is the percentage of people who click on a particular link or ad from the total number of people who view it. CTR is a valuable metric because it helps to gauge the effectiveness of an advertising campaign and whether or not people are interested in what is being offered. A high CTR indicates that people are responding positively to the ad, while a low CTR suggests that the ad is not resonating with the audience. By focusing on CTR, advertisers can ensure that their campaigns are as effective as possible.
Goal Conversion Rates
Goal conversion rates help businesses track and measure their marketing campaigns’ success in achieving specific objectives. By tracking goal conversion rates, companies can identify which marketing activities are effective in driving conversions and which ones are not. A goal can be a specific action that you want people to take on your website, such as subscribing to a newsletter or making a purchase. By tracking goal conversion rates, you can optimize your marketing campaigns for better results.
The website traffic-to-lead ratio is a marketing KPI that measures the number of leads generated from your website traffic. This metric helps you understand how effective your website generates leads and can be used to improve your lead-generation efforts. A high ratio indicates that your website is doing a good job generating leads, while a low ratio suggests that your website is ineffective at generating leads.
Marketing Qualified Leads (MQLs)
MQLs are leads identified as having a higher likelihood of becoming customers. MQLs are typically generated from marketing campaigns and are a valuable metric for measuring the effectiveness of marketing efforts. By tracking MQLs, companies can assess which marketing activities are most effective at generating leads that convert into customers.
Sales Qualified Leads (SQLs)
SQLs are leads identified as having a high likelihood of becoming customers. SQLs are typically generated from sales activities and are a valuable metric for measuring the effectiveness of sales efforts. By tracking SQLs, companies can assess which sales activities are most effective at generating leads that convert into customers.
The lead-to-MQL ratio is a metric that measures the number of leads that become marketing-qualified leads. This ratio helps you understand how effective your lead-generation efforts are in generating MQLs. A high ratio indicates that your lead generation efforts are practical, while a low ratio suggests that your lead generation efforts are ineffective.
The MQL-to-SQL ratio is a metric that measures the number of marketing-qualified leads that become sales-qualified leads. This ratio helps you understand how effectively your marketing efforts generate SQLs. A high ratio indicates is good, while a low ration suggests problems in the process.
Average Time to Conversion
As a marketing metric, Average Time to Conversion can be a valuable indicator of your campaigns’ effectiveness at driving leads through the sales funnel. You can identify bottlenecks in your funnel and adjust your marketing strategy accordingly by tracking the average amount of time it takes for a lead to convert into a paying customer. Average Time to Conversion can also help you set realistic expectations for your sales team by providing them with a benchmark against which to measure their performance.
Landing Page Conversion Rates
Landing page conversion rates measure the percentage of visitors to your landing page who take the desired action. This metric helps you understand how effectively your landing page converts visitors into leads or customers. A high conversion rate indicates that your landing page is effective, while a low conversion rate suggests that your landing page needs improvement.
Cost-per-click is a metric that measures how much it costs to generate a lead through paid advertising. This metric can be used to assess the effectiveness of your paid marketing campaigns and to optimize your campaigns for better results. A lower CPC indicates that your campaigns are more effective and efficient, while a higher CPC suggests that your campaigns are less performant
Return on Investment (ROI)
Return on Investment, or ROI, is a key performance indicator for any marketing campaign. It measures the profitability of a marketing campaign by comparing the revenue generated to the cost of the campaign. For example, if a company spends $100,000 on a marketing campaign and it generates $1 million in sales, the ROI would be 10%. ROI is an essential metric for assessing the success of a marketing campaign and determining whether or not to continue investing in it. If a company is not seeing a positive return on its marketing investment, it may need to reevaluate its strategy. ROI can also be used to compare different marketing campaigns’ performance and determine which is more effective.
Return on Ad Spend (ROAS)
One of the essential metrics for advertising is the return on ad spend (ROAS). Simply put, ROAS measures how much revenue is generated for every ad dollar spent. For example, if an advertiser spends $100 on ads and generates $500 in sales, their ROAS would be 5x. While there is no perfect ROAS for every campaign, a good general rule of thumb is that a campaign should generate at least 2x its ad spend. Anything less than that is considered to be a loss. Several factors can affect ROAS, including ad creative, target audience, and pricing. Market tracking ROAS allows marketers to optimize their campaigns for maximum efficiency and profitability.
Net Promoter Score (NPS)
Net Promoter Score is a metric that measures customer satisfaction and loyalty. It’s a simple way to track how likely your customers are to recommend your product or service to others. The score is calculated by asking customers how likely they are to recommend your brand on a scale of 0-10. Promoters are customers who score 9-10, Passives are those who score 7-8, and Detractors are customers who score 0-6. To get the NPS score, you subtract the percentage of Detractors from the percentage of Promoters. For example, if 30% of respondents are Promoters and 10% are Detractors, then the NPS score would be 20 (30% – 10%). The NPS can be a valuable tool for measuring customer satisfaction and loyalty over time.