Do you know what your digital marketing is worth?
Imagine the following scenario. You’ve invested in creating a digital marketing strategy that appeals to your target audience. Your team has been executing different efforts, like SEO, PPC, social media, and email marketing. But how do you know if your efforts are driving the results expected?
The answer lies in KPIs.
In this article, we’ll explore how to choose the ideal KPIs for your company so you can plan your marketing strategy wisely.
If you have marketing experience or are new to it, continue reading.
What is a Key Performance Indicator (KPI)?
KPIs, or key performance indicators, are the metrics you use to measure the success of your marketing efforts. They tell you what’s working and what’s not so you can make the necessary adjustments to your strategy to drive results.
However, not all KPIs are the same.
The right KPIs for your business will depend on your specific goals. For example, the KPIs for tracking website traffic will differ from the ones used to track sales or leads.
Understanding the Importance of KPIs
Choosing the right KPIs is crucial for several reasons.
- They help you measure progress over time. Tracking your KPIs over time allows you to see how your marketing efforts are performing compared to the past.
- They allow you to identify what’s working and what’s not. KPIs can help determine which marketing channels drive the most traffic, leads, and sales. This information helps you allocate your marketing budget more effectively. For example, suppose your website’s organic traffic is declining. With KPIs, you can investigate the reasons and change your SEO strategy.
- They help you stay aligned with your business goals. KPIs ensure that your marketing efforts align with your business goals. They help you achieve your marketing objectives and grow your business. For example, suppose your business goal is to increase brand awareness. In that case, you can track KPIs such as social media engagement, website traffic from organic search, and brand mentions in the media.
- They help you make better decisions. Tracking your KPIs allow you to make better decisions about your marketing strategy. Interpreting the data gives you insights into why your strategy is not working. By identifying the root cause, you can address those weaknesses to increase the performance of your campaigns.
Types of Key Performance Indicators (KPIs)
There are various types of KPIs for different aspects of business performance. Understanding them will help you choose the ones that align with your business goals and allow you to make informed choices.
Quantitative
Quantitative KPIs are numeric measurements often used to measure the success of marketing campaigns, sales initiatives, and other business activities. They can also track the overall performance of your business over time. Some examples of these KPIs include:
- Revenue
- Sales growth
- Customer satisfaction scores
- Organic Traffic
- Customer Lifetime Value
- Conversion Rate
- Return on Investment (ROI)
- Authority Score
Qualitative
Qualitative KPIs, on the other hand, focus on non-numerical data. They can be more challenging to measure than quantitative KPIs. Still, they provide valuable insights into the customer experience and your business’s overall health. Examples are:
- Customer feedback
- Employee engagement
- Brand reputation
The specific KPIs that you track will depend on your business goals and objectives. Understanding KPI categories will allow you to select the ones that are most crucial to your company’s success and monitor your development over time.
How do I Determine which KPIs to Use?
Start by defining your marketing goals: Clearly define your business objectives and identify the specific outcomes you want to achieve. Ensure that each KPI directly aligns with one or more of your business goals. This alignment ensures that your KPIs reflect the most critical aspects of your business’s success.
Consider your target audience: a good KPI should positively impact your audience’s experience with your product or service. Ask yourself the following questions. Who are you trying to reach with your marketing efforts? What are their needs and wants? Once you understand your target audience, choose KPIs that are relevant to them.
Consider your industry: not all KPIs are relevant for all types of industries. To determine which ones are relevant to your industry, ask yourself the following. What are the KPIs commonly used in your industry? What are the benchmarks that you should be aiming for? By understanding the norms in your industry, you can choose realistic and achievable KPIs.
Involve stakeholders: Engage key stakeholders in the KPI selection process, such as department heads or team leaders. Their insights and perspectives can provide valuable input and ensure organizational buy-in.
Choose SMART KPIs. KPIs should be specific, measurable, attainable, realistic, and time-bounded. They should be:
- Specific: They should be clearly defined and measurable. For example, instead of saying, “Increase website traffic,” you could say, “Increase website traffic by 10% in the next quarter.”
- Measurable: There should be a way to track your progress toward your KPIs. For example, you could use Google Analytics to track your website traffic or a survey tool to track brand awareness. Additionally, they should be able to be measured in numbers. For example, instead of saying, “Increase brand awareness,” you could say, “Increase brand awareness by 10% in the next quarter, as measured by a survey of 1,000 potential customers.”
- Attainable: They should be challenging but possible to achieve.
- Realistic: They should be achievable with the resources and budget that you have available.
- Time-bound: KPIs should have a specific deadline. For example, you could say, “Increase website traffic by 10% in the next quarter.”
Track and measure your KPIs over time. Depending on your marketing goals, determine a specific time frame when you’ll review your metrics. For example, you may meet weekly or monthly with your team to go through your list of KPIs and identify your performance during these periods. It will help you see how your marketing efforts are performing and make necessary adjustments.
How to Choose Marketing KPIs?
Choosing effective digital marketing KPIs is essential for tracking the success of your campaigns and making informed decisions about your strategy. One crucial factor to consider is the buyer’s journey.
The buyer’s journey is the process a potential customer goes through as they learn about your product or service, consider it a solution to their problem, and eventually make a purchase. The buyer’s journey has three main stages: awareness, consideration, and decision. The metrics you track should differ for each buyer’s journey stage. We’ll cover some common ones you can start monitoring for your marketing strategy in each buyer’s journey stage.
Awareness
Website Traffic
This metric measures the number of visitors to your website. It’s a good indicator of how well your marketing campaigns drive brand and product awareness. High website traffic indicates that your website is visible to many users. In contrast, low traffic means you should start implementing strategies such as SEO or PPC to attract more visitors.
Social Media Engagement
This metric measures the level of engagement with your brand on social media. It’s a good indicator of how interested people are in your content and how likely they are to convert into customers. A high engagement indicates to algorithms that your business is relevant and increases the chances of showing up to new customers.
Brand Awareness
Brand awareness measures how well-known your brand is among your target audience. It’s a good indicator of how effective your marketing campaigns are at building awareness of your brand. The stronger your brand awareness is, the more qualified leads and customers you will be able to attract.
Search Engine Rankings
This key performance indicator measures how high your website ranks in search engine results pages (SERPs) for specific keywords. It’s a good indicator of how visible your website is to potential customers searching for products or services like yours. The higher your rankings are, the higher the chances of getting more visitors, traffic, and leads for your website.
Impressions
Impressions measure the number of times people see your content. It’s a good indicator of how much reach your content has.
Reach
Reach refers to the number of people exposed to your content. It’s a good indicator of how many people your content is reaching. The higher your reach, the higher the chances of attracting your target audience.
Consideration
Lead generation
This metric measures the number of people who have expressed interest in your product or service by providing their contact information. It’s a good indicator of how well your marketing campaigns drive visitors to your website and convert them into potential customers.
Email Open Rates
This metric measures the percentage of people who open your emails. They indicate how interested people are in your content and how likely they are to click on your links. Campaigns with high open rates have more chances of generating customers and sales. Differently, a low rate indicates that your emails need optimization to drive results.
Click-Through Rate (CTR)
CTR is the percentage of people who click on a link in your email or website. It represents how effective your calls to action are. High click-through rates represent more interested users in your content, product, and services.
Engagement Rate
Engagement measures the level of engagement with your content. It can be measured by the number of comments, shares, and likes your content receives.
Decision
Website Conversions
This is the percentage of website visitors who take a desired action, such as signing up for your email list or purchasing. A high website conversion rate indicates that your site is relevant, engaging, with quality content that helps generate sales.
Sales
The number of sales deals you manage to close. Ideally, this metric should be higher than your customer acquisition cost. A high sales number represents that your investment generates more revenue than it costs to attract those customers.
Customer Lifetime Value (CLV)
CLV represents the average amount of money a customer spends with your business over their lifetime. You should target customers with high CLV as they will bring more in the long term for your company. These are usually clients with recurring purchasing behaviors or bound by a contract.
Customer Satisfaction
Satisfied customers will often leave positive reviews about their experience with your company. Customers are more likely to stay with your business if you have a high customer satisfaction rating.
Net Promoter Score (NPS)
NPS measures how likely your customers are to recommend your product or service to others. Just as the customer satisfaction metric, it indicates how delighted customers are with your services and whether they will recommend your services to others.
Churn Rate
The churn rate measures the percentage of customers who stop doing business with you over a period of time. This metric will help you identify common patterns on why customers are abandoning your company and provide solutions to address this issue.
How many KPIs Should You Have?
Many businesses believe that the more KPIs they track, the less space for mistakes. The truth is the opposite. Too many KPIs can be overwhelming and difficult to monitor, so focusing on the most important metrics is essential.
According to Mind Tools, the optimum number of KPIs for most business areas is between 4 and 10. Try to think of what are the most impactful metrics according to your current business or marketing goals. For example, suppose your objective is increasing brand awareness. You can choose metrics like organic traffic, search engine rankings, social media engagement, and time spent on your website.
Conclusion
You can improve your decision-making regarding your marketing strategy and ensure it aligns with your business objectives by selecting the appropriate KPIs and monitoring your progress over time.
So what are you waiting for? Start tracking your KPIs today!
At RealTop, we have over 15 years of experience helping business owners thrive online through targeted digital marketing strategies.
We’ll collaborate with you to understand your business objectives and create a KPI-driven marketing strategy to help achieve those objectives. To make sure your marketing initiatives are always on track, we’ll also monitor your progress over time and make optimizations.
Contact us today to schedule a free marketing plan.
Nik Tsoukales, founder of REALTOP, is an experienced digital marketer with a track record of growing businesses and sales teams. He has received multiple awards for leading fast-growing companies and specializes in organic SEO, Google PPC, and Social Media. With over 89k clients acquired online, Nik’s expertise spans various industries including finance, healthcare, and real estate.
