KPI metrics are a crucial part of the data that you need to see how your business is progressing towards your marketing goals. Key Performance Indicators or KPIs are absolutely important for your entire business as they show exactly what impact marketing has on your company or organization.
They are specific metrics that companies and organizations track to evaluate the progress towards their clear marketing goal within their marketing channels. KPIs show how effectively companies and organizations are achieving their business objectives.
Without tracking the necessary KPIs, marketers won’t have a clue about the performance of their campaigns. They won’t know the type of success they are having, and won’t be able to compare it to anything.
Knowing the right KPIs will help them set realistic goals and develop marketing strategies to reach them and measure their progress.
The right KPIs act like a compass, showing whether you and your team are taking the right direction towards achieving your goals.
First, think about your clear objective. What it is that you want to control and measure. Try to be as specific as possible to get better results. Then, share your objective with everyone involved so that your entire team is on the same page.
An objective can change, so make sure you update your team regularly. KPIs are constantly moving and changing, so you need to track them regularly instead of looking at them only once.
Finally, meet with your team every week so that you can discuss the KPIs reports and data you’re measuring and come up with ideas on how to improve them.
Depending on your goals and industry, there are plenty of different KPIs to track. But, focusing on the most important ones can help determine the success of your marketing strategy and make sure it constantly improves.
This KPI shows how effective your marketing and advertising strategy is. It measures the percentage of people that complete your goal, such as signing up for a newsletter or adding an item to a cart.
You can measure landing pages, ads, contact forms, social media follows, downloadable resources, etc. Tracking your conversion rate keeps you informed.
For example, it allows you to a/b test before launching a new contact form. This test will help you collect actual data about the performance of the new contact form design that delivers better or worse conversion rate.
This KPI shows how much organic traffic comes to your website. This is a really important source of traffic as it’s free, unlike the traffic you get from paid ads. Organic traffic provides details about your SEO strategy as well. It allows you to evaluate your website ranking in search results.
You can also use these numbers to find out if your website attracts valuable organic traffic.
This KPI shows how much you have to pay to get a new lead. This is extremely beneficial for contractors, landscapers, HVAC service providers, and other businesses that revolve around lead generation.
To calculate this KPI, divide the spend by the number of leads. Some of the expenses that can be part of your spending include freelancers, ad spend, software, etc.
This important KPI evaluates the financial performance of your advertising and marketing efforts. It’s best to calculate your ROI by channel and your overall ROI.
For instance, you can calculate the return on investment of your social media advertising strategy and that of your social media marketing before you can calculate the overall ROI from the two strategies.
Lifetime value estimates the long-term value of your average customer. Knowing this information can help you make a better marketing budget and come up with a reasonable cost per lead.
High LTV allows you to pay a higher cost per lead, but a low LTV can make you decrease the same cost.
Even though all KPIs can be metrics, not all metrics can be KPIs.
Key performance indicators are measurable values that reveal how effectively you achieve your business objectives. On the other hand, metrics track the status of a certain business process. In other words, KPIs or key performance indicators track if you achieve your business targets/objectives, while metrics track processes.
While metrics are just numbers and support KPIs, KPIs are strategic and support the overall business objectives and strategic goals, and make you think what is it that you are trying to accomplish.
Measure, however, is a term often used hand-in-hand with dimensions. It is a value or number that can be summed and averaged, like leads, sales, durations, weight, distances, and temperatures.
A measure is unit-specific, unlike a metric and KPI which can be made of multiple measures. While a measure is a value and number, KPI is context-driven. KPIs and metrics are both derived from measures.