Key Performance Indicators (KPI’s) are one of the most important elements of an effective marketing strategy, yet so few people understand what can be considered a good one, or what a KPI even is. Here, you’ll learn:
-
What a KPI is and how they should relate to your marketing strategy
-
Where and how they can be applied to campaigns and overall marketing efforts
-
How to align your KPIs with your marketing goals to gain better, more measurable results
-
A list of KPIs you should be tracking
What is a KPI?
A quick Google search will provide you with many similar definitions, but very few solid examples of actual KPIs that you could use for your own marketing efforts. For this article we’ll borrow this definition from Databox:
A key performance indicator (KPI) is a metric that’s used to quantify progress towards important business objectives.
— Kevin Kononenko, Databox
KPIs are like checkpoints—your team is travelling toward a specific goal, but in order to get to their destination they need to stop for security checks every so often. By tracking KPIs on a monthly, weekly, or even daily basis, your team is ensuring that they’re still on track to reach their destination.
But how should you determine which marketing KPIs you should be tracking? A good test is to ask yourself: “Can I improve this number and still not meet my objective?” If the answer is yes, then the metric is probably better suited as a leading indicator than a KPI.
While your key performance indicators should make it crystal clear that you’re making progress towards your ultimate goal, a leading indicator helps you diagnose the smaller steps along the way.
Need inspiration? Below, you’ll find a massive list of the most common marketing KPIs you should consider, broken down by the most common marketing objectives.
But before you can choose KPIs to track, you need to fully understand the specific types of marketing metrics and have clear marketing goals established.
Types of Marketing KPIs
Marketing KPIs can be broken down into output and outcome metrics.
Output metrics measure your activities and what you produce, aka your output. An output metric that a marketer might track is the number of social media posts published for a specific period. After you track your output metrics, you’re ready to take a look at the impact of your output. This is where outcome metrics come in to play.
Outcome metrics measure the influence of your output and indicate your performance. If the number of social posts published is your output metric, your subsequent outcome metric may be social media impressions. These metrics tell you whether your current output is sufficient for achieving the outcome you desire. If your social media impressions are down, you know that your output needs to increase.
In the context of KPIs, output and outcome metrics are referred to as leading and lagging indicators of success.
Leading indicators are metrics that lead to results while lagging indicators are the results. Leading indicators are valuable in that they help you to predict future performance. An example of a leading indicator would be website sessions from social. Knowing that your website sessions from social have increased, you can expect to see an increase in signups.
While leading indicators give you valuable insights into future performance, your most important metrics are going to be lagging indicators since they measure actual results. As a marketer, an important lagging indicator may be the number of signups on your website. This metric is directly impacted by the number of website sessions from social, your leading indicator.
Let’s explore the process of setting marketing goals with these metrics in mind.
Using Goals to Select the Right KPIs
You can have the most hard-working and action-oriented marketing team in the world, but if they don’t know what they’re working toward, it’s all in vain.
According to a study by psychologist Gail Matthews, people who write down their goals are 33% more successful in achieving them. Therefore, it’s absolutely crucial that you outline clear marketing goals for the year, month, week, and even day, so your efforts are continuously aligned with your objectives.
All business goals should be SMART goals, meaning they are specific, measurable, attainable, relevant, and time-bound.
Download the S.M.A.R.T. Marketing Goals Template
An easy-to-use, free spreadsheet template with step-by-step instructions.
After you’ve established SMART goals that you would like your marketing team to work toward, you may be unsure which metrics you should be tracking to measure your success. We recommend that you work backward and identify the results you want (your lagging indicators) and consider the necessary actions to achieve these results.
For example, let’s say the goal of your current social campaign is 5,000 email signups per month. Signups per month would be a lagging indicator of success in this scenario. You know that a certain number of web sessions from social per month is going to be necessary to generate 5,000 email signups and you decide that this number is 100,000 sessions.
Now that you’ve identified your outcome metrics, you need to consider how you’re generating 100,000 sessions from social per month. That’s where your output metric comes in. In this case, you know that you need to publish 30 social posts to generate 100,000 sessions. The number of quality social posts published would be both your output metric and your leading indicator of success.
Working backward from your overall goal, you’ve identified that you should be tracking social posts published, website sessions from social, and email signups. Congrats, you’ve got yourself some KPIs to track!
Let’s take a look at the specific KPIs you should be tracking based on your marketing objectives and responsibilities within your team.
The KPIs that you choose to track depend on the goals that you’re responsible for. We’re going to explore the lagging indicators you should be tracking based on your marketing objectives, followed by corresponding leading indicators for each that may have an impact on your KPIs.
Driving Traffic to your Website
1. Website Sessions
This lagging indicator tracks the total number of visits to your site, including new and repeat visits. A session runs from the moment a user visits your website to the moment they exit, unless the session times out automatically due to 30 minutes of inactivity.
This is arguably the most important KPI if you’re a marketer trying to drive traffic to a website, because it is a direct representation of your SEO efforts and tells you exactly how many people have seen your content.
Corresponding leading indicator: # of Blog Posts Published
2. New Users
This KPI is pretty self explanatory: It refers to the number of new visitors to your website, or visitors who are accessing your website for the first time.
This metric tells you how successful you are in driving new traffic to your site. If you have very few new users, this might mean that loyalty from your current customers is very high. On the other hand, if you have more new users than returning users, you may need to adjust the quality of your content to build a loyal following.
Corresponding leading indicator: # of Google Ad Campaigns
3. Organic Clicks
Organic clicks refer to clicks in search results that are not a result of paid campaigns.
This metric tells you a lot about your web traffic and the success (or failure) of your SEO efforts. If clicks are down, you know that your content needs to be better-optimized for search so that searchers are more inclined to click it—maybe you’re ranking for the wrong keyword, or maybe our meta description gives searchers no clues as to what your site is about.
Corresponding leading indicator: New External Followed Links Earned
Increasing Brand Loyalty
1. Repeat Visitors
Repeat visitors are users who have visited your website multiple times.
Returning users typically have higher engagement than new users, as they are more loyal to your brand. These are the visitors who are most likely to work their way down the sales funnel and convert, so it is crucial that you know how many repeat visitors you have and work to improve upon this number.
Corresponding leading indicator: # of Marketing Emails Sent
2. Branded Search Volume
Branded search volume provides insight into how many users are searching for keywords directly tied to your brand.
Tracking this metric allows you to gauge brand awareness. As your brand grows, more users should be searching for it. If they’re not, you know that you need to get more eyes on your content and consider PR strategies.
Corresponding leading indicator: # of Paid Placements
3. Impressions
Impressions refer to the number of times a search result for your site was seen by users.
Brand awareness requires that people are aware of your brand, and this is where impressions help out. Knowing whether or not your content is actually being seen can help you determine if your content and SEO strategies are effective.
Corresponding leading indicator: # of Blog Posts Published
Growing Community Engagement
1. Facebook Group Post Engagement
This metric refers to the number of actions group members are taking on posts within your branded Facebook group.
If members of your Facebook group are frequently interacting with your content, you know that you’re successfully building a community of loyal brand supporters. On the other hand, if you’re not seeing strong engagement, group members may not be getting value out of your posts and you should consider posting more exclusive content that members will be excited about.
Corresponding leading indicator: # of Quality Social Media Posts Published
2. Social Engagements
When people interact with your brand on social media, they are engaging. Engagements on your social media accounts include likes, follows, comments, shares, etc.
Sure, having a massive social media reach is a great feat, but engagements are where the true value lies. Followers who actively engage with your content are much more likely to convert than those who are silent, so this KPI gives you a good idea of how successful your social media strategies are in building a community filled with potential leads.
Corresponding leading indicator: # of Quality Social Media Posts Published
3. User Generated Content:
User Generated Content, or UGC, refers to unpaid branded content posted by fans of your brand. These users often create this content in hopes that you’ll repost it to your social channels or website.
UGC is awesome—it exposes new audiences to your product and you’re getting some amazing content you can repost to your channels. Knowing how much UGC you’re seeing for your brand per period can help you determine how engaged your customers and followers are with your brand, and encouraging them to create UGC will boost engagement.
Corresponding leading indicator: # of Campaigns Encouraging UGC
Generating Qualified Leads for the Sales Team
1. Number of Marketing Qualified Leads (MQL)
Marketing Qualified Leads, or MQL for short, are contacts that are more deeply engaged and therefore more likely to convert than other contacts. These leads may have downloaded an ebook, filled out an online form, or viewed your pricing page.
You need to maintain MQL goals and track your progress in order to guarantee that you have a constant stream of qualified leads ready for the sales team.
Corresponding leading indicator: # of Ebooks Published
2. Number of Leads
A lead is a person or business that has been identified as a potential customer.
Leads turn into customers and customers into revenue, so you need to have a well-defined lead goal and keep track of your progress. Whenever a contact expresses an interest in your product or service, they become a lead. If you’re getting no leads, you know that you need to make major changes in your marketing strategy.
Corresponding leading indicator: # of Events Attended
3. Number of Booked Meetings
Sales meetings, either in person or virtual, give you a chance to sell yourself and your product to sales prospects and bring you one step closer to closing the deal.
Tracking sales meetings booked will help you determine if your leads are truly qualified. You can have thousands of leads, but if you’re not booking any sales meetings this means that your leads are not qualified and your marketing efforts need to be retargeted with a different audience in mind.
Corresponding leading indicator: # of Sales Calls Logged
Improving Lead Qualification
1. Time to Response
This KPI keeps track of the time in days, hours, or minutes it takes for a sales representative to respond to a communication from a lead.
Everyone in business knows that time is money. One small delay in communication can cause your prospects to do business elsewhere. Sales managers should track time to response in order to guarantee efficient communications between their team members and leads.
Corresponding leading indicator: # of Sales Representatives
2. Number of Emails Logged
This metric takes a look at the number of sales emails that were logged within your team’s CRM.
To move leads down the sales funnel, communication needs to be happening throughout each stage. Tracking the number of emails logged by the sales team gives you an idea of how many qualified leads are on their way to becoming customers. If too few emails are being logged, you know that your sales team needs to work on better nurturing their leads.
Corresponding leading indicator: # of Contacts in CRM
3. Deals Created
One of the absolute most important KPIs that marketing and sales should be tracking is the number of deals created.
All of the job functions that your marketing and sales team members perform are completed with one goal in mind: to close deals that generate revenue for the company. Tracking the number of deals created tells you whether deals are going to be closed and if your marketing and sales efforts are successful.
Corresponding leading indicator: # of Emails Logged
Improving Deal Velocity
1. Average Days to Close
This KPI is a measure of average sales cycle length, from opportunity to close.
Closing deals efficiently means that you can close more deals, and double or even triple the revenue that you’re bringing in. You should be tracking this KPI to ensure that your time and resources are being allocated effectively, minimizing the time it takes to move down the sales funnel.
Corresponding leading indicator: # of Workflows in CRM
2. Deal Stage Progression Rate
This is a metric that tells you how quickly you’re traveling from one deal stage to another.
Knowing your Deal Stage Progression Rate, you’ll be able to easily spot any inefficiencies in your pipeline and resolve these issues by creating workflows in your CRM to speed up the sales process.
Corresponding leading indicator: Logged communications per deal per week
3. Number of Calls Logged
This metric tells you how many sales calls were logged within your CRM.
Better communication leads to more efficient pipeline management. So long as you’re not pestering your leads, frequently checking in can speed up the sales process and get you closer to the deal that you want.
Corresponding leading indicator: # of Leads
Closing more Deals
1. Number of Deals Closed
This KPI is pretty self explanatory—it’s simply the number of deals your organization has closed over a given period.
It’s absolutely crucial for your entire team to know how many deals have been closed so far and if the company is on track to meet its goals. This metric allows you to effectively measure the success of each and every marketing campaign for the period and determine what changes need to be made to your current strategy.
Corresponding leading indicator: Sales Outreach Attempts
2. Average Deal Size
Average Deal Size refers to the average value in dollars of your company’s sales deals.
Closing tons and tons of deals is great, but not if they’re all small deals. Your team needs each deal to hit a certain dollar amount in order to reach revenue goals. If your deal size is not up to par, you know that there are inefficiencies somewhere along the sales pipeline.
Corresponding leading indicator: Average Lead Score
3. Pipeline Value
Your sales Pipeline Value is the potential revenue that can be gained by closing the deals currently in your pipeline.
By determining pipeline value, you’re able to predict whether or not sales and revenue goals will be met for the period. If your pipeline value isn’t indicative of your goals being met, you know that your sales and marketing teams need to hustle in the time being.
Corresponding leading indicator: # of Upsell Promos Launched
Retaining Current Customers
1. Retention/Churn Rate
Your retention rate is the percentage of your customers that return to do business with you more than once, while your churn rate is the percentage of customers you’ve lost over a given period. They should add to 100%: if you’re retaining 85% of your customers, that means 15% of them have churned.
Knowing how well you are retaining your customers is vital as it gives you valuable insights into customer satisfaction levels and brand loyalty. You know you have some doubling down to do if you’re not meeting your retention goals, whereas if you are you can devote more time and energy into nurturing new leads.
Corresponding leading indicator: # of Daily Active Users
2. Net Promoter Score
Net Promoter Score is a quantitative measure of customer loyalty determined by their response on a scale of 1-10 to the question “How likely is it that you would recommend our brand to a friend or colleague?”
Your promoters are giving you a score of 9-10, your passives are giving you a 7-8, while your detractors are giving you a measly 0-6. If most of your customers are detractors, you know that your brand loyalty is slim to none and you need to make the appropriate strategy adjustments to change this.
Corresponding leading indicator: Support Ticket Response Time
3. Average LTV
Average LTV, or Lifetime Value, is the revenue a single customer is expected to generate throughout the span of your average customer lifetime. It’s simply the value of a customer to your organization over time.
LTV demonstrates whether or not acquisition costs outweigh the money you’ll bring in after acquisition and if a prospect is truly worth pursuing. This metric also makes it easy to see which of your current customers are the most valuable to your organization.
Corresponding leading indicator: # of Marketing Emails Sent
Select the right KPIs for your Business
These, of course, are just a few examples out of many. Pick the metrics that make the most sense for your organization. Start by developing your SMART Goals, and then choose the metric that will be the best measure of progress towards those specific goals, not just the ones you feel will look best. For those that you do not use, you should consider using these as leading indicators or secondary KPI’s.
What other metrics do you monitor? Think we’ve missed some important ones from our list? Share in the comments below.
