Stop! don’t waste time tracking meaningless KPI’s. Here’s the top marketing KPI’s worth tracking

For many business owners, marketing is one of those things they’re reluctant to spend money on. Sure, if your marketing efforts are not coming up with the goods, then you’re just throwing money down the drain. But if you develop a great marketing strategy, aligned to your business objectives and your target customer, you can’t go wrong!

The second thing with marketing is that you need to track the results. It’s no good putting a plan in place and not checking how it’s going or if it’s taking you to your final destination. So what do you need to do to make sure your marketing is working for you? You need to set some marketing KPI’s (key performance indicators).

Marketing KPI’s allow you to measure the progress of your strategic marketing objectives. It’s important to focus in on the right metrics and choose KPI’s most suitable for your business – this is essential for the success of your marketing strategy.

So where to start? The number one rule here is to set metrics against your business objectives. So if one of your objectives is to increase sales of x product by 10% over the next 6 months, then the marketing strategy needs to address this, and the metrics need to report on this.

Here are a list of the top 7 marketing KPI’s actually worth tracking:

1. Sales metrics

2. Customer acquisition

3. Leads – quantity and quality

4. Customer Lifetime Value (CLV)

5. Share of Voice (SOV)

6. Brand awareness metrics

7. Net Promoter Score (NPS)

If you’re a small business owner, you might be reading this list thinking “huh! What do these words mean!?” Don’t worry, I’m about to explain these as simply as possible. Stick with me 😊

Sales metrics

Sales metrics are one of the most straightforward ways to get a gauge on the health of your business, because they directly reflect the growth of your business. The key here is to select the RIGHT financial metrics, and these will depend on your business model and planning.

For most businesses, profit will likely be the top sales metric to track. This means taking both revenue and costs into account so you can properly calculate profit. Sales metrics are also easy to measure because you know their exact value.

Customer acquisition

You can measure customer acquisition through your CRM tools, which means you first need to have these set up. You might also measure through integrated marketing platforms, like mailchimp or HubSpot, where you track sign ups.

Remember that customer acquisition doesn’t always have to be monetary customers (ie people who spend money to buy your products and services) – it can also be people who sign up to your newsletters or mailing lists – this is still regarded as a transaction because they’ve provided you with something (their email address) in return for being on your mailing list. If growing your database is an important objective, then make this part of your customer acquisition metrics.

Leads – Quantity and Quality

Using leads as a metric is a great way to gauge how effective your marketing is at attracting potential customers who are likely to do business with you. In this case however, it’s not just the quantity, but also the quality.

Quantity is a fairly straightforward metric to find – this should be in your CRM or integrated marketing platform. Quality on the other hand is a little trickier and come sometimes be more anecdotal. In order to determine the quality of a lead, you could set up a scoring system, whereby you assess:

• The estimated purchasing power of a customer or business – ie. can they realistically afford your products/services and at what quantity?
• User behaviour and actions, particularly on your website – ie. are you able to determine which pages they visited and what inspired them to sign up?
• Key questions or comments made by the potential customer (ie the lead)
• Any other significant data you collected about the user through the registration process which may make them a ‘hot’ lead.

Customer Lifetime Value (CLV)

Here’s a term which you may not have come across before. Customer lifetime value estimates how much money a customer is likely to spend on your products and services over time. If you’re able to increase your average customer’s worth, this will help to improve financial metrics and allow you to invest more on customer acquisition.

To calculate CLV, you can use a simple formula:

• Average Order Value (AOV) x Annual Purchase Frequency x Average Customer Lifespan
• So, if your AOV is $500, and a customer buys the product 5 times a year and continue to buy from you for 3 years, the CLV would be 500 x 5 x 3 = $7,500.00.

If you’ve only just started out in business, calculating your CLV will be tricky; you need to have a few years of sales history under your belt first to make a realistic calculation. If you already have access to your CLV, you might like to look at which of the three metrics (AOV, APF or ACL) need improving the most.

Share of Voice

Share of Voice refers to how visible your brand is in the market. It was traditionally a metric only used in advertising, but the rise of social media means we’re all fighting for a piece of our customers’ minds. Share of Voice is a great marketing metric because there is a correlation between SOV and Market Share.

How to measure share of voice? It can be tricky to get one combined number for SOV, so choose a metric for each channel.

• If you’re measuring Organic search, look at how visible you are in SERP’s (Search Engine Results Page). Ahrefs is a great tool to help you with this.
• If you’re measuring Paid Search, look at your share of impressions
• If you’re measuring organic social media, look at your brand mentions as a comparison to your competitors
• If you’re measuring TV ads, look at Gross Rating Points (GRP)

If you’d like to read more on measuring SOV, Ahrefs has some great information here.

Brand Awareness Metrics

Brand awareness refers to how familiar your customers are with your brand. When you think of vacuum cleaners, you might instantly think Hoover or Dyson – this is because these brands have a higher level of brand awareness amongst consumers.

If you’re wanting to measure your brand awareness, you might like to seek the services of a market research company.

Net Promoter Score

In one of my previous blog posts (here), we touched on the marketing cycle of awareness, consideration, conversion and loyalty. Measuring your net promote score relates to the last of this marketing cycle – loyalty and advocacy and how likely a customer is to recommend your product or service to others.

You’ve probably come across a survey in the past where you’re asked “how likely are you to recommend xxx business name to a friend?” and you’re given a range of numbers to select from – the lowest being highly unlikely and the highest being highly likely.

The NPS score is then calculated by subtracting the percentage of detractors from the percentage of promoters, and can range from minus 100 to 100. Anything above 0 means you have more promoters than detractors.

If you’re going to use NPS as a metric, keep in mind the motivating factors of why someone may have chosen to take part in the survey. Remember too that people are more likely to share the fact that they’ve had a bad experience than a good experience. (Marketing Charts)

Key take-aways

The key take away here is to make sure you’re setting meaningful metrics; don’t set metrics just for the sake of it. Make sure your metrics are aligned to your business objectives and your marketing efforts.

Remember, if you need help with your marketing, or someone to look over why something isn’t working, I’d love to help. I also offer a marketing health check to assess your existing marketing activity and provide a list of easy to implement suggested changes.

Now, go forth and conquer!