Do you have any idea what makes your company’s marketing efforts successful? Any clue as to your business’ marketing performance? Any hint of why your company is doing well—or not so well?
Understanding what’s working and what’s not working in marketing—otherwise known as your marketing’s Key Performance Indicators (KPI)—should be an imperative part of your business’ growth strategy. If it’s not, well then you should probably keep reading.
As a business existing in the 21st century there should be no lack of understanding over what is making your company’s marketing efforts triumphant. And on the contrary, there should also be no mystery to what’s making your company’s marketing endeavors tank. All your marketing should be measurable. There is no excuse for not knowing why your company’s marketing efforts are killing it or getting killed by the competition. I repeat…there is NO EXCUSE for not knowing why your company’s marketing efforts are killing it or getting destroyed by the competition. Zero. Zilch. Nada. It’s time to start investing some time into understanding your company’s marketing KPIs. That time is now.
There are so many marketing KPI examples out there today—all of which likely have some applicability to your company’ marketing initiatives. Chances are if you conduct a simple search of ‘marketing KPIs’ you will find a mishmash of something or other that should help you improve your marketing strategy. But not all of them are helpful. For instance you won’t find any KPIs around old-school metrics like circulation, impressions or brand awareness on this list.
The following is a list of 16 helpful marketing KPIs you need to be measuring…but probably aren’t.
1. Sales Growth
At the end of the day the best way to judge your marketing’s success is by measuring its growth in sales revenue. Fair warning—to do this you must have a strong stomach. Once you start measuring your marketing’s effect on sales growth, it will initially take some adjusting to weed out the marketing that does drive sales. Measuring your sales growth is, however, vital to the long-term health of your company. Not only does it serve as a good indicator when it comes to strategic planning, but it also allows for identification of growth trends.
Don’t be shy in sharing your sales revenue with your employees as well. This often instills a level of ownership with your workforce and reinforces that everyone is in the same boat navigating toward the same end goals.
It’s simple math. The more leads you get the more sales opportunities you have and the more sales opportunities you have the better are your chances of sales growth. The importance of leads to a marketing and sales department is comparable to the importance of something like gasoline to an automobile—it’s what drives them.
Not all leads are created equal however. Be sure you’re familiar with the difference between Marketing Qualified Leads (MQLs) and Sales Qualified Leads (SQLs). These are simply different lifecycle stages of the same lead.
A marketing qualified lead (MQL) is a lead judged more likely to become a customer compared to other leads based on lead intelligence. MQLs are those people who have raised their hands (say by downloading an eBook or whitepaper) and identified themselves as more deeply engaged, sales-ready contacts than your usual leads, but who have not yet become fully fledged opportunities (source).
A sales qualified lead (SQL) is one that your sales team has accepted as worthy of a direct sales follow-up (source). SQLs have been vetted much further and indicate a prospect that is ready to make a decision.
Understanding the synergy between both MQLs and SQLs is vital toward understanding your company Leads to Close ratio—which is the number of leads you’ve received over a specific period of time divided by the actual amount of leads you’ve closed.
3. Lifetime Value of a Customer (LTV)
What is your customer worth to your business over the lifetime of your relationship? Any idea? Hello? Bueller?
The idea of determining just how much your customers are worth to you seems a bit daunting, however, that’s no excuse not to know it. This KPI is a great way to gauge your company’s ROI, and it’s a wonderful figure to help strategize future business goals. While not exact, figuring out the lifetime value of a customer involves figuring out all sales your average customer have initiated over the course of your relationship.