They provide an in-depth look into the performance of your company and how the buyer or customer is interacting with the same. KPIs indicate what is working for you and what isn’t.
If you know what you want to measure you can set up analytics ahead of time and ensure tracking from day 1.
Make it a habit to check and review the most important metrics on a regular and frequent basis.
This not only helps you understand your business well but it also helps you stop any significant losses from happening before it's too late.
Top Marketing KPIs
1. Click-Through Rate or CTR
Campaign managers keep a constant track of the number of clicks an ad garners, versus the total number of impressions it has made.
This means that an ad could be shown multiple times to a user (impressions), but he may or may not have clicked on it.
Therefore, CTR is an important and effective measure of how well an ad is performing.
One of the best practices for a high CTR is putting up attractive visuals with well-written meta descriptions.
2. Conversion Rate
Since you know the number of clicks you're getting, you should check how many of those are converting to a sale.
The conversion rate is the percentage of conversions gained as a result of a campaign.
If you have a low conversion rate in spite of a high click-through rate, you might want to look at how you can optimize the user's experience after he has clicked on the ad, so that a potential sale isn't lost.
3. Cost Per Click
Simply put, this is a simple measure of how much advertisers pay when a user clicks on an ad set. Here, you can decide on a budget for your ad set, along with a bid.
You will then automatically compete with other advertisers for an ad position and will pay the next highest bid price.
Thus, CPC is largely determined by other competitors in the digital market.
Remember that you can set up a "max. CPC" which is the highest amount you're willing to pay for a click on your ad.
4. Quality Score
This metric has been created by Google to help you understand how your ad is doing overall, by taking into consideration various other KPIs as a whole and then looking at that result.
You can closely measure the relevancy of your ad with the help of this metric. Google uses the expected CTR, landing page experience and ad format to give your ad a Quality Score.
A good Quality Score is anywhere between 7 and 10 and equates to you paying less to advertise with Google Ads, a bad Quality Score is anywhere between 1 to 6 and will mean that you're paying more for an ad which can be optimized further to help you save money.
Many advertisers study this KPI to gain a deeper understanding of their ad set behavior and to see how they can tweak the ad to gain more out of it.
5. Interactions Per Visit
This KPI looks at how users interact with your ad set, blog or post. Do they give it a “like”? Do they comment on it? Do they share it with others? How much time are they spending on it?
This helps you understand your audience’s behavior and what works for them to help them interact with your ad set or your blog more.
Usually, advertisers find this out by a trial and error method. Once you’ve understood what kind of content your audience likes, and spends time on, you can put more of it out there.
The more people interact with your brand or business, the more credible and resourceful you seem and the higher the sales go.
6. New Visitor Conversion Rate
When a new user enters your website, you have only a few moments before you either capture his attention or lose him.
Google Analytics helps track your new visitor conversion rate.
You may want to first understand what works for your returning customers and then accordingly use that insight to form a good first impression on the new visitors as well.
7. Customer Retention Rate
This measures how many customers come back to the website. These then become your "returning customers". This can be used as a credible measure of your marketing strategy being solid and you heading in the right direction.
Google Analytics has put a two-year expiration date on returning visitors. If a visitor re-visits your page within two years from the same device, he is counted as a returning customer. If he visits after two years, he now becomes a new visitor.
This KPI helps you delve deeper into why they returned and what's working for you. If their visit converted into a sale the second time around, then you can look into why so and why not the first time. These questions and research will make the conversion process easier.
8. Lifetime Value
This helps you measure how much value a customer can add to your business throughout their lifetime.
The measurement of a lifetime may vary from business to business and industry to industry.
This KPI helps you understand the point where a customer is most likely to add profit to your business. You can then focus on that stage itself with your marketing budget.
9. Bounce Rate
This refers to the percentage of customers who leave your website immediately upon arriving.
You can calculate this by dividing the total number of visitors who immediately leave your website without any interaction whatsoever, by the total number of visitors on your site.
One of the top solutions for a lower bounce rate is to make your website mobile responsive. Statista (2018) reports that 52.2% of all website traffic worldwide was generated through mobile phones and this statistic is only set to rise.
Other than that, make sure your site loads fast. If it takes more than 2-3 seconds to load, this could be where your customers "bounce".
10. The Ratio of Website Leads to Marketing Qualified Leads
You may have a lot of leads from your ads, but how many of those are substantial leads? Meaning do they target the right audience?
Are they qualified to be sent forward to your sales and marketing team? Focusing only on traffic and great content does not work.
You may want to shift your focus on creating content that a potential buyer might want to interact with, to attract more qualified leads to your website. Doing both is great too.
If you've made it till here, you now have a firm hold on understanding and applying the impact of KPIs in your work and business.
Tracking the right data to measure success is imperative to any brand-building exercise.
Keep in mind these key factors the next time you create a marketing campaign.
Remember to first set goals for your digital marketing campaigns and then select the appropriate metrics to measure its impact.
The more you study and practice, the better and more intuitive you get at tracking KPIs, extracting the key data, and implementing that feedback into your marketing strategy.
You will soon be able to easily identify trends and make quick tweaks and adjustments to gain more traffic, leads, and increase profits and sales.