Measuring or quantifying the success of a marketing strategy initiative has always been a challenge. Each organization has its own method to measure and identify marketing success. It is this challenge that prompted the general use of marketing strategy metrics and the specific indicators of KPIs. These two terms are often used interchangeably, so let's start by defining the two terms to better understand how to measure and identify our success parameters.
Metrics vs. KPIs (Key Performance Indicators)
Metrics refer to a broader term of a single marketing aspect on a strategic level such as social media, Tradeshows, content, website, customer retention, customer growth, etc. KPIs (Key Performance Indicators) are sub-sets of these metrics that utilize specific parameters to achieve success. Take, for instance, social media metrics, the KPIs for this metric would consist of likes, followers, comments, shares etc.
Understand Your Main Marketing Channels
Now that we have cleared the difference between metrics and KPIs where do we start? We seem to be overwhelmed with so many types of metrics and KPIs all of which are all important for our business growth. As a result, many organizations tend to spread out too thin over all possible KPIs and metrics only to generate less than optimal results.
The first step is to understand your general marketing channels. I believe that if you have too many marketing channels, chances are that your strategy needs to be tightened. Let's start by mapping five of our main marketing channels, for instance: social media, lead generation, marketing events, customer retention, and partnerships.
The second step is to reevaluate the marketing channel itself, is it the right marketing channel for your business? Just because TikTok is the latest buzz in social media, doesn't mean your business necessarily has to be there. If LinkedIn is a more suitable platform for your business, reevaluate where in LinkedIn you're establishing greater engagements and brand awareness. Yes, eliminate what is not generating results. All those "ghost groups" where everyone just posts and no one bothers to read anything. Reroute your resources and energies to what works.
The third step is to define at which stage each of your marketing channels is. Is the website maintained on a regular basis? Is it updated with the latest content? Do your marketing channels align with the organization's marketing messages? Can you keep up with all your marketing channels? Think about the resources each channel requires and whether these resources can be met.
Defining Your KPIs
With all the buzzwords and KPIs, businesses and even large organizations want to have it all. But at what cost? Having it all often comes at the expense of quality. Quality leads, quality campaigns, and quality marketing channels. Not all marketing channels, metrics, or KPIs should be in focus at all times.
KPIs should be defined based on 3 principles:
· Your marketing strategy
· Your chosen marketing channels on which you focus on
· The stage of each marketing channel
If we take social media for example, and you have already established a great number of followers, perhaps a more relevant KPI for you at this stage would be to take your social media to its next phase and focus on social engagement. That doesn't mean you neglect your previous KPI of followers, it means you continue to maintain it on a certain level and shift your energies and resources to establishing engagement.
Every metric has plenty of KPIs and it's important to match the relevant KPIs per channel based on the stage in which each marketing channel is at, otherwise it's easy to find yourself spreading out thin on multiple KPIs and achieving mediocre results. Focus, assess on a regular basis, and don't be afraid to realize that something no longer works for you.
Here are some marketing KPIs to consider:
Lead Generation KPIs
· CPL (Cost per Lead) – How much do you spend on a lead? This is usually calculated by taking the overall amount you spent on your social media campaign or event and dividing it by the number of leads you got. The result will give you the price per lead.
· CPS (Cost per sale) – A lead is certainly the first step to generating a sales opportunity. However, understanding how many leads actually end up assigned contracts and sales, and how many leads it takes to close a sale is just as important. The calculation here would be the total amount spent on leads divided by the number of closed sales deriving from these leads. The result will indicate the cost per sale.
Website KPIs depend on the status of your website. Is it new? Is it regularly maintained? Does it have a blog?
· Organic Website Traffic – The number of visitors that visit your website organically and not
via paid advertising. Free tools such as Google Analytics will provide this information.
· New Users vs. Returning Users – Out of the organic traffic, how many users are new users? How many are returning users? This metric reflects the effectiveness of retaining an online audience. It also reflects the value of your content. The greater the percentage of returning users the greater your value in content and online retention. B2B companies may strive for a 50/50 ratio between new users vs. returning users.
· Number of Downloads – This metric helps evaluate the relevance and interest in longer content such as Whitepapers, brochures, and manuals and may also serve as a compass for the content type and focus your audience is interested in.
· Pages per Session – How many pages does a user visit per session? This KPI also lists the visited pages and can reflect on what pages are of most interest to your audience. These are the pages you want to maintain and update regularly with fresh content.
· Number of Followers
A basic KPI that measures how many people follow your page. The average of followers who actually see your content is 6%. In recent years, engagement KPIs have come to be more important than the number of followers.
· Engagement Rate
The engagement rate measures the number of interactions per posting and reflects on the relevance to your audience.
· Conversion Rate The number of users who click on your content and adhere to your call for action. The call for action can include: scheduling a meeting, request for a demo etc.
· Customer Retention Rate
This KPI reflects the rate at which customers stay with a business. In other words, what is the percentage of customers who remain with you after a given time?
· Customer Satisfaction
Are your customers satisfied with your service? Why do they stay with you? Where can you improve your service? All these can be measured via a customer survey, either per quarter or on an annual basis. The feedback from your customers is crucial for developing your business.
· Customer Value
How much revenue vs. resources are invested in a customer? A customer that requires low investments, whether in time or other resources that generate higher revenue, is a high-valued customer. If the resources invested in a customer surpass the generated revenue from this customer, this would be considered a low-value customer. At some point, you would probably need to consider whether a low-value customer is right for you and what alternatives can you offer or suggest to that customer.
Focus and assess on a regular basis, and don't be afraid to realize that something no longer works for you. It's tempting to follow all the buzzwords, but please don’t, or you'll find yourself spreading too thin over too many marketing initiatives that generate mediocre results.
Understand your customers, and where they are, and choose the relevant marketing channels based on where your customers are. Not every marketing channel is right for your business, accept it.
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