Key Performance Indicators To Improve Marketing Campaigns
Do you know what makes your company’s marketing efforts effective? Do you have any idea about why your company is growing? If you’re in the sales or marketing team, you know that marketing key performance indicators (KPIs) are what helps one understand what’s working and what’s not working. Although KPIs rule at every marketing discussion, you’ll find it surprising that some marketers still find them confusing, especially the newbies. With the many KPIs to utilize, it can be hard to figure out which one to use. If this is your dilemma, this article will highlight the top key performance indicators such as customer acquisition cost, return on investment, customer retention and return ad spend, your team should be tracking at the end of every quarter. At the end of this article, you will have a much better understanding of crucial KPIs and how they play a role in marketing.
Customer Acquisition Cost (CAC)
When it comes to running a successful marketing campaign, it’s essential to keep track of your conversions. As one of the key performance indicators, the customer acquisition cost keeps track of the amount of cash you need to convert leads into real consumers. Knowing the figure spent for the conversions is crucial as it can help you when building your budget. You wouldn’t want unnecessary expenditures on attracting leads that won’t bring profit to the business. Therefore, the customer acquisition cost is fundamental for effective budgeting.
Return On Investment (ROI)
In marketing, finding out how much you spend for the campaigns and how much you gain in return will help to determine if the campaign is worth it or not. The return on investment is one of the key performance indicators and it measures the amount you earn against the cost of marketing. Subtract the marketing costs from the growth in sales and divide it by the marketing cost to get the figure. By calculating the return on investment, you can safely proceed with the marketing campaign or cancel it altogether to avoid running an unsuccessful marketing campaign, losing time and money.
Sales Revenue as Key Performance Indicators
What matters the most in marketing is the growth in sales. Sales revenue is a critical KPI as it can easily measure your marketing success. Using the data from this KPI, it becomes easier to weed out the marketing strategies that don’t translate to sales.
As successful business moguls will tell you, measuring your sales growth is vital to the long-term health of your business. Thanks to this marketing KPI‘s power, it becomes easier to plan and monitor your campaigns strategically and identify the growth trends.
When it comes to marketing campaigns, you can seek professional services to ensure that you’re making use of all the best resources available to get favorable results. Also, it would be best if you don’t shy away from sharing the sales revenue with your employees. Doing so will make them feel they’ve truly contributed to the growth of your business. It may also help instill a sense of leadership in your team.
Return On Ad Spend (ROAS)
When it comes to brand awareness, ad campaigns are known to be effective. Return on Ad Spend (ROAS) is a specific KPI best utilized to find out if the ads you’re running are successful. It measures the amount of revenue generated by each dollar spent on marketing campaigns. After finding out if the marketing campaign is worth it by calculating the return on investment, return on ad spend is the next phase that shows if the marketing campaign is delivering what is expected of them.
Conversion Rate as a Type of Key Performance Indicators
In the modern world, almost every business venture has a working website. With more people using internet-enabled devices, businesses can easily reach potential customers with the help of a business website. Conversion rate is a type of Key Performance Indicators used to determine the percentage of visitors who complete the desired action.
For example, you want to know the percentage of your site’s visitors who fill in the online forms or sign up for a service. The data you can gather with this KPI will tell you how successful your web pages are at attracting leads. If the conversion rate is lower than your goal, it will be best to rethink the strategy you’re using.
Marketing is not just about winning potential leads. It also involves customer retention which means retaining customers you already have on board as well. While most may think that customer retention isn’t one of the crucial marketing key performance indicators, it’s much essential. The reports from this KPI will help you understand your clientele better so you can develop strategies that will help keep them longer. Besides, with a better understanding of your client base, it becomes easy to attract more leads because you know what your audience wants.
Running a successful business isn’t a walk in the park. There will always be ups and downs. It’s for this reason that you should track your progress continuously no matter what stage your business is in. The key performance indicators such as customer acquisition cost, return on investment and return on ad spend, will help put you in a better position to figure out the health of your business and what needs to be adjusted. It would also help to use tracking tools and software that will help you monitor and manage your KPIs more effectively.
11+ years strategic communications, marketing, and project management experience. I am a trainer at StarWood Training Institute, focusing on online courses for project management professionals.