By Leonard Bryan on Jun 9, 2023
No matter your industry or the size of your business, to be ultimately successful, you need to understand what is and isn’t working in your marketing campaigns. You must measure and analyze performance in order to see where you’ve been and set the right course.
In order to measure your performance, you need to set clear goals to measure your efforts against. This shows whether your results are successful or fall short. These metrics are your key performance indicators (KPIs).
There are many, many types of KPIs. A lot of them are specific to the marketing tool and channel used. This article will discuss a few of the common ones.
It’s an old saying but true one that if you don’t set goals, you will never reach them. Goals should
Once you have determined your goals, you need to create KPIs that will enable you to monitor those goals. Depending on the goal, a KPI might be clicks, views, conversions or any number of other things. In other words, KPIs should show you whether or not your efforts are furthering your goals and by how much. If your efforts are not furthering your goals, it’s time to change direction.
Your marketing KPIs are going to be determined by your goals. It doesn’t help to measure against benchmarks that are irrelevant to your objectives.
Here are some common marketing KPIs you may want to use as a small business. There are many more.
Marketing ROI measures the return from marketing investments and assesses the profitability of your campaigns. You compare how much you spent on the campaign with the revenue you gained from it.
Money talks, so ROI is extremely important. If your ROI isn’t good, really nothing else much matters.
ROAS is similar to ROI but is specific to measuring the revenue you make on advertising in comparison to the money you spend. When you understand ROAS, you know what campaigns to push, sto drop or to adjust.
CTR is the number of clicks on a link. This KPI helps you to determine how effective an ad or a channel is. If an ad or post gets a high number of clicks, then people are interested in it enough to want to engage and find out more.
The cost per click (CPC) of an ad campaign is a metric that represents the amount you pay when a user clicks on your ad.
When setting up your ad campaign, you establish a maximum CPC bid, which is the highest amount you are willing to pay for each click. CPC costs are dependent on various parameters including competition. By analyzing the CPC data, you can assess the performance of your campaigns and make informed decisions.
CPL indicates what it costs your business to get a new lead. It enables you to figure out your budget for generating the number of leads you want to get from a new marketing campaign.
Cost per Mille (CPM)
CPM is a commonly used KPI that measures what it costs you to serve 1,000 ad impressions. You want to use this KPI when you are paying by the impression rather than Pay Per Click. You will often have this arrangement for display ads.
CAC tells you how much you spend acquiring a new customer. This can help you determine which types of customers are the low hanging fruit and how much you need to allot. If you are spending more than the industry average, the CAC KPI lets you know you should be adjusting your strategies.
Conversion rate tracks the number of people who take a specified action such as making a purchase, downloading a lead magnet or volunteering contact information in order to sign up for a newsletter.
If you are getting a high click rate but low conversions, you are losing your prospects somewhere along the way, perhaps on the landing page. That means you need to make adjustments.
CLV analyzes the long-term value of a customer, in other words, how much they are likely to spend at your company over time. This helps you make decisions on how to market to existing customers and how to retain them. To determine CLV, you will want to look at how often the person buys, how much they have bought in the past and the typical amount of purchase.
Long-term customers mean continuing purchases at a minimal cost. It costs much less to make a sale to an existing customer than to a new one.
Website traffic is vital to most businesses today. There are many KPIs you will want to track. These include but are not limited to
If you are marketing on social media, measure the effectiveness by checking views, likes, shares and comments. Are your posts and ads eliciting the response you want? If not, make adjustments and test each one until you see improvement.
Once you determine your KPIs, of course you need to monitor them on an ongoing basis for what works and what doesn’t. There are many tools for this including Google Analytics.
Are your results meeting your goals? Exceeding them? Falling short?
Double down on what’s working and adjust what isn’t. Don’t put a lot of money into a campaign until you know what gets results.
Umbrella Local not only provides expert marketing services, but also sets up metrics so you know what is working. We are always working to improve your results. Contact Umbrella Local to schedule a free consultation through this website form or call 1(646)440-1426.
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