Digital Marketing KPIs - The 12 Key Metrics You Should Be Tracking
by Tom Wright, on Nov 30, 2017 1:13:15 AM
Digital marketing KPIs are the most important metrics a digital marketing team will use to determine the success of their efforts towards achieving key marketing objectives. A Digital Marketing KPI is a measurable value that indicates whether key business objectives are being achieved or not.
We've been compiling a whole bunch of KPI examples as part of our KPI examples mini-series. This post is a small supplement to that series, which provides 12 of the most common digital marketing KPIs, we also include a brief description of why you may want to use each. We suggest you pick at least 2 KPIs to track each of your key business objectives. We'll be covering lead-based KPIs, brand awareness KPIs and also detailed KPIs for monitoring your website's performance.
Examples of Marketing KPIs
Understanding your leads
These examples of KPIs are for helping you to understand the first part of any marketing cycle - your leads generated. No matter what type of marketing you're doing (inbound, outbound, brand awareness, etc) - ultimately it's about creating leads for your sales team to convert. This applies whether you're a retailer selling shoes or a SaaS company selling B2B.
Marketing KPIs: Traffic
The most obvious example of traffic would be website traffic - but the same applies if you have a physical store-front too. How many people are walking past your store (or browsing your site) and therefore how many people have a chance to see your products and perhaps become leads. This is usually measured by combining a volume measurement with a time period - so your KPI might be 'Website visitors per day'. If you're looking for an easy way of tracking your marketing progress on a daily basis, Dashboard software can be a great technology advantage.
Marketing KPIs: Traffic to Lead Ratio
A logical extension of measuring traffic is to measure how much of that traffic actually converts into leads. You'll need to define what a 'lead' means to you - is it someone who subscribes to your content marketing blog, is it a free trial, or a conversation with a sales clerk? Typically you'd express this as a percentage such as '% of traffic which starts a free trial'.
Marketing KPIs: Cost per Lead
Once you have traffic converting into leads, it's time to measure how much each of these leads is costing you (you'll then compare this number with one of your sales KPIs around value per sale). Depending on how you source your traffic, this might be easy or hard - online platforms such as Google AdWords give you a clear cost per lead - whereas inbound marketing efforts through organic search are much harder to quantify.
Marketing KPIs: Channel Mix
This is a bit of a cheat, as it's actually several KPIs merged into one. As you start to get an understanding of your cost per lead and value per sale, you'll almost certainly notice that the numbers differ depending on which channel the customer first found you in. Inbound marketing sourced customers might be inexpensive but low value, whilst outbound customer might be expensive but make you great revenue. It's important to define a target channel mix and strive toward it, to avoid taking the easy or least expensive route, just because it's there. For example you might decide that you need to grow inbound sales by 10% or increase outbound by 30%.
Understanding your brand effectiveness
People often overlook the power of an effective brand in their marketing strategy - but this can make a huge difference not only to the success of your marketing but even in your costs. A more powerful brand will likely drive a lower cost per lead with exactly the same marketing. Measuring brand effectiveness is tough and an imprecise science, but these KPIs are a great starting point:
Marketing KPIs: Brand Recall
This becomes more important as your organization grows, and is a great way to track any 'halo' effect from your marketing efforts. Brand recall measures how many people remember and correctly identify your brand after having seen it somewhere. In other words, how effective was/is your marketing at placing your brand at the forefront of your customers' minds. This is typically measured through a survey to people who have been exposed to your marketing efforts (such as attendees at a conference) - they're asked to identify your brand from a list of competing brands (who were not present) - the percentage that succeeds represents your brand recall (or awareness).
Marketing KPIs: Social Media Mentions
Social media is a huge part of most organization's marketing campaigns, and one of the best things that can happen is for people to start organically mentioning your brand or products on the likes of Facebook, Twitter, etc. The more they mention you, the more traffic you'll attract and the more likely you are to be part of an ever-elusive viral marketing episode. This is typically measured as 'Mentions per week' or something similar. Just be careful - not all social mentions are positive!
Marketing KPIs: Viral Coefficient
Whilst we're on the subject of viral, we should mention this awesome marketing KPI - which measures how good your customers are at helping you to reach more customers in turn. The phrase viral is actually a little misleading, as you don't need to achieve a truly viral marketing campaign to be able to effectively measure this number. In essence, your viral coefficient is a ratio that describes how many total customers each new customer actually represents, when you factor in their potential to refer, share your content, etc. To calculate it, you need a few numbers: ( 'no. of current users' x 'invitations sent by current users' x '% conversion rate' )no. of current users = Viral Coefficient.
Marketing KPIs: Net Promoter Score (NPS)
You could certainly argue that your NPS isn't really a marketing KPI. Your NPS measures how likely your customers would be to refer a friend or colleague to your product. However given existing customers are a crucial marketing channel for gaining new customers, we would be remiss to ignore it. NPS is calculated by asking customers on a scale of 1 to 10 how likely they would be to recommend your product. This is then converted to a scale between -100 and +100 to give your NPS. NPS is usually time-bound, so typically you would look at your NPS for the past 30 days, rather than the total from the beginning of time to ensure that the KPI remains relevant. We measure our NPS score at Cascade using a system called Delighted and then synchronize the data back to one of our marketing dashboards built in the Cascade Strategy solution.
Understanding website performance
OK, so not everyone has a website, but I'm willing to bet that you do since you're here reading this, so let's dive into the best marketing KPIs for tracking website performance. We've covered some of this ground already in the 'Leads' section above, so this expands on that with new website specific marketing KPIs:
Marketing KPIs: Page Conversion Rate
When it comes to websites, everything is ultimately about conversions. Getting people to start a free trial, buy a product or whatever it is that you want them to do. You need to measure as a percentage, which of your landing pages is the most effective at getting people to complete that action. Once you understand this, you can start to figure out why it's so effective, and how to repeat that success on other parts of your website. Page conversion would be measured using a percentage of the total visitors to the page that ultimately goes on to convert.
Marketing KPIs: Time On Site
If people are spending just a few seconds on your site before clicking the back button and bouncing, it's likely that you're doing something wrong. They're certainly not converting if they end up heading back to the Google search results page within a few seconds of clicking on a link to your site. A good time on site will vary depending on the complexity of your product and the depth of your content. Making sure your content is filled with useful internal links is a great way to keep people engaged. You may also want to combine with KPI with a metric such as bounce rate.
Marketing KPIs: Google Page Speed
Most of the other posts that I dug up in my research for this article skipped over this one, but it's becoming increasingly important in the world of the modern web. Speed. If your site is slow, or even if Google 'thinks' your site is slow - that's going to hurt not only your user experience (and likely screw up all the KPIs listed above) - but it's also going to down-weight you in Google's ranking algorithm. Google hates 3 things in particular when it looks at websites and how to rank them - 1) Sites that lack mobile responsiveness 2) Sites which don't use 'HTTPS' (i.e. potentially insecure sites) and 3) Slow sites. You can use Google's free PageSpeed tool to get a score for your site. Work on speeding up your site and regularly monitoring that score over time.
Marketing KPIs: New User to Returning User Ratio
Every visit to your site is not equal. When you start diving into your conversion rates, you'll likely notice that returning users (people who've been to your site before) have a much higher conversion rate than new users. That's because they've made a conscious effort to return to your site and are clearly interested in what you're doing. Measuring and increasing this ratio is key to driving healthy site conversion rates.
Hopefully you've found our examples of KPIs for marketing teams useful! Next up, we'll be taking a look at KPIs for HR teams. If you're looking for a platform to help you create and track KPIs for your business, then look no further than our strategy execution platform Cascade!