Marketing KPIs are the lifeblood of any marketing organization.
Numbers. Data. Metrics. KPIs.
Data, specifically data related to marketing KPIs, is what is top of mind for most marketers these days. And yet 55% of marketers admit that data strategy is their biggest flaw.
There is certainly a disconnect. And we get it, data can definitely be intimidating. So let’s break it all down, make it manageable. Let’s demystify the hit squad and show how marketing KPI helps translate aspirational goals into hard targets (#RESULTS) your marketing team can work towards
In this article, we’ll identify the key metrics (Key Performance Indicators, aka KPIs) your team should must track as well as the tools necessary to make it happen.
What are marketing KPIs?
KPI stands for Key Performance Indicator, a data point used to measure (in part) the success or failure of a project or campaign.
A marketing KPI helps you determine how much a particular action has occurred (or not occurred). It’s a critical metric that informs teams as to their progress towards predefined goals. Examples include:
- Volume of organic website traffic (aka, website visitors)
- Monthly sales
- Email open and/or click-through rate
- Ad clicks
- Weekly (potential) customer referrals
And so so many more.
The key: KPIs help reveal — at a glance — if a strategy or change you’ve made to your business has had the desired impact or effect.
Marketing KPI, therefore, is simply the use of KPIs to determine the direction of your marketing campaigns. It’s an integral part of a data-driven marketing strategy.
Note: the opposite of a KPI is a vanity metric — numbers and data that make you look good but aren’t useful for formulating strategy or understanding business performance.
But KPIs are more nuanced than just “monthly sales.” There are many types.
The 5 main types of marketing KPIs
There are several types of KPIs that can generally fall into one of five buckets:
- Inputs: measure resource usage to produce the intended result. For marketing campaigns, this often translates to dollars (or pounds or yen) and hours.
- Processes: analyze your business processes’ efficiencies at turning out the output you seek. For example, how quickly your team can produce a marketing campaign.
- Outputs: show how much work was done. So, the number of pieces of advertising collateral you produced for a campaign over a specific period of time.
- Outcomes: detail output results, split into intermediate (somewhere before end of the sales funnel, such as brand awareness or website traffic) and end (i.e., conversion rate).
- Project: deal with the project itself. For example, schedules and risk.
As a visual:
KEY (important, strategic, critical) KPIs often combine several of the above: Return on Investment (ROI) is a marketing metric that combines input (often, money invested) with output (closed/won sales).
Before we continue …
It’s important to note that a marketing KPI and a marketing metric are not one and the same.A marketing KPI is most often expressed as the number of times an action has occurred (i.e., volume of organic traffic).
A marketing metric is most often expressed as a rate (i.e., volume of organic traffic over six months — the rate).
What makes a solid marketing KPI?
Simply put, the best marketing KPIs are strongly aligned with the organizational mission and vision AND strategic goals.
Marketing KPIs are the bridge between high-level strategic goals and the “on-the-ground” efforts.
Let’s take customer service as an example.
A firm that strives to provide the best customer service cares deeply about customer retention … more so than acquisition. Higher customer retention implies the firm is accomplishing its mission of providing best-in-class customer service.
The best-of-the-best marketing KPIs are:
1. Straightforward: They are easy to track and simple to measure. They should provide helpful information without raising additional confusion or questions. Simple KPIs make it easy for people to understand how their work contributes to moving the organization forward.
2. Actionable: All should be able to easily understand how to use the information the KPI provides. monday.com makes it simple to view a range of KPIs in our intuitive and colorful dashboards. This, in turn, means agreeing on concrete actions is that much easier.
3. Relevant: Seems like an obvious one, no? KPIs must be relevant to what is being measured. For a digital marketing campaign aimed at spreading brand awareness, KPIs related to customer satisfaction — such as retention — won’t be that important (important, but not relevant!) On the other hand, measures like blog views or shares would be relevant (and important!).
Some tips on how to get the most out of marketing KPIs
Creating the “ideal” marketing KPIs is both an art and a science. There are definitely some “best practices” which we will outline below, but there is also some art to the process.
Hint: It’s okay (often recommended) to revisit KPIs often and tweak as you deem necessary (changing priorities and goals).
Are you A/B testing a landing page, monitoring influencer engagement, or tracking pop-up conversions?
Whatever you’re measuring to calculate your success, you’ll need to build a strong digital marketing KPI strategy to recognize the leverage points of your target audience.
Here are a few tips to get you on the right track:
#1: Identify the correct KPIs
KPIs must be tied to goals — organization, department, team, whatever. But they have to be connected to goals.
EXAMPLE: You want to increase email marketing engagement. Start by testing two different email newsletter formats. You can do this by splitting your list 50/50 (randomly), or if your list is very large, do this test with an equal (again, random) portion of your overall list.
Possible KPIs:
- Email open-rate
- Email click-rate
- Demos booked per email
Want to make tracking of these email marketing KPIs easy?
With your KPIs neatly organized, you can quickly see which campaigns are leading the way. This makes it easier to spot hot trends among your audience: “Perfect. Let’s produce more content like this.” Additionally, you are able to increase ROI by redirecting resources from poor-performing campaigns to high-performing ones.
The KPIs you track must relate to the outcomes you want to achieve.
Some examples:
- To drive brand awareness through your blog, focus on unique visitors
- To drive brand growth through your blog, focus on low bounce rates
- To drive lead generation through your blog, focus on leads generated by each article
- To drive sales qualified leads (SQLs) through your blog, focus on the number of leads converted where source = blog
Focus on the KPIs that directly reflect the progress you’re making toward your marketing goals, not just the most apparent sign of success.
#2: Set metrics
Remember: Marketing KPIs and marketing metrics are not the same.
But … they are intrinsically related.
Draw on your marketing goals to shape your metrics by matching KPIs to your targets.
For your next marketing campaign, test different social media ad types to see which results in the highest number of subscribers.
The metric you need to measure: cost-per-subscriber-per-ad-type. Then compare each ad type by this metric to determine where you should invest. For a visual overview, you can use a marketing dashboard tool to connect your marketing performance data and track metrics.
#3: Target marketing campaigns to KPIs
Once you have enough data to draw actionable conclusions, take immediate action.
Example: In your seasonal ads vs. generic ads A|B test, the seasonal won (based on the KPI you chose). Your very next ad campaign should be seasonal trends. Boom.
Missguided, a UK-based online clothing retailer recently jumped on a weather trend, capitalizing on an upcoming heatwave. Having noticed extra sales in summer clothing since the heatwave was announced, the team at Missguided reacted instantly with weather-based (personalized) campaigns.
If you’re unsure about your branding or which products customers would like, start by A|B testing landing pages, emails, ads, and social media campaigns. Monitor the important KPIs to see which provides the best ROI.
Marketing KPI examples to track
Generate engagement.
Nurture leads
Convert sales.
Foster loyalty.
Encourage referrals.
There is no lack of programs (and metrics) to track as a marketer.
So you don’t go crazy, narrow down KPIs to specific campaigns and focus on targeting realistic metrics.
Here are a few KPIs to consider for your next marketing campaign.
Sales growth
Sales growth crosses over with sales KPIs, but it’s still vital to marketing.
This KPI measures how much sales have increased over a period. It informs strategic decision-making at the executive level.
Of course, consistent, positive sales growth numbers are generally a good sign.
To calculate sales growth, you first subtract the last period’s net sales from this period. Divide the result by the last period’s net sales to get a decimal, then multiply by 100 to arrive at your net sales growth percentage.
EXAMPLE: Last quarter you grossed $100,000 in sales. This quarter, the number grew to $120,000. So, $120,000 less $100,000 = $20,000. Divide that by $100,000 to get 0.20 and multiply by 100% to get 20%.
See, math isn’t THAT hard.
Return on Investment (ROI)
ROI is one of the most critical KPIs for your marketing activity. It measures how much revenue you generate for each dollar spent on all marketing efforts, from people involved to tools used … and so on.
Marketing ROI helps justify spend, especially to the C-Suite. If a marketer can demonstrate that investing X in a campaign will bring 5x, management will be more likely to sign off on your campaign.
ROI is helpful for optimization efforts, too. You can tweak your campaigns to see if you generate more or fewer dollars, helping to refine your marketing strategy as a whole.
To calculate ROI, subtract your marketing investment amount from total revenue, then divide the result by your marketing investment amount. Finally, multiply by 100%.
Wait. More math?
EXAMPLE: A recent marketing campaign cost $10,000 but generated $30,000 in revenue. Subtract $10,000 from $30,000 to arrive at $20,000. Then, divide that $20,000 by $10,000 to get 2. Multiply by 100% to arrive at a 200% ROI.
200% ROI is good!
Return on Ad Spend (ROAS)
ROAS is a specific type of ROI that looks at revenue generated per dollar spent on ad campaigns. It most often refers to digital ad platforms, like Google or Facebook ads.
To track this KPI, we recommend using monday.com’s Campaign Tracking, which looks like this, and (once customized) automatically calculates your ad’s return on investment:
Unlike ROI, ROAS excludes non-ad costs and activities — such as those involved in content marketing campaigns. Thus, it’s suited mostly for determining ad platforms, structures, angles, and copy to use.
Still, the calculation is much the same. Subtract your ad spend from your campaign’s revenue, then divide by your ad spend number.
You’ve got this math stuff by now, right?
Customer Acquisition Cost (CAC)
CAC measures the money you spend to gain the average new customer. You can calculate CAC for individual marketing campaigns or across your entire business.
For example, if you spend $100,000 on marketing and gain 50 new customers, the campaign’s CAC is $2,000.
Once you know CAC, you can determine if it’s too high, then brainstorm ways to cut it — such as increasing organic traffic through SEO or encouraging loyal customers to be brand advocates.
You can also determine how many customers you want to acquire over a specific period, then multiply that by CAC to determine an approximate marketing budget.
How monday.com helps makes all of the above EASY
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