Essential Metrics and KPIs to Include in Any Marketing Report

Measuring the right marketing KPIs allows you not only to evaluate the effectiveness of your marketing efforts but also to solidify your future strategy. However, not all marketing KPIs are valuable or worth measuring. Some metrics don’t fully enhance your business goals and others are simply too hard to track objectively. 

In this post, we’ll explain why measuring marketing KPIs is important and which ones should you include in your marketing dashboard.

Why Track Marketing KPIs?

Tracking Key Performance Indicators (KPIs) for your marketing is time-consuming and can often seem tedious. There is a lot of pulling of data involved, and for some, this may not seem worth it. That line of thinking, however, can get you in a lot of trouble.

Whether your marketing budget is big or small, it’s so important to be sure the marketing dollars you spend are giving you a positive return. By tracking your marketing KPIs, you can pinpoint areas that need improvement and make adjustments, or you can find out what’s working and invest more money in those areas.

By failing to track the results of your marketing, you risk wasting tons of money and time on efforts that aren’t working. And if you aren’t tracking your marketing results, you can end up losing out for quite some time.

If your marketing is costing you more than the revenue it’s generating, you’d want to know, right?

By tracking these marketing KPIs, you can turn things around and ensure your marketing is on the right track.

Return on Ad Spend (ROAS)

One of the ways to measure advertising effectiveness is by calculating Return on Ad Spend or ROAS. ROAS is the percentage of total profit reached as a result of advertising. 

To calculate ROAS, you take the money you spent on the campaign and divide that by the revenue generated by the campaign.

For example, if you spent $2000 on advertising and your efforts generated $10000 in revenue, you would use the following formula.

$10000 / $2000 = $5

That $5 symbolizes $5 of revenue generated for every $1 spent, so your ROAS is 500%.

This can help you determine whether your efforts are working. You’ll also need to dig a bit deeper and determine the margin of your products and other aspects to ensure you’re making money at your calculated ROAS.

Organic Traffic

Also known as the “free” traffic, is traffic that comes from a search engine (Google, Bing, etc.) and not through Pay Per Click (PPC). 

Organic traffic is a great way to show that your content marketing and SEO efforts are working. And if you dig a bit deeper and explore which pages are attracting the most organic traffic – as well as how those pages are performing – you can gain some really useful insights.

Image: Viewing organic search traffic in Google Analytics – Source

New Customers

The best metric for marketing is, not surprisingly, new customers. New customers give you the most bang for the buck, in terms of money you spend, in terms of time you invest, in terms of people you hire.

You should be tracking new customers through a CRM. Available CRM options vary significantly in cost and complexity, so set up a CRM you can handle. Salesforce, for example, has tons of bells and whistles. It’s great for enterprise companies, but it may not be the best option for small business. For small businesses, something like Active Campaign may suffice.

The important thing is to have a place where you can track how your customers convert through from lead all the way to the signed deal or purchase. You can also track the source to see where your new customers are coming from.

Conversion Rate

In marketing, “conversion rate” is how you measure the success of your marketing efforts. It is the percentage of people who visit your site, sign up for your newsletter, or buy your product.

For example, if you have 100 people click on an ad that sends them to a landing page to download an ebook and 25 of them convert, you have a 25% conversion rate. That’s pretty solid. Typical conversion rates are more in the 2-5% range, so don’t get discouraged if you don’t hit that 25% mark (it’s a pretty far-fetched number).

One way to improve your conversion rates is to do some A/B testing. Track the conversion rates of your landing pages or product pages, and then test new deals, new images, new messaging. Track one version against the other. This can give you some excellent insights into what resonates more with your target audience members and can allow you to make tweaks to improve conversion rate.

Image: A/B testing to improve conversion rate – Source

Marketing ROI

ROI is a ratio that measures financial return in relation to an investment. In other words, Marketing ROI measures the gain or loss that results from putting money, effort, or resources into a marketing campaign or activity. ROI is calculated by dividing the total gain or loss (the amount reinvested) by the amount invested.

ROI = (gain or loss – investment)/investment

If you fail to track the ROI of your marketing and attribute value to each campaign, you risk wasting a ton of money on tactics that may be generating leads but ultimately costing you more than the revenue you generate. Obviously, this isn’t something you want to present to the leadership team.

“Good new is we closed 100% more deals in Q2 than in Q1 due to our new ads campaign. Bad news is each lead costs $100 more to convert than the revenue it actually generated.”

Can you imagine how that conversation might go? To avoid this, make sure you’re tracking your marketing ROI. If it isn’t where it needs to be, make adjustments to give it a boost.

Customer Lifetime Value

Your average customer has a value you can attribute to the lifetime of the business they do with you. It’s called customer lifetime value, and it’s the most important number in a company’s financial report.

If a company’s customer lifetime value is lower than its cost of acquiring customers, the company’s business model is broken. If it’s higher, it’s working.

To calculate the value a customer brings to your business over the full span of them being your customer, you can use the following formula.

Average Order Total x Average Number of Annual Purchases x Average Retention Time (In Years) = Customer Lifetime Value

Net Promoter Score (NPS)

NPS helps you understand how likely your existing customers are to recommend your company. It can also indicate how likely they are to purchase from you again or refer someone else to your business. Net Promoter Score is expressed in a number from 0 to 10. with zero meaning “very likely” and 10 meaning “very unlikely.” to recommend. 

Typically, those who fall within the 9-10 NPS are the ones who are going to shout about your brand from the rooftops. The 7-8s are great, but they are more likely to stay quiet. You can find this out through a simple one-question survey asking how likely your customers are to recommend your product or services to their colleagues, friends, family, or others.

Image: Net Promote Score 0-10 – Source

If you find your average leans more to the left side of the chart, you may want to do some follow up lines of questioning to determine what’s going on. This can then help you turn that negative NPS around.

Wrap Up

Good data is the foundation of good marketing, regardless of your role on the team. If you’re just getting started with marketing, this is a good guide for understanding which metrics are important for reporting on marketing performance. If you’re more experienced, you can use it as a checklist before preparing your next marketing report.

Proving the value of the work you’re doing is challenging in today’s increasingly complex marketing profession. There are so many metrics floating around, so hopefully this helps you narrow down the right ones to track and report on to showcase the value your efforts bring to the brand.

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