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KPIs, Key Performance Indicators, are values used to quantify a company’s overall performance or can be specific to a particular department or project, thus verifying that the strategies adopted are oriented towards the right objectives.
There are different types of KPIs that vary according to the objectives or the department. In this article, we will focus on KPIs for marketing.
We'll find out about the most important metrics to observe, how to measure them and what tools to use.
Marketing KPIs: what they are and why they are important
Marketing-related KPIs are metrics, i.e., values, expressed in numbers or percentages, that provide objective information on a company's marketing performance, and are useful to improve procedures where necessary.
Here are some of the most common business KPIs:
- Retail KPIs
- Logistics KPIs
- Sales KPIs
- Marketing KPIs
- Production KPIs
- Warehouse KPIs
- Social media KPIs
But the list doesn’t end here, since each analysable company department can have different performance indicators that become useful for its improvement.
In the marketing sector, KPIs can define return on investment, campaign effectiveness, lead generation, customer experience quality, brand awareness level, etc.
In digital marketing there are many KPIs, and analysable data is therefore infinite. Thinking of analysing all this data is unrealistic, which is why it is important to first establish business objectives and then decide which marketing KPIs are more interesting.
11 marketing KPIs to monitor
As in traditional marketing, KPIs have become fundamental in digital marketing too. Since this type of marketing is the most common among small and medium-sized companies, let's discover the main marketing KPIs to monitor, dividing them into categories.
Web marketing KPIs
- Page views
- Average duration of the session
- Bounce rates
Email Marketing KPIs
- Delivery rate
- Open rate
- Unsubscribe rate
Financial marketing KPIs
- Customer Acquisition Cost (CAC)
- Return on Advertising Spend (ROAS)
KPIs for customer management
- Churn rate
- Customer Lifetime Value (CLV)
Traditional marketing KPIs
- GRP Gross rating point
The first category we would like to examine is that of web marketing KPIs, with particular focus on the website.
Page views
Indicate the total number of pages viewed.
For a company, a website is one the most important channels. By monitoring and understanding the metrics related to its views, you can understand if a site is generating enough traffic.
Obviously, there are no universal numbers. It is unrealistic to expect a hardware store site to achieve the same numbers of a fashion and gossip one. What matters is setting achievable and realistic goals. A good strategy can be to monitor the competition.
How can you measure it? Google Analytics is an excellent free tool to track your website views. Furthermore, as we will see, it allows you to analyse information related to the traffic of a site. To analyse the views of the competitor's site there are several free and paid tools such as SimilarWeb, SeoZoom.
What is a good strategy to improve it? To increase the number of views you should aim for a better SERP ranking. In this case, inbound marketing and KPI become two inseparable elements. Inbound marketing is attraction marketing, which aims to obtain new customers by creating interesting content. It is therefore good to monitor content marketing KPIs to improve content for your users.
Average duration of the session
As far as site views are concerned, the average duration of the session is the time a user spends browsing a site. It is an important value because it allows you to understand which sections and contents of a site are the most interesting.
How can you measure it? Once again Google Analytics is the best tool to monitor this information.
What is a good strategy to improve it? Once you have established the most interesting contents and sections of the site, you can concentrate on these, trying to create more valuable and complete contents for your users.
Bounce rates
Bounce rate is a marketing KPI that measures the percentage of website visitors that leave a website after viewing only one page. This can happen for several reasons:
- The site or page isn’t interesting for the user, who decides to go back to the home page or directly to the search engine.
- The user immediately found what they were looking for on the page but did not want to interact further.
- The user left the page because of malfunctioning or invasive advertising.
How can you measure it? Bounce rate can be found on the Google Analytics control panel. Obviously, a higher percentage of bounce rate is considered negative.
What is a good strategy to improve it? The different reasons that push a user to leave a page or site after a few seconds make us understand that there is no universal strategy to improve it. It is therefore necessary to develop different strategies based on each bounce rate. In general, however, it is important to provide content that is linked to each other and that is of great interest to your audience.
The second category we want to look at is the one related to email marketing KPIs.
- Delivery rate
It is a marketing KPI that indicates the delivery rate of emails sent to your subscribers without system errors. In fact, sometimes not all emails sent by the email marketing platform reach their destination. This often happens when an address has typos, or the user changed the email address.
How can you measure it? There are several email marketing platforms and each of them has a dashboard to analyse metrics. Sometimes the same metric takes on different values based on the platform that is being used. Here are some of the most common ones:
What is a good strategy to improve it? The best way to improve delivery rate is to constantly check and update your database, thus making sure that all subscribers are active and real. This is because delivery errors can be temporary or permanent (soft or hard bounce), depending on the reasons why the email was not delivered. Therefore, it is good to understand the nature of the problem in order to solve it.
Open rate
Once the email has been correctly delivered, it is good to analyse the open rate. It is the rate of emails opened at least once by recipients. A low open rate can be due to low interest regarding the contents of the newsletter. Alternatively, it could also be caused by the user's mail system, that automatically directs them to the spam folder.
How can you measure it? it is the platform you use that provides this data.
What is a good strategy to improve it? Subject, preheader and sender are the first three elements that users read when they receive an email. To increase the chances of intriguing your recipients and pushing them to open the email, you must optimize the first two. Another solution is to send the newsletter in different time slots to discover the most suitable ones for your audience.
Unsubscribe rate
Unsubscribe rate is the marketing KPI that indicates the number of users that request to be unsubscribed from the mailing list. The reasons can be different: they subscribed by mistake, their interests have changed, or the unsubscribe rate can be a consequence of too many emails perceived as spam.
How can you measure it? As always, the email marketing platform you use offers detailed reports related to these metrics.
What is a good strategy to improve it? Focus on content that is useful and interesting for your audience. It is also important to consider that not all content is suitable for every user on the mailing list. A good strategy is to segment your database even more, especially if you deal with very different topics.
Another interesting category is that of financial KPIs linked to marketing.
Customer Acquisition Cost (CAC)
The Customer Acquisition Cost (CAC) is the cost incurred by a business to develop marketing campaigns with the aim of acquiring a new customer in a specific time range.
To calculate it, simply divide the investment in marketing and communication by the number of acquired customers.
CAC = cost of marketing and communication / new customers acquired
Generally speaking, marketing expenses can also include sales expenses, but this formula in particular offers specific information on the performance indicators of the marketing sector.
What is a good strategy to improve it? To reduce the cost of customer acquisition there are several methods that do so indirectly, for example by improving the SEO and content marketing of your site. Organic search is, in fact, still one of the best methods to increase traffic. This KPI must be combined with that of other indicators such as content marketing KPIs.
Return on Advertising Spend (ROAS)
ROAS is a KPI that allows you to measure the economic return on advertising investments, i.e., the revenue generated by an advertising campaign compared to the costs incurred. It is calculated by applying the following formula:
ROAS = (advertising campaign revenue / investment costs) * 100
This KPI is particularly useful in digital marketing, as it provides immediate insight into the results of marketing campaign investments.
What is a good strategy to improve it? In addition to reducing the budget of less profitable campaigns, it is important to leverage other performance indicators, such as cost per click (CPC), cost per mille (CPM), conversion rate, to determine which channels are more profitable, focusing on those to create even more effective campaigns.
In the previous paragraph we examined two KPIs that embrace two categories, namely finance and marketing. Now we would like to explore KPIs related to the customer and customer care.
Churn rate
The churn rate, or abandonment rate, is a marketing KPI that measures the frequency with which customers leave a product or service in a specific time range compared to the total number of customers who continue to use it.
The formula to calculate it is the following:
Churn rate = (no. of customers lost during a given period / total number of customers at the beginning of the period) * 100
What is a good strategy to improve it? In this case, all customer retention strategies come in handy. The first step is to understand the reasons that led customers to abandon a product or service. Then you should consider creating incentives and discounts, a loyalty program, or improve customer care, etc.
Customer Lifetime Value (CLV)
The analysis of the Customer Acquisition Cost must be combined with that of another marketing KPI, the customer lifetime value which returns the value produced by a customer for a company throughout its life cycle. To calculate it, you can apply this formula:
CLV = (Annual Profit Contribution X Average Time) – acquisition cost
There are different formulas used to calculate the CLV, depending on the variables taken into consideration. In this case we chose acquisition costs.
What is a good strategy to improve it? Also in this case, customer loyalty marketing strategies are useful to improve this KPI, for example by focusing on the user experience, or employing strategies such as discounts or coupons, etc.
The last category we want to examine is related to traditional marketing KPIs.
Gross rating point (GRP)
Web marketing has become the driving force of most marketing strategies and has countless advantages. One of them is that it can be measured more easily than the traditional one.
However, print ads, television and radio promotions, or billboards still have value, and many businesses continue to use these channels too.
One of the most important traditional marketing KPIs is the GRP, gross rating point, in other words the "pressure" an advertising campaign has on a specific audience.
How can you measure it? It is calculated by multiplying the campaign reach by the average frequency of exposure.
Marketing KPIs: conclusions
In this article we analysed only some of the most important marketing KPIs, we have seen how to measure them, how to improve them and which tools to use, but the list could be much longer.
In digital marketing, KPIs are powerful tools that allow you to precisely monitor the functioning of each campaign and to verify if it is bringing the desired results.
This is why, if you want to grow your business, it is essential to invest time and budget to stay constantly updated on this data.
FAQ
What are Marketing KPIs?
They are performance indicators that provide objective information on the efficiency of a company's marketing department. They can indicate return on investment, campaign effectiveness, lead generation, customer experience quality, etc.
What are the 4 main types of KPIs?
Some of the main KPIs are:
- Production KPIs
- Sales KPIs
- Financial KPIs
- Management control KPIs
- Customer KPIs
- Marketing KPIs
However, the KPIs that can be analysed are numerous and vary according to the type of company and the objectives that have been set.
Passionate freelance copywriter, with a niche in ecommerce and logistics. When collaborating with ShippyPro, she loves writing about trends, marketing and communication strategies to help brands gain an edge in an ever-evolving digital landscape.