It’s all about the metrics, metrics, metrics… But just the right ones! We know by now that one size doesn’t fit all when it comes to measuring a business’ progress, because every organization is different! However, is this always true?
Of course, there are differences between a company and another, that’s what makes us survive in the market in the first place. But we also have many things in common, and one of them is the metrics we measure in each business.
That’s what we are going to talk about in this blog post. More specifically, we are going to focus on the 5 KPIs that every marketing team should measure!
We agree that it’s important to keep an eye on every aspect of the department, which would usually involve more than these 5 metrics. However, these can actually make a difference in your numbers! Isn’t that the goal?
Now more than ever, let’s focus on doing the best with what we have! It’s about time to boost those marketing departments and help them focus on getting back on their feet from inside out.
That being said, let’s learn more about Marketing KPIs and how to use them in your organization.
5 KPIs for Marketing teams
Before getting started with the 5 KPIs, you might also want to check out our blog about the 10 most useful KPIs for SaaS companies.
And now… let’s get started!
1. MARKETING QUALIFIED LEADS (MQL)
This is a very interesting KPI to help you measure more accurately your marketing efforts.
An MQL is someone that has shown interest in your business/product, but it’s not close to making a purchase.
The main difference with a SQL (Sales Qualified Lead) is that, in the latter one, the lead is one step closer to buying because it has interacted more with your company; for instance, requesting a demo or asking some questions.
In the Marketing Qualified Leads, on the other hand, the interest shown is more of an initial move. These are some examples that can help you recognize MQL:
- Downloading an ebook or white paper
- Subscribing to the newsletter
- Clicking on your ad
- Engaging with your brand on social media
- Numerous visits to your site in a short period of time
Apart from bringing potential leads to work with, this metric shows if your marketing initiatives are working!
This way, you can better target your MQL by adapting their behavior patterns into your mkt strategy. Give them more of what makes them like you!
2. RETURN ON AD SPEND (ROAS)
This KPI is focused on measuring your monetary efforts; this is, how much money you get back from the money you spent. This is a very easy calculation:
Revenue from Ad Spend / Ad Spend
However, the line is a bit blurry when it comes to determining that you are making a profit. Although this “success-standard” varies in every company, there are certain parameters that most companies fall into.
For instance, if you’re left with less than 400% of ROAS, you’re very likely losing money because your ads are not profitable. You not only have to take into account your ad cost, but also production, employees’ salaries, and any other expense you might have in your business.
Can you cover those with less than half of the initial investment? In the long-term, most probably not.
But, keep in mind that not every campaign is aimed at revenue. Some of your goals might be to build value among your community or to get subscribers to your newsletter.
Something that can help you get a more accurate insight into your marketing spend is calculating your ROI (Return on Investment).
This KPI is based on more than just your ad spends, including every other investment your company is making. This gives you a more detailed overview of where your money is going and how much you’re left with afterward.
3. COST PER CLIC (CPC)
This KPI can also be referred to as PPC (Pay per Clic). Also related to your ad spend, but this time more specific: how much it costs you every time your target audience clicks on your ad.
To make sure you get the best out of this interaction, it’s important to determine the CTA (Call to Action) of your ad before you launch it. After all, this will determine if your investment was profitable or not.
In this regard, again, you not only advertise to directly lead to a purchase. Imagine, for example, that you create an ad for your audience to download a white paper by registering their email address. But you’re not paying per registration, but for each time you get a click in your ad.
You can get very relevant information from this! If at the end of the day you’ve paid for 10 clicks, but only got 2 email addresses… Is that affordable?
In this case, you are getting the clicks, which means the audience is interested to some extent in what you have to offer! Therefore, you might want to reconsider the topic of your white paper. Maybe there’s something else they’d rather read about!
To calculate your CPC or PPC, this is the formula that you’ll be using:
Total cost of the ad / Total Clicks
Due to its popularity in the mkt departments, many platforms offer what’s called a “maximum bid” for advertisers. This means that you, as an organization wanting to advertise, can choose a maximum budget to spend on it regardless of the clicks it gets.
Moreover, take into account that the cost you’ll be charged per click is also determined by the competition there is on the platform. Yes, that’s how auctions work! So keep in mind that you won’t be determining the cost, at all…
4. CLICK-THROUGH RATE (CTR)
This KPI gives you an accurate overview of the clicks your ad gets from the total audience seeing it. Therefore, a high CTR means that a high number of people seeing your ad are actually clicking on it. And that’s a great job!
This is the formula to calculate it:
Total clicks on the Ad / Total impressions
However, a high CTR is not always positive. It can also mean that some of the keywords you are using are priced too high, so you might want to reconsider how relevant they are for you.
This means that you should focus on those keywords that are relevant; this is, related to your overall communication. Why would you be paying for a keyword that barely appears on your website?
The second condition for the keywords to make your ads profitable is, surprise, they have to be affordable. This means they shouldn’t go against your content, so exclude all those words that could be counterproductive.
Apart from the numbers, this KPI can bring you some interesting learnings. As we’ve seen, a high CTR most likely means people like your ad and, therefore, decide to click on it.
This is not only because of what you offer but also the design, format, platform, etc. All these factors are giving you very relevant information about your audience’s behavior with your brand/product!
Remember, use your resources to its fullest potential - and keep on learning from them!
5. CONVERSION RATE
This is related to the specific goals you have defined for your website or app. The KPI will show you how many people have completed that goal compared to the total visitors to your site.
Therefore, a conversion varies from business to business. It can be, for instance, getting your audience to click on the “know more” button, subscribe to the newsletter, download a file, or book a demo.
Usually, you will measure as conversion those goals that actually can make a difference in your performance. For example, you wouldn’t want to measure how many of your visitors visit the “meet the team” section in your site, because how does that translate to performance?
As you can tell, this KPI depends almost entirely on your persuasion to reach a conversion. Good news, you can improve the process!
In fact, improving your conversions is called Conversion Rate Optimization (CRO), and it’s done by… trial and error!
Basically, you formulate some hypotheses regarding the audience behavior with these conversions, and then you test how to increase the rate by what’s called A/B test. You create two versions of the same page and test them against each other with your audience to have real insight into the reasons for the conversion.
Integrate with Plecto
You can display these KPIs, and many more, on Plecto dashboard to get a real-time overview of your progress towards your goals. You just have to integrate your data sources into Plecto, and it will do the rest!
Choose your widgets, create personalized notifications, and gamify your KPIs on Plecto!