KPI stands for Key Performance Indicator; it's a metric used to determine performance against business objectives.
And it's something marketers talk a lot about. Obviously, proving a tangible return on investment is important to the livelihood of every marketer. What business owner is going to continue investing in something when they're not even sure it's working?
But there's another reason to track KPIs – they're often the difference between results that are good and results that are amazing. Traditionally, marketing metrics have been notoriously difficult to monitor. Place an ad in a local magazine and you might notice a temporary spike in business. But how many of those leads were directly related to those ads?
While you can can obtain a rough idea by comparing sales averages to this time last year, you don't really know. There are also many other questions that won't be answered: How many people saw the ad and turned away? What part of the ad turned them off? How many of them were actively searching for your product or service? Where were they located? Are they a Mac-person or PC?
Tracking Marketing KPIs with Inbound
Imagine how much more targeted your campaigns would be if you had access to that kind of feedback? Enter inbound marketing – the practice of organically drawing customers to you by regularly publishing and distributing quality content online.
Unlike their traditional marketing counterparts, inbound offers an abundance of KPIs to choose from.
So much so, that the question has shifted from "How can we track KPIs?" to "Which KPIs should we track?" and "How do we act on them?" Technology is beautiful thing, but with more options come more questions.
According to Datapine, the data produced within any two days of 2014 was equivalent to the amount of data produced between the dawn of civilization and 2003. If that doesn't put the term "information overload" into perspective, I don't know what will. Today's marketers must be increasingly savvy about:
a). Which metrics they track and
b). How they act on those metrics
Because let's face it – tracking data without knowing what to do with it is about as useful as being gifted a lifetime supply of baked beans without access to a can-opener (assuming the droids have destroyed all kitchen appliances). For the remainder of this article, we'll review the most important KPIs to track and the corresponding actions you should be taking in relation to them.
Dividing KPIs Into 3 Categories
Begin by dividing your KPIs into 3 categories: Top of The Funnel (TOFU), Middle of The Funnel (MOFU) and Bottom of The Funnel (BOFU). While there will be some overlap in KPIs tracked (i.e. you track clickthrough rates for each phase), it's most useful to separate that data into organized categories.
Because that is precisely what will help you determine "what's broken" or "what could be better." Inbound marketing is about taking potential customers on a journey – a journey that appeals to their desire for either more education or entertainment around your niche. And that journey can be divided into 3 distinct phases: Awareness, Consideration and Decision.
These phases directly correspond with aforementioned funnel categories. The only difference between them? The funnel is how things look from the marketer's perspective and the journey is how things look from the prospect's perspective.
Key Marketing KPIs to Track
1. Content Groups
At the heart of every inbound campaign is the content published. Organize all of your marketing content into your 3 categories. It might look something like this:
TOFU: Social media posts, blog articles, initial CTAs
MOFU: Email newsletters, white paper downloads, eBook downloads
BOFU: Consultation sign-ups, lead nurturing email campaign sign-ups
If prospects are indifferent to your initial content, how are you going to get them in the door? And if they're not really feeling your MOFU content, how will you ever turn those leads into sales? Here are some content engagement metrics to track:
- Email Open Rates (regularly purge lists for accuracy)
- Email Clickthrough Rates (regularly purge lists for accuracy)
- Gated Content Conversion Rates (i.e. 5 percent of page visitors download your paper)
- Social Engagement Rates (i.e. you have 100 followers; 10 of them are actively engaging with your brand; your social engagement rate is 10 percent)
Note: When measuring social engagement, prioritize clickthroughs, reposts and shares over "likes." Both Twitter and Facebook provide in-depth reporting on clickthroughs.
Do you have competitors? Of course. But should you be competing against them? Not really. You should ultimately be competing against yourself. That means tracking KPIs that measure the progress of yourgoals.
For example, 50 white paper downloads may not sound like much. But if your previous gated content was downloaded 10 times, that's a pretty big deal. A 400 percent increase in conversions means you're doing something right. If that number becomes stagnant, and growth slows to a halt, you may want to revisit your Buyer Personas and ask yourself: How can we make this even more relevant?
Conversely, you may realize a large percentage of downloaders do become customers. And all you need are more visitors – time to work on distribution methods. Here are some self-growth metrics to track:
- Number of customers you now have over number you had this time last year
- Number of Website visitors you now have over this time last year
- Number of products sold per customer or per order
- Any of the engagement stats mentioned above
Bonus points for tracking self-growth in all stages of the funnel.
3. Conversion Rates
While tracking Website traffic is important, it's value is substantially increased when factored in with conversion rates. Case in point: Which Website is more successful? The one generating 10 leads per month from 500 visitors OR the one one generating 50 leads per month from 5,000 visitors.
The first one boasts a 2 percent conversion rate, while the second sits at 1 percent. Obviously, Business A would be ecstatic to have the traffic of Business B. But they're actually on track to surpass Business B if they continue working on distribution methods.
Measure conversion rates for all levels of the funnel visitors can interact with on your Website. If an offer is continually converting low, ask yourself the following:
- Is this offer appropriate for this stage of the funnel (i.e. buyer's journey)?
- Is our copy accurately speaking to the prospect's needs, wants and desires?
- Are we attracting enough visitors to generate an accurate conversion rate?
- Are visitors easily able to find our offer or is it buried?
Taking Action On KPIs
As you can see, tracking content engagement, conversion rates and self-growth can provide your team with a wealth of information to make better marketing decisions. The important part is to continually take action on the KPIs you choose to measure.
Knowing what actions to take is largely a mixture of logic and trial & error. But at the end of the day, it ALWAYS goes back to your customers. The better understanding you have of them, the more you will intuitively know what adjustments to make in terms of copy, design and promotional strategy.