Actionable Data-driven Strategies to Improve your Marketing
What makes your company’s marketing efforts a success? How do you measure your business’ marketing performance? Is your marketing strategy effectively growing your business? Do you understand why your company is doing well or not doing so well? Understanding what is and what isn’t working in marketing all comes down to your marketing’s Key Performance Indicators (KPIs) and should be an imperative part of your business’ growth strategy. As a crucial part of all business-making decisions, KPIs are key to tracking your marketing efforts and to see how well your marketing strategy is doing in achieving your business objectives.
“But how do I get started” you might ask? Technological tools offer marketers a wide range of options to help track your metrics. Businesses have more access to data than ever before, yet understanding what information matters most to your business can be challenging. Marketers need a robust KPI strategy to help them pinpoint what’s helping their company succeed and what is dragging it down.
Identify your KPIs
The most instinctive way to measure your marketing, ‘Return on Investment’ (ROI) involves tracking metrics that tie directly to revenue and profit. Every metric plays a role, and dependent on your business goal, some might be more important than the return in dollar signs. However, when it comes to producing results for clients, the bottom line is, your marketing strategy needs to make a profit. So, what are the key metrics you should focus on?
There are two distinguishing categories of metrics you will see:
These are numbers and statistics that look good on paper, but don’t usually translate into anything tangible that can improve your business and sales. These are quantitative values such as the number of visitors, subscribers, and followers.
Even if your metrics for impressions, followers, reach, and likes are very high in quantity, it does not equate to quality. The metrics you should be looking for are actionable, that lead towards a decision and help increase your ROI. For example, cart transactions, referral traffic, and conversion rates.
We can segment the major KPI’S into four groups:
We can segment the major KPI’S into four groups:
Recommended KPIs to Track
As you can see, there are plenty of different metrics you can choose to track, but when it comes to a return on your investment your metrics need to contribute to the decision-making process. Here are some of our recommended KPIs you should focus on:
- Customer Lifetime Value (CLV): What the average sales amount would be for each acquired customer for a month, the quarter, year, 3 years, 5 years…. Dependent on your product or service.
- Cost Per Lead (CPL): How many inquires are being produced versus the cost of your campaign. i.e. You spend $3000/month, and in a month, you receive 20 inquiries through an AdWords campaign. $3000/20 = $150/lead.
- Cost Per Acquisition (CPA): Out of all leads generated, the percentage that made a purchase. CPA shows how much it costs for you to acquire a sale.
- Website Engagement: Properly tracking and measuring your website engagement is an important contributor to improving your ROI. If your website is optimized for the best user experience, it will encourage people to convert or act on your page. (Check out our CRO article for more tips)
- Total # of visits
- # of Unique visitor’s vs number of return visitors: You can identify if a campaign is generating new opportunities and gaining reach. It also speaks to the relevancy of the information you provide.
- Time Spent on Site and Pages: This helps you identify user experience issues. It can also determine if your campaigns are targeting the right audience. For example, if people spend very little time on your page, you might have to rework your ads to re-target a new audience who might be more relevant to your brand and product.
- Bounce Rate: The percentage of people who visit one page on your site and leave. Bounce rate is important to consider, for example, if you have a very high bounce rate your page might not be getting quality traffic.
- Traffic Sources: Understanding where your traffic is coming from is key to optimizing your digital strategy to bring in the best returns in quality leads. You can find visitors coming from several locations.
- Organic: Visitors that find you through searching by entering a specific set of keywords.
- Direct: Visitors that directly enter your URL into their browser.
- Referral: Visitors that have clicked your URL through another website.
- Social Media: Traffic coming in through your social media channels.
- Mobile Device Tracking: Everyone has a smartphone today, which means knowing your mobile metrics can mean the difference between a positive ROI and losing money on your campaign. Consider these four things when tracking your mobile metrics:
- What percent of your traffic is mobile?
- What devices and browsers do they use?
- Where are they coming from?
- What kind of content are they consuming on your page?
Best Practices to Prove your Digital Marketing ROI
You have the data, now how can you package it to your clients, investors or boss and show them that there is value being returned from your marketing strategy?
Connect performance data to your business outcomes
Your marketing value to an organization isn’t based on your Facebook likes, or any vanity metric. To show that there is a value returned, you must link the data and analytics you’ve collected with the business outcomes they’ve triggered or contributed to. For example, these outcomes could include increasing revenue through customer acquisition and growth.
Understand the difference between goals and KPIs
Goals are the outcomes you want to achieve, your overall ‘business objectives.’ For example, your organizations goal might be to increase your revenue and grow your business. KPIs are the key metrics you use to determine whether you’re making progress towards that goal.
For example, if you want to grow your following in a year to 40,000 subscribers your goal would be to reach 40,000, so you might run a campaign to help you gain 4,000 new subscribers. Your KPI is the number of subscribers you progressively gain through campaigns to help you reach your end objective.
Leading vs Lagging Metrics
Lagging metrics: This is a metric that comes post-marketing campaign. They are the long-term results and could include things such as revenue influenced by marketing activities, closed business, lead volume and lead conversions.
Leading metrics: This metric helps predict a business outcome and is usually more difficult to measure in contrast to lagging metrics. It is considered your business driver, and a marker of progress towards your KPIs. This can include metrics around social media engagement, website traffic or key form conversions. These are the metrics you can optimize regularly to help you reach your goals.
Convince stakeholders which metrics have the most value
Convincing your marketing organization to become more revenue-driven may require a shift in marketing culture and top-down influence. When vanity metrics are so readily available and sound great on paper it can be hard to convince your team to make the switch. However, in the long-run, securing future marketing budgets from your CEO, CFO and executives will be easier when they understand how their investment translates to profit. Work to highlight your digital marketing ROI metrics to show your organization the value the marketing team is providing to the overall business.
To find out more about what key metrics you should focus on to improve your strategies, get in touch with our marketing team by emailing firstname.lastname@example.org