Every business has its own metrics for success. They are critical for communicating the defined “standards of excellence” across the board.
If you think about it for a minute, you probably have some Key Performance Indicators (KPI) in some form or fashion. Still, are you measuring what matters most to boost your bottom line?
KPIs are a company’s measurable goals that can be used as the foundation to track performances and analyse the effectiveness of its methodologies and strategies. Cost per Lead, Email Marketing Engagement Score, Keyword Performance, and Return on Engagement are just a few examples of data points that can be used to monitor and report on the health and effectiveness of your marketing initiatives.
KPIs should be determined at the top level and then filtered down into more specific goals for each team member in their related department to all be working toward a set of combined goals. For instance, the sales team will be focusing on KPIs related to the sales cycle, lead conversion ratios and estimated values to increase sales activity while finance will be focused on very specific numbers, such as DSO (daily sales outstanding) and GM (gross profit margin). When these two teams are working in conjunction, and are successful, the company will be more profitable.
In today’s post, we will highlight some of the popular KPIs that will help you “keep it simple”, and provide some great insights for consideration at your next management meeting. This short, but specific, list of KPIs touch on the value proposition aim to deliver to our clients. We believe that marketing should be developed using a holistic approach to obtain the highest return on investment.
The first indicator of this list is:
1. Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) metric measures how much a customer is going to spend or contribute to the top line revenue of the business. This metric is critical for any customer centric organisation. From this one number, you asses the thresholds for Cost of Acquisition, Retention, and Net Promoter Score.
2. Committed Visitor Index (CVI)
Committed Visitor Index metric is the percentage of visitors who engage with the content on site – those who read more than 1 page, or spend more than 1 minute on the site. This metric helps better define the visitor intent, especially when mapped to those visitors who engage in the predefined “Key Target Actions” of the engagement funnel.
3. Cost per Lead (CPL)
The Cost per Lead metric measures the cost-effectiveness of one or a combined set of campaigns as they result in generating new leads for a sales team. This may include both marketing and advertising dollars across both online and offline initiatives. This metric ties directly with other KPI metrics such as the Cost to Acquisition.
4. Keyword Performance
Keyword Performance metric measures keyword rankings specific to Search Engine Optimisation (SEO) efforts. This data is directly correlated to the organic website traffic drive by existing rankings or rank on new keywords that also coincides with content marketing tactics.
5. Email Marketing Engagement Score (EME)
The Email Marketing Engagement (EME) Score is a combination of multiple data points, including clicks, opens, conversions, unsubscribes, and target action engagement. The EME provides feedback on messaging and omni-channel influence overtime.
6. Return on Engagement (ROE)
The Return on Engagement metric measures the interactions of users with content generated by the brand. It calculates the expense of content marketing and advertising initiatives divided by a weighted score of interactions across social media, website traffic, and email engagement. Key ‘return’ components include “participation” (like, share, comments), “influence” (committed visitors), and “authority” (returning, loyalty engagement).
7. Leakage Ratio
The Leakage Ratio is the metric showing the number of customers “lost” in a given period relative to the number of new customers acquired. This data is effective when developing “winback” or customer nurturing strategies in place to minimise the rate at which customers churn.
8. Net Promoter Score
The Net Promoter Score is a simple metric measured by asking one simple question — “On a scale of one to ten, how likely is it that you would recommend [company] to a friend or colleague?” This data point gives a clear measure of the company’s performance through the customers’ eyes.