Why Key Performance Indicators Matter
Looking for help when it comes to developing an effective marketing plan for your business?
As a small or medium-sized business owner, keeping perspective, knowing your strengths and weaknesses and understanding that there is always room for improvement, is vital to your success.
It’s important to have goals, but it’s equally important to know if – and when – you’re achieving them. This is where key performance indicators (KPIs) can be a game-changer.
What Are Key Performance Indicators?
Let’s get down to the basics.
Key performance indicators (KPIs) are specific metrics or measurable values that allow you to steer your marketing and advertising efforts in the right direction. This is done by giving you a clear perspective on how your efforts are performing.
Which KPIs Should I Track?
The answer here is essentially your golden ticket to victory; there are ten key performance Indicators that can measure your success both online and off.
Your revenue is the most direct link to your ROI, each marketing effort you initiate will relate back to your revenue. If you begin to notice a decline in your sales, it may be a sign to re-evaluate your strategy. With marketing attribution from the DRMG Insight platform, you will be able to have a clear view of what channels are your top revenue drivers.
The prospects you gain are what will inevitably drive sales. Keeping track of how many leads your company gains is only one part of the equation, maintaining a scoring system is the next. Review your leads through DRMG Insight and begin to score what channels capture great leads and what channels may be collecting poor quality leads.
Cost Per Lead
Now that you have captured new leads and have your finger on your revenue for each marketing platform, it is now time to review what the overall cost was to acquire each lead. To calculate your cost per lead divide your marketing spend by the total number of leads received for each channel. Each industry has there own set of standards for a CPL, become familiar with your industries average in order to set your benchmark.
Lifetime Customer Value
Not all customers are created equal. More time than not, it is more effective to retain existing clients, than to acquire new ones. The lifetime value of your customers can be determined by the following steps:
- Determine the total gross margin you anticipate from that customer over the relationship lifetime
- Decide what percentage of that margin you need to invest in retaining them. This value should ultimately be 3x the cost of acquiring new clients.
Cost of Customer Acquisition
Establishing your cost per customer acquisition will elevate your marketing strategy. Once you have determined this cost, your marketing budgets moving forward will be directly impacted. To discover your CAC, divide the cost of sales and marketing by the number of new clients acquired during the set duration.
Lead to Customer Ratio
Understanding how many of your leads are transitioning to closed sales is an important part in determining if there is a break down between sales and marketing. With DRMG Insight you would be able to see the slide in lead volume before it escalates and make adjustments to resolve it.
With your marketing campaigns, you will likely see an increase in your overall website traffic. Reviewing metrics such as time on page, bounce rates and conversions in relation to this increase in traffic will help you determine what steps are necessary to turn your traffic into leads. Pay attention to your website forms, CTA’s and button colours.
Sales Response Time
Studies prove that a lead will be more likely to convert if contact has been made within the first hour of their initial request. A slow response time will allow your prospects to explore different options and could lead to the loss of a sale to your competitors.
The volume of calls that a particular channel and campaign are able to acquire will allow you to evaluate the success of these campaigns. A call tracking number can be applied to both a digital and print campaign. Through your performance tracking software, you will be able to then listen to each call and score the quality of your leads.
Landing Page Conversions
Whether you are advertising through print or digital, creating a landing page to capture leads is a key component of a successful campaign. Similar to your website traffic, evaluating the amount leads your landing page has acquired in relation you the amount of traffic to your landing page will result in the overall conversion rate of your page. Try A/B testing components of your landing page in order to optimize your conversions further.
Why Do They Matter?
No business owner wants to support marketing efforts that are throwing money down the drain; a high ROI is the ultimate dream.
By tracking your KPIs, you can be ‘smart’ with your money. This insight is invaluable since it allows you to make adjustments to existing strategies and budgets.
Is there anything else out there, to give my marketing efforts more of a ‘boost’?
Absolutely; our proprietary software, DRMG Insight will give you an extra enhancement that other companies are lacking. By monitoring your performance metrics and tracking your campaign conversions in real time, you’ll have the ultimate competitive advantage that you’ve been looking for.
You will also be able to understand the impact of your print and digital advertising efforts, and how a healthy ROI can be obtained for continued campaign growth and success.
Need further help when it comes to reaching your marketing goals or steering your company’s sales and ROI in the right direction? Contact DRMG today.