Monitoring the different aspects of your business is the best way to help it thrive. Marketing key performance metrics (KPIs) are essential to help you analyze the data about what you are doing right and where you are going wrong with your marketing efforts.
KPIs indicate whether you are reaching your goals and how much your efforts are paying off. The advantage these metrics offer includes being able to change things if necessary to create a better strategy.
There are several metrics to help you keep your business data in check. However, marketers narrow them down to some important ones. These include cost per lead, sales revenue, converted leads, customer retention, types of website visitors, organic traffic, bounce rates, conversion rates, and social media reach.
Small businesses cannot possibly monitor all these KPIs, so here are three essential ones to track:
1. Better Brand Awareness
When your consumers recognize you, it is called brand awareness. Some ways to measure brand awareness include surveys, website traffic, search volume data, and social media reach.
Surveys are easy to conduct via email or your website, where you essentially want to find out how aware random people are of your brand or how existing customers heard about you.
Google Analytics is the right place to look when measuring direct website traffic to give you a better idea of developments in brand awareness. Check volume searches for your brand on Google Trends to measure your marketing effectiveness in creating brand name awareness.
Social media built-in analytics can help you to understand your follower reach, growth, engagement, etc.
2. Cost of Lead Acquisitions
Business marketing is not cheap, so you will want to know the cost of lead acquisitions to understand the effectiveness of your marketing. In addition, some campaigns have higher potential conversion rates, and you will want to know which campaigns these were. Of course, the ultimate is to bring in more leads with less money, but it doesn’t always work that way.
You need to divide the total cost of a campaign by the number of leads it generates to see how much you paid per lead.
Using your CRM software’s tracking goals is the best way to track costs per lead. By establishing the campaign goals from the start, the software does everything automatically.
Furthermore, remember that the closer you keep your campaign to the right audiences, the better the interaction becomes, meaning a lower cost of lead acquisitions.
3. Converting Leads to Customers
You might want to measure which leads are coming to your site, giving you their information, and performing other actions. As a KPI, this gives you a good idea if you have targeted the correct audiences.
However, the third most important KPI for your small business is which ones moved the furthest along the sales funnel to becoming a client. Following the customer conversion rate can give you invaluable insights, depending on your industry and the channels used.
For example, suppose you own an eCommerce store; you can divide your new customers by the number of site visitors for a specific period to measure the customer conversion rate. Otherwise, if you recently optimized your landing page with a lead magnet for one of your new products, then divide the number of successful leads by the number of page visitors to measure your conversion rates.
Therefore, customer conversion rates help you understand at what point in the sales funnel you are turning leads into customers or where you are losing them. In addition, the data from these KPIs can help you refine your marketing strategies by working on the weaker areas and building up further on those offering the best results.
Remember that product quality/ market fit is as crucial as getting suitable types of leads. In some instances, your sales processes could also require scrutinizing.
Besides doing an overall calculation of your website for this KPI, you also need to see segmented rates from the other channels you use to determine which offers the most conversions. Use this knowledge about your conversion rate to boost your most robust channels.
Measure your customer conversion rates by dividing the conversions generated by the total number of website visitors.
Measuring your marketing KPIs and focusing on the right metrics is the best way to ensure you reach your business goals and validate your spending. In addition, they allow you to understand several things about your audience and to use that knowledge to tweak your campaigns. Furthermore, as you nurture your business growth, you may want to add more KPIs, but most small businesses should stick with the most important.
What are some of the most important marketing KPIs for small businesses?
Small businesses’ most critical marketing KPIs include engagement rate, cost per lead, and customer conversion rate. Engagement rate helps you understand how well your content is performing, cost per lead helps you track the effectiveness of your campaigns, and customer conversion rate helps you understand how many leads are becoming customers. By tracking these KPIs, you can fine-tune your marketing strategies more effectively.
How can I measure my customer conversion rate?
Customer conversion rate can be measured by dividing the conversions generated by the total number of website visitors. This will give you a good idea of how many leads are becoming customers.
What is a good engagement rate?
A good engagement rate depends on your industry and what your goals are. However, a general rule of thumb is that an engagement rate of 2% or higher is considered good.
What is a good cost per lead?
Again, a reasonable cost per lead depends on your industry and goals. However, a general guideline is that a cost per lead of $50 or less is considered good.
By tracking these KPIs, you can fine-tune your marketing strategies more effectively.