We understand that your underlying Key Performance Indicator (KPI) for marketing is your Return On Investment(ROI). As a business owner, we are aware of the importance of making sure your marketing is working and is growing your business. Each individual campaign should be able to illustrate the return in sales that it is bringing your business. This is essential to your business, however with so many reporting tools, so many businesses claiming to provide an 80x ROI it can often get lost in the mirage of information available.
You should evaluate each marketing activities ROI, for instance, the cost of email and the return on email. Your paid advertising is the easiest marketing to measure as it provides exact measurements in their dashboards, of spend and returns, through both Google’s paid advertising and social media paid advertising. Online there are hundreds of applications that can help measure your ROI and success across different channels.
Deciding The KPI For You
When deciding on the KPI’s that you believe are relevant to you, a method that is often overlooked is to first understand what your goals are. This could be specific goals for the year and it could be goals that are seasonal and goals that you create throughout the trading year. By working backwards from your goals you can clearly understand what it is that you need to do in order to reach said goal and what can areas you should measure in order to track the success of the goal.
For example, should your goal be to boost sales 25% in the next six months, you should consider tracking daily sales, conversion rates, and site traffic. This goal may illustrate that conversion rate is a particularly weak area of your business if you were to then decide that you wanted to improve that as a long-term goal, you should look at measuring metrics specific to conversion rate optimisation. These would be shopping cart abandonment, competitive price trends and importantly still conversion rates.
Your website provides the best opportunity to capitalise on sales opportunities, a common marketing goal is to grow site traffic x% in the next year. To successfully achieve and measure this objective it is important to specifically look at a KPI such as site traffic, traffic sources, promotional CTR’s for any more information on CTR’s have a look at our blog. Social shares can also be a good indicator if you seeing an increase in traffic sources from social media. However, if you are pushing your marketing but not always in a relevant and engaging way you may notice an increase in your bounce rate, so it is important to track bounce rate.
Therefore, your KPI’s should be chosen as a result of your goals, working backwards from your goals to fully understand and exploit the potential in your campaign and maximise your return on investment.
As an eCommerce business shopping cart abandonment is probably one of your most frustrating lost opportunities, they could have come to site as an ideal customer, but at the last minute left. Although these are frustrating by correctly measuring the % of cart abandonment you have the opportunity to understand which products have a higher rate. By understanding cart abandonment you can crossover with your paid advertising by remarketing your products to these specific visitors. By measuring and interpreting this data you can open new opportunities to grow sales.
If Social Media contributes to a large part of your business there are hundreds of vanity metrics, it is important to focus on the KPI that will help you with your underlying aims and objectives. The vanity metrics can help to understand the more important results that social media brings. Sharing although may not have a direct impact on your revenue can help confirm how much engagement you are receiving. If you are taking part in activities that aim to help grow your followers or client base then look at follower growth, however, in the early days of social media, it was easy to buy fake followers.
Your key performance indicators are exactly what they say on the tin, and you should understand which measurements matter to you. Section your metrics into marketing components, such as your website performance, social media, email etc. We recommend analysing your performance in 2016 to individual months to understand which months were your best and worst, this can help create the strategy for 2017.
There are 7 marketing metrics that are essential to measure around different elements of your marketing that you should compile in your KPI. We have created a handy eBook that you can download right here that will allow you to make 2017 your best year yet. By using these 7 metrics alongside your KPI’s you will be able to understand the metrics that matter when it comes to growing your business.
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