As 21st century marketers, we’re required to constantly make adjustments to strategies and budgets in order to keep up to date with the latest development in online business.
And now, with the rise of inbound marketing, Key Performance Indicators (KPIs) must be looked at from a new perspective in order to figure out whether or not all the time you’ve spent on that blog post or newsletter is actually seeing a return. Because at the end of the day, the goal of any marketing team is simple: to bring in more customers to the business and generate a positive ROI.
In order to do so, you have to be able to manage and track the KPIs that are associated with each and every campaign. Using the wrong KPIs (or not using them at all) can lead to your company misreporting data, thereby acting on decisions that are made based off of misleading information.
Below are 6 KPIs that today’s marketers should be focusing on. These KPIs reflect the evolving landscape of online marketing. While some KPIs, like sales revenue, will always be there, others are new and thus reflect the inbound marketing strategies that have become commonplace.
1. Sales Revenue
Did your inbound marketing campaigns for the year generate sales revenue? Did those blog posts, newsletters, and Youtube videos actually gain your business any money? An understanding of the sales revenue that’s generated through these activities is absolutely essential if you want to have the ability to measure the success of each campaign.
- Sales Revenue = (Total sales for year) – (Total revenue from customers acquired through inbound marketing efforts)
2. Customer Value (a function of the customers’ level of satisfaction)
The use of inbound marketing tactics gives you the benefit of being able to reach out to your current customers through direct and personal channels, including email or social media accounts. This helps reduce churn rates and maximize your customers’ lifetime value.
By reaching out more and being in constant contact (while providing value), you’re also increasing their level of satisfaction, which increases their lifetime value, and creates a repeating pattern.
- Customer’s lifetime value = (Average sales per customer) x (average number of times the customer buys per year) x (Average retention time in months or years for a typical customer)
3. Traffic to Lead Ratio
You should constantly be measuring the amount of traffic that is being driven to your website from your inbound marketing campaigns as a whole.
But knowing this number isn’t enough, because while generating traffic is always good, the ultimate goal of generating traffic is to produce new leads. Generally, a lead is considered to be someone who’s shared their contact details with you, indicating that they’re interested in your product, service, and content, and they’d like to hear from you again. You can use on-page analytics tools to easily measure the ratio of traffic that’s being converted into leads during a given period.
4. Lead to Customer Ratio
The lead to customer KPI shows you exactly how many leads your sales team is able to convert into paying customers. Generating leads through your inbound marketing efforts is great and all, but if these leads aren’t being converted down the funnel into paying customers, then the majority of the effort you’re putting in to capture those leads is essentially worthless.
Always maintain the goal of having a high lead to customer ratio in mind when you’re planning any new inbound marketing campaigns.
5. Organic Searches
The amount of traffic that’s coming from organic searches is directly correlated to your company’s search engine optimization strategies. While this is a constantly evolving field of study (Google comes out with search engine algorithm updates multiple times per year), a known fact is that the more useful the content you’re distributing online is, the higher you’ll rank in the search engine results pages (SERPs), and the more traffic you’ll generate through organic search.
Use Google Analytics and other tools to see the amount of traffic that is being generated from organic searches. Always work to tweak and optimize pages of your website that are seeing traffic and engagement.
6. Social Media Reach
Social media has become a staple of inbound marketing strategy. It allows you an easy way to engage and share content with your users and audiences at large. It’s certainly a more novel marketing KPI, and one that can no longer be ignored.
You can measure your social media reach by including factors like likes, favorites, comments, retweets, shares, and so much more. Clearly it depends on the platform, but you should always keep tallies on how your social media campaigns are bringing in more business to your company.
Here are some metrics you can use to show the impact of your social media marketing efforts:
- Percentage of traffic being driven from social media channels
- Number of leads generated from social media channels
- Number of customers generated from social media channels
Inbound marketing is different from traditional marketing methods, and the KPIs should therefore be treated as such. Always keep your company’s bottom-line in the back of your mind, and make sure that any campaigns you’re spending time on are worthwhile in the long run.
Author Bio: Danny is a content writer and editor for DiscoverCloud.com. After working a great many odd-jobs, including, but not limited to: editing, fitness training, window washing, and valeting, he has finally found solace in writing marketing strategies, tools, and tips for online business.