Marketing is awesome, it spreads awareness about your brand, keeps new customers engaged and gets old customers to keep coming back to you. So, yes. Marketing is awesome. Marketing is super cool. But, the downside to marketing is that people don’t spend nearly enough time continuing their marketing efforts or they do not stop and see if their campaigns are doing as well as they thought. Reflection is key if you want your firm to grow with marketing. The marketing world is extremely dynamic and we need to regroup and evaluate our performance every now and then.
Data can be easily accessed and analyzed if we are using digital marketing as a way to promote our business. Since this is the case we need to identify what our key performance indicators are, how they impact our growth and how can we improve our marketing strategy by understanding these results. Here is a list of marketing KPIs that can prove to be useful to anybody interested in the growth of their firm:
The cost of customer acquisition – This is an easy figure to ascertain. Imagine you spent about Rs. 5000 on an ad campaign and got 10 new customers that month, your COCA = Rs. 500. So, that makes COCA = Total spend on marketing during a time frame divided by the number of customers you get in that time frame.
While this figure is easy to calculate, it may help you figure out what your marketing budget should look like in the next months depending on how many more customers you want. For example, if we take the previous example and say you want 20 new customers in a month your COCA would be Rs. 10000/-.
Post reach – As a company, your initial marketing objective may simply be to increase awareness. So, at this stage, your KPI could simply be the number of people who are viewing your post/product on social media. This is an easy one to track and optimize. Suppose a type of post isn’t doing well, pause, analyze and reflect on better strategies. See if certain types of posts are doing better than others and post the type of content more people are responding to. You could also work on using better tags and better formats to attract more attention to your post. Another strategy that may prove to be useful is to use fresh and inspiring personal content from everyday experiences to promote posts, personal posts have a lasting impact on readers and they connect with your story instantly. One more possibility is to ask your followers for questions, this will give you insight into the customers actual needs and this will help you engage with real audience.
The number of leads – Leads are your bread and butter. While building a brand your primary focus will always be to build leads. With an increase in leads, there is a potential to increase sales which would intern lead to an increase in revenues and profits and this is what companies strive to achieve. So, look at how many people have shown interest in purchasing your product/service in a given time frame and look at how you can effectively engage with leads to make them potential customers. A pro tip while measuring leads is to keep in mind that we need to focus more on where the number of leads are higher. For example, is Adwords giving me more revenue Vs. Facebook ads Vs. LinkedIn.
The number of leads that convert to actual customers- This is a good number to point out how effectively you are engaging with potential clients. This number will help measure the number of people who become customers through the marketing efforts. It will also give you an insight into how you can engage with leads more effectively in the future. This will also give significant insight into which channels are giving quality leads.
The lifetime value of our customers – This is a tough one to crack, but if done can really tell you if marketing efforts are going your way. You can calculate the lifetime value of a customer simply by multiplying revenue into the gross profit margin into the estimated number of repeat purchases.
Assume that you are a person that sells pens. A customer buys a set of 5 pens from us at the rate of Rs 10 each, we think that they will purchase a set of 5 pens every month this year. It costs us Rs 5 to manufacture each pen. Let us calculate the LTV here
Revenue = 5*10 = Rs 50/-
Gross profit margin = (50-25)/50 = 0.5 = 50%
Number of repeat sales = 12
So, the Lifetime Value of this customer = 50*0.5*12 = Rs 300/-
At this point access if the marketing efforts done to this client were worth it. You do not need to do away with the client fully, but can prioritize a different strategy for them.
Measuring the effectiveness and efficiency of campaigns can prove to be very helpful while trying to increase sales.
Marketing is a vital business function, so do not avoid assessing and evaluating results and reorganizing efforts.
Reference article – https://vtldesign.com/digital-marketing/16-marketing-kpis-to-measure/