What Are The 5 Key Performance Indicators in Marketing

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From sports to academics, from cooking to manufacturing, every activity, however important or mundane, requires a set of indicators to determine if it is on the right track. These indicators are indispensable for the success of your efforts. For example, when you were a student, before exams you would set a timetable. This timetable had a number of indicators such as “no. of chapters every day” or “ study for how many hours every day” etc. These indicators helped you gauge your performance and achieve your goals. 

Similarly, when your mother cooks she continuously checks the state of food, its aroma, its colour etc, all these are indicators or rather Key Performance Indicators. Marketing is no different, here too certain indicators are necessary. Every aspect of business needs a bunch of Key Performance Indicators for its success.

KPIs for marketing

Marketing is so dynamic that you can not keep an eye on its every facet, you need a bunch of quantifiable metrics that can propel you towards success. With the help of key performance indicators, you can determine what is and what is not working for you and make a decision accordingly. 

There are a bunch of marketing KPIs that can help your marketing campaign such as website data, churn rate, impressions, customer acquisition etc. but we have shortlisted 5 marketing KPIs that every marketing campaign must have. 

5 Key Performance Indicators in Marketing

1. Return on Investment or ROI/Marketing ROI

If you are running a business you must be aware of the ratio of “return on investment” of every commercial undertaking, however large or small calculating its return on investment after a period of time and for marketing calculating ROI is equally important.

In the marketing domain, it simply means, how much extra revenue you generate due to a marketing campaign. You can easily calculate it by first subtracting marketing cost from the increase in revenue and then dividing the result by marketing cost. Now, what should be the ideal ROI would vary from business to business and from campaign to campaign but if the ROI is negative then there is little prudence in continuing with that marketing campaign. 

Similarly, ascertaining the proportion of the increase in revenue due to a particular marketing campaign is also very difficult and a firm will have to be extra careful while attributing an increase in revenue to a particular marketing campaign. ROI is the principal Key performance indicator and no marketing campaign can be truly called successful until it has generated the desired ROI.

2. Conversion rate

It basically means that you are able to get the audience to perform a desired action. Every marketing campaign that is done by a business is to achieve a particular thing, it could be an e-mail where the link to your website is given or it could be a paid ads campaign on Google search engine result pages.

Conversion rate basically means how many people who viewed your campaign performed the desired function. For example, if you have uploaded a video about your product on YouTube and have provided a link to your website in the description, the conversion rate would be the number of people who clicked the link compared to the number of people who watched the video. This key performance indicator is very easy to calculate as the data is easily available and even the calculation is very easy, but determining the appropriate conversion rate is the main hurdle. 

Different marketing campaigns may have different conversion rates and even the conversion may not always lead to sales. A firm needs to be very careful while analysing the conversion rates and determining the desired conversion rates.

3. Social media engagement

The importance of social media can not be described in words when it comes to digital marketing. No marketing campaign is complete without robust social media integration. Social media can allow a business to explode overnight if campaigns are run innovatively. Moreover, it is very easy to track actions done on social media, for example, you can track likes, comments, shares, tags etc. on your posts. Further social media allows you to initiate communication with your targeted customers in the comment section. 

If you are not analysing your social media activities you are doing your business a great disservice. Social media engagement must be a key performance indicator for all businesses no matter the scale. If nothing, social media works as a great feedback mechanism which allows you to take corrective actions for your product and services. Therefore all marketing campaigns must have a social media link.

4. Customer retention 

You would think that customer retention can not be part of marketing as marketing stops as soon as you have acquired a customer. This thinking is no longer sustainable as there are a large number of businesses specialising in similar products or services. What is the reason why a customer should stick with you and not go to your competitor?

Customer retention is, therefore, a top key performance indicator, as you try to retain a customer you learn more about the customer’s habits and practices, which in turn allows you to understand the needs of the customers better and helps you in changing and modifying your products and services. 

Moreover, customer retention helps you in developing marketing campaigns where the target is not to get new customers but to ensure you keep the ones you have. As a KPI customer retention can help you gauge the long-term viability of your marketing campaigns and indicate the changes as and when they are needed.

5. Lead generation

It is the paramount purpose of every marketing campaign, if you are not tracking leads your marketing campaign is most likely to go haywire. As a key performance indicator lead generation can be divided into two parts, which are marketing-qualified leads (MQL) and sales-qualified leads (SQL).

Marketing-qualified leads are those leads who want to engage with your company and it’s the job of the marketing department to ensure these leads are nurtured in a way that they become real prospects for the business. 

As a key performance indicator, marketing qualified leads can assist in gauging the proficiency of the marketing department and allow the sales teams to have a clearer picture of the number of prospects available for the business.

When a marketing-qualified lead is nurtured properly it turns into a sales-qualified lead. A sales-qualified lead is a prospect who is in contact with the sales team and could generate revenue for the firm.

As a key performance indicator sales-qualified lead can assist in analysing the sales being completed so that corrective steps can be taken and improvements can be made. Further, future failures of sales-qualified leads not turning into revenue can also be avoided.

Why key performance indicators are needed in marketing

In case you are still not sure why you need to set KPIs, here are a bunch of reasons that make setting up KPIs indispensable for the success of a marketing campaign:

1. Personnel appraisal

KPIs are set to measure the course of a process or an action, but essentially all KPIs measure the competence of personnel involved in setting up or undertaking those actions or processes. In this way, KPIs help determine the standard hours of work, compensation, bonus etc. 

Human resources is the most important resource of a business enterprise, and KPIs play a vital role in making it more efficient.

2. SWOT analysis

Every business must continuously forecast any opportunities and threats that may present themselves in the near future. Similarly, it should be aware of its strengths and weaknesses. KPIs in this regard ensure every aspect of a marketing campaign is being monitored and measured.

KPIs ensure awareness and forestall any predicaments in the path of a company.

3. Customer behaviour

Predicting customer behaviour is the most important aspect of a marketing campaign. You can set up key performance indicators to analyse the behaviour of the customers and ensure the appropriate change in your products and services. The simplest way of doing this is to send feedback links to your customers. 

Any firm that can predict the behaviour of a customer is likely to generate more revenue than if they fail to do it. Customer metrics thus are the most important KPIs for a business. 

Monitoring key performance indicators

Assuming you are convinced that KPIs are essential for driving up sales and revenue and for the success of any business. The next challenge is to track these KPIs efficiently and in real-time. 

In order to generate high marketing ROI you need a robust marketing dashboard, which can identify objectives with tasks and people so that corrective steps can be taken in real-time. There are plenty of marketing dashboards available in the market, if you need help in deciding which one to go for, Let our marketing experts at EMB guide you.


What are Key Performance Indicators (KPIs) in marketing?

Key Performance Indicators (KPIs) are measurable metrics that help marketers assess the effectiveness of their marketing efforts. These metrics provide valuable insights into how well a marketing campaign or strategy is performing and whether it aligns with the overall business goals.

Why are KPIs important in marketing?

KPIs are essential in marketing because they provide a quantifiable way to track progress and measure success. They help marketers make data-driven decisions, optimize their strategies, and allocate resources effectively. KPIs also enable businesses to gauge their return on investment (ROI) in marketing activities.

How can businesses determine which KPIs to focus on?

Businesses should select KPIs based on their specific goals and objectives. To determine the most relevant KPIs, it’s crucial to consider what you want to achieve with your marketing efforts. For example, if you aim to increase sales, focusing on Conversion Rate and ROI may be a priority. If you want to improve customer retention, CLV and Customer Satisfaction may be more relevant.

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