Traditionally marketing was done by putting an ad in the newspaper, posting a billboard on a highway, attending and presenting at a tradeshow or by mailing a nice piece into someone’s mailbox. You really did not know how successful you were at your marketing other than to say I had 2 customers from newspaper because they mentioned it. Now all that has changed. Your digital marketing consists of ads are either displayed as a banner ad, are search ads which is run by Google or Bing or are Social Media platforms such as Twitter or Facebook. You also SEO your website to be ranked higher on Google. And communication with prospects and customers via email.
There are a few simple marketing KPIs (Key Performance Indicators) that can help you improve your marketing results.
- Total Sales By Source – Understanding where your sales are coming from lets you focus on those sources. To measure the source, make sure you set up conversion tracking on your Google Analytics or other website tracking tool. If you are using marketing automation tool make sure you record all your sources of data.
- Cost Per Conversion or Cost Per Acquisition (CPA) – Conversion can be defined as a form submit for B2B Business or a Sales for B2C customers. To calculate the CPA, you would divide number of conversions by total cost of the campaign. This metric will allow you to scale your business without increasing cost.
- Return on Investment – Combining the total sales and total spent per each marketing campaign or source gives you the return on your marketing spent. The calculation is simple: (Total Sales –Marketing Spent)/Marketing Spent. Do not forget that some sources and campaigns may not cost much to execute but do require a lot of time so make sure you allocate that to each campaign or source. This metric can help you optimize campaigns and sources by eliminating the worst performing and increasing spent on the best performing campaigns or sources.
These are just some of the metrics that can help you understand and improve your marketing. You can see the trend by measuring the same KPIs overtime on a weekly or monthly basis as well as doing deep dive analysis per source to help you get more granular information. If marketing analytics are done well, they can not only improve sales but also decrease time. It is a good idea to invest in a good marketing analytics strategy by either implementing automatic reporting using a business intelligence tool, hiring an analyst full time or outsourcing your analytics.