I remember when I was a young and ambitious MBA student that whenever we presented a business plan or a go market strategy for university projects we focused on gimmicks and tricks to improve the coolness of our idea. However one of our professors, who I dearly love, said and I quote:
We are all in the business of making money!
However you can't, at all phases of your business's stage, see only your bank account and determine whether you are on the right track or not. Some marketing strategies will in fact take time to show any returns whatsoever. That being said throughout my experience and learning from other people's experiences I figured the metrics should actually be classified in two groups: Intangible KPIs, which are those number that don't directly interpret to revenue generated, and Tangible KPIs that can be directly tied to a sales order. Let's see what they are:
The more I fit into the my role as a digital marketer, the more I was under the spotlight of the administration and control management, so at some point we had to agree on a set of digital marketing KPIs to measure my performance. So I went on and on about increase in traffic, followers, engagement, improvements in user experience, and I saw the smile on the face of others in the meeting turn into confusion!
As said in the fight in the first Narnia movie "Number do not win the battle, but I bet they help". Well, it is true that more traffic doesn't mean more money! but it would definitely play a key role in making it. Actually the user experience of our website was a key reason for acquiring a big investment to our activities in managerial solutions.
Digital marketing went astray for a period with the boom of fake ads and empty promises that gave nerdy developers a chance for arbitrage. Meaning working on cheap keywords, creating cheap content to link to them, advertising and then selling the slightly more expensive keyword to make a dime! But digital marketing tools pivoted to a point that Dharmesh Shah, the co-founder of HubSpot, announced during the annual Inbound event in Boston in 2016, that it is not about the SEO or SEM anymore, but about HEO, Human Enjoyment Optimization. Meaning digital marketers who actually care about their audience and make sure they enjoy, prevail!
As a result: There are metrics that indicate how well your digital marketing team is performing that have an impact on your longer term marketing strategy, by building a more trustworthy brand. Here are the four top picks:
1. Traffic on the website
Your website and your blog are your virtual shop windows and as per the physical shops, the more window shoppers you have the more your brand would be appreciated as a provider of your certain type of service or product. But why traffic is important really? Once you create a piece of content on the web and you promote it, visitors start pouring in.
If the content is relevant and appealing to their needs they will keep on reading and this whole process signals the search engine that you have something to say on this topic and then you get the chance to rank higher than the competition. Since more people now search to find information before they purchase you need to be there when they do so. Website traffic couples with the SEO settings to give you a higher visibility on the search results. To brush your knowledge on this topic, I suggest you take a look at SEO basics in our blog.
2. Social Media followers and their engagement
Social media have changed how people find and consume content on the web. Therefore, metrics such as number of followers on different social media actually shows how your brand is perceived by your audience and how engaged they are with your brand. You need to make sure you have an upward trend on both the number of followers and their engagement. You can monitor this number using the analytics on each social channel or using integrated tools such as HubSpot Social media manager.
3. User experience
Your website appearance and it being user friendly positively enhances almost all other metrics, both tangible and intangible. Let's be frank, no one appears in a sales meeting with shorts and Hawaiian T-shirt! (unless you are in Hawaii and are selling yachts in the temperature of 40 degrees). So appear as presentable as possible on your virtual shop window to give the right impression.
Depending on your sector you might think of getting creative in your UX design, but the important thing is that the visitors who come your website for a reason should actually be able to find what they are looking for and enjoy while they are doing so.
4. Authority score
This is bit more technical and, in fact, accurately measurable, though it doesn't have a direct effect on your sales. Moz offers some of the best services in this regard by determining your domain wide and page average authority scores. Authority score as described by Moz is a score (on a 100-point scale) that predicts how well a website will rank on search engines.
And why is important!? The higher the authority score, the higher is the ranking chance on search engine, the higher traffic you get drive to your website and consequently the higher leads you can generate for your sales team.
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We are in the business of making money! So KPIs that actually translate in more sales are vital in digital marketing campaigns and to be honest are more appreciated by those in financial and administration departments! Here are the top picks:
1.Monthly qualified leads generated
This is a fundamental metric that both marketing and sales teams need to be aware of, work on and improve. First let's define what is a lead. In the world of digital marketing a lead is a visitor that shows interest in the content you have published to inform them and to promote your offering, by filling out a form and disclosing their demographic and contact information, or in other words "convert".
Not all leads can end up in being a customer and depending on the nature of your offering the leads might even tend to offer more fake information. But if you you are operating in a niche market targeted towards enterprises you will probably convert more relevant leads. This means even if what you are offering is to a large audience's appeal you will still get better quality leads if you target the right people with your content.
Whatever marketing software or CRM tool you use getting this metric is a piece of cake. Just refer to your software to see how many people converted within the period you want to know. If you are using HubSpot you are in luck since once you log in you see this on top of the dashboards as number of contact per period.
2. Marketing Originated Customer %
This ratio shows how much of your business is driven by marketing. All you need to do is to see how many customers you closed in a period and see if their first interaction with you started from your marketing content on the web. Again, different tools will help you do so, but manually calculating this number is not difficult, especially if you close few customer that pay big, which is common in IT companies that offer services and work on projects.
Consider that you can replace the number of customers with revenue and see how much money does your marketing team actually help make. The number may vary to be as low as 20% to 70% based on sector and the aggressiveness of the sales team.
3. Customer acquisition cost
This is a pretty comprehensive metric and in order to calculate it you should add up all you sales and marketing costs, advertising, commissions and bonuses and overhead costs in a certain period, and divide them by number of customers in that period. As a rule of thumb, if you just took off with a digital marketing strategy wait a bit until the pieces of your strategy click into place, maybe give it a 6 month period before you start calculating.
4. Marketing influenced customers %
Not all lead will be found via marketing and as it happens sales team will add leads to the mix. So to calculate the influence of marketing find which of your customers have been interacting with your marketing content that were NOT originally created by your marketing activities. Then divide the number by the total number of customers. This will plus-one the efforts of your sales team and indicate how well your lead nurturing side of your marketing campaign is performing.
The metrics mentioned in this article are top picks from the most common KPIs, nevertheless, there are endless possibilities on the KPIs to consider. You just need to identify what is important for your business and put in place the right method to calculate it. What you need to bear in mind however, is that you would need a tool that is able to collect different sorts of data to be used in your calculations. You might also decide to use a mix of tools, such as combining the data coming from HubSpot, Google Analytics and Search Console, MOZ, CRMs and ERPs, to have all the numbers you need.
KPIs are a vital part of any business. But did you know that to be able to track all the KPIs in your business, you need data from all across your company? We've developed a business model that can be applied by businesses based on our decade-long experience in various sectors. Download our FREE Three "I"s Playbook: IT Secrets Of A Profitable Business and build the successful business you always wanted!