How do you measure your marketing success with key performance indicators in your marketing plan?
“Half my advertising spend is wasted; the trouble is, I don’t know which half.” This quote is regularly attributed to either U.S. retail magnate John Wanamaker or to UK industrialist Lord Leverhulme. Despite the fact that this quote is over 100 years old, even in the 21st Century many businesses still struggle to understand whether their marketing activity is successful or not.
The reason that many businesses struggle to understand the effectiveness of their marketing is because they are not measuring its outcomes. To be successful in business it is essential to measure a range of aspects, both inside your business, such as productivity of your staff, efficiency of your systems, quality of delivery etc. and outside, such as the impact of your marketing tactics.
Measuring the success of your marketing efforts is essential for understanding what works and what doesn’t and where to invest your marketing budget. Key Performance Indicators (KPIs) are metrics that can be used to measure and track progress towards specific marketing goals. This success can then be compared to the original objectives of the marketing to assess its effectiveness and Return On Investment (ROI)
In this blog, we’ll explore how to measure the success of your marketing by using KPIs.
Before going into detail, the most important marketing KPIs that every business should have in place are to measure;
- the number of enquiries/ leads that you get;
- how they heard about you;
- what product or service are they interested in;
- and did they buy from you.
Every business, no matter its size, must record these measures. This simple information will tell you which marketing strategy generates the most leads, which one generates the most valuable leads and which ones have the highest conversion rates. With this information you can evaluate the ROI of each of your different strategies.
Define Your Marketing Goals
The first step in measuring your marketing success is to define your marketing goals. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART). For example, your goals might be to increase website traffic by 20%, generate 100 new leads per month, or increase sales by 10% over the next quarter.
The definition of marketing success highly depends upon what objectives you have identified for your marketing.
If for you, marketing is a process to generate brand and product awareness, then a rise in web traffic, social media likes, views, shares, and comments will be defined as marketing success. If for you, marketing is a process to acquire customers then your sign ups and conversion rates are going to matter more.
Every business owner and marketer will have a distinct understanding of marketing and thus, have different definitions of success But what we know for sure is that everyone wants their marketing to result in more sales and decreasing expenditure in the long run.
Identify Key Performance Indicators
Once you have defined your marketing goals, the next step is to identify the KPIs that will be used to measure progress towards those goals.
Some common marketing KPIs include:
- Website traffic: The number of visitors to your website
- Social Media Engagement: The number of likes, shares, comments on social media divided by the number of followers or impressions generated
- Lead generation: The number of new leads/ enquiries generated through marketing activities
- Conversion rate: The percentage of enquiries or visitors who take a desired action, such as filling out a form or making a purchase
- Sales revenue: The total revenue generated through marketing, ideally split by strategy efforts
- Customer acquisition cost: The cost of acquiring a new customer through marketing efforts
- Lifetime value of a customer: The anticipated revenue generated by one customer for the duration of their relationship with you (based on analysis of existing client data)
- Return on Investment (ROI): The revenue generated divided by the cost of each marketing activity
- Customer Retention: How long, on average, each customer remains a customer of your business
Set Benchmarks and Targets
Once you have identified your KPIs, the next step is to set benchmarks and targets for each metric. Benchmarks are the current levels of performance for each metric, while targets are the desired levels of performance. For example, if your current website traffic is 5,000 visitors per month, you might set a target of 6,000 visitors per month.
Track and Analyse Your Metrics
You must track and analyse your metrics continuously. This involves monitoring your KPIs over time and comparing them to your benchmarks and targets. This will help you to identify trends and patterns, as well as areas where you may need to make adjustments to your marketing strategies.
Make Data-Driven Decisions
Finally, it’s important to make data-driven decisions based on the insights you gain from your KPIs. Use the information you gather to adjust your marketing strategies, improve your campaigns, and optimise your marketing spend. By making data-driven decisions, you can improve your marketing performance and achieve your marketing goals more effectively.
In conclusion, measuring your marketing success with KPIs is essential for understanding what works and what doesn’t in your marketing plan. By following these steps, you can define your marketing goals, identify key performance indicators, set benchmarks and targets, track and analyse your metrics, and make data-driven decisions to improve your marketing performance. By doing so, you can achieve your marketing goals more effectively and maximise your return on investment.
If you’d like any more free advice, why not visit the ActionCoach NoLimits community platform where you’ll find lots of helpful videos, blogs and white papers. It’s free to join here The NoLimits Community by ActionCOACH (actioncoachnolimits.co.uk)
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