Marketing is a key business function that requires good performance indicators to measure how successful it is. Here we look at how to find the most relevant and meaningful marketing KPIs that really matter to your company.
When it comes to marketing metrics it’s never one size fits all. The right metrics depend on your marketing goals and your business model. And those goals are different for each business. So, how do you find the KPIs that really matter to measure your marketing performance?
Align your KPIs with your marketing goals
Isn’t the goal of marketing to increase revenue? Ultimately, for commercial companies that might be the case, but there are many factors at play. For most businesses there are incremental steps that will help drive your organisation to achieve its goals. This might start with marketing campaigns that increase brand awareness alongside initiatives to increase conversions. The first step towards finding the most relevant KPIs is therefore to determine what key marketing goals you are planning to achieve.
The most common marketing objectives are to:
- Build brand awareness and thought leadership
- Generate leads and acquire customers
- Engage, add value and nurture customer relationships
Of course, some marketing activities can aim to achieve more than one of these goals. For example, a blog on your website might drive brand awareness and generate leads.
Once you are clear about your marketing goals you can then them to determine the right KPIs to help you measure your marketing performance.
Your goals might be to drive brand awareness by increasing traffic to your website. To measure the success, you would use your website analytics to understand the overall traffic to your website, which you might want to break down to compare traffic numbers week over week, month over month or year over year. You might also want to assess how long people stayed on your site or individual pages. This would help you determine your most and least popular pages and allow you to fine-tune the brand message on those pages.
If your goal was to generate leads and acquire new customers via your website, then you would measure how many of your visitors entered your sales funnel, e.g. went on to purchase something, signed up for further information or made an enquiry. As part of your lead generation assessment you want to get an indication of whether you are attracting the right people or not and how good you are at converting them into potential customers.
If your goal was to engage customers via your website, then you might look at measures such as number and percentage of returning visitors, time on site, number of pages viewed, minutes of videos watched as well as number of likes, shares and comments.
As you can see, the right KPIs very much depend on your goals and business model. When I work with companies or their marketing teams on developing KPIs we often start by clarifying the business model, especially as some of the most successful brands seem to shift from a buyer to a user model.
User versus buyer models
Some of today’s most successful companies now position their brands in the lives of their customers (user model) rather than just positioning their brands in the minds of their customers like traditional brands are accustomed to doing (buyer model). With this shift, marketing initiatives change and therefore the KPIs and marketing metrics you track follow suit.
Marketing priorities for a buyer model cosmetic company would be aimed at getting people to buy the product by handing out samples or having professionals provide makeovers with the product. The user model, embraced by brands like Sephora and Ulta, provide resources and training to help people use the product on their own when they get home and build a community of people who also use and love the products. The people in Sephora’s community often become avid advocates of the brand.
In the user model, what others says about your brand becomes very important in contrast to companies who use the buyer model and focus on what they say to customers. User model businesses such as Airbnb would put more effort into getting their clients to share reviews and personal experiences than a buyer-model company like Hilton.
Measuring B2B marketing
Many of my customers are in the business-to-business (B2B) space and want to know if the same principles apply. The answer is a resounding yes. In the same way companies market their products to consumer, B2B companies must market to their target audience and measure their marketing effectiveness in building brand awareness, acquiring prospects and leads and engaging customers.
For those who would like to learn more I have written more detailed posts on:
Or you can explore our KPI Library to find the right metrics to you.