Happy Friday! In this week’s episode:

• Let’s talk about marketing KPIs. Knowing what metrics to track is hard. We talk through why KPIs are important and give you a framework for choosing which KPIs are right for your business.

   

• A marketing lesson in a sketch. This one lives up to the old saying: a picture is worth a thousand words.
  

Off we go...

📈 Let’s talk about marketing KPIs.

You’ve been putting effort into your marketing strategy. We’re talking blood, sweat, and tears!

But here comes the big question…is it working? It can be hard to tell.

Marketing is made up of a lot of tactics like email, social, paid ads, and your website. Each tactic has a ton of metrics associated with it.

Before long, you can find yourself drowning in data and not sure where to focus.

So what's the solution? KPIs.

KPIs explained

KPI stands for key performance indicator. This is the most important metric that summarizes how something is performing.

You probably collect a ton of data. But a KPI boils all that data down to the most important thing.

So how do you decide which marketing KPIs to choose?

Well, KPIs aren’t one-size-fits-all. What works best for one business may not be right for you.

So we’ll explain how you should decide the most important marketing KPIs to track based on your company’s specific strategy. That way, you get the insights you need without any other noise.

But before we dive into that, there are a few KPIs that are important for virtually all marketing teams to track.

KPIs every marketing team should track

These three metrics should matter to you because they directly affect your company’s bottom line:

• Revenue

• Customer Acquisition Cost (CAC)

• Cost per Lead (CPL)

At the end of the day, every business needs to generate leads, convert those into customers, and make money doing it. So at the bare minimum, you need to keep your finger on the pulse of these three data points.

Beyond these is where things get interesting and you need to examine your marketing strategy to decide what other metrics are important to monitor.

How to pick additional KPIs

When done correctly, KPIs paint you a picture of how a person goes from having never heard of your brand to giving you their hard-earned cash.

To help you pick your KPIs, let’s break that customer journey down into bite-sized pieces.

How do people find you for the first time?

Start from the beginning of the customer journey. The key question to ask yourself is: how do people find us?

Think about the channels that you use to create awareness (e.g. SEO, ads, social, etc.). Then drill down into the best way(s) to measure these.

Some of the most popular options are:

1. Website Traffic – How many people are finding your website, and where are they coming from? What pages are they visiting? How long do they stay?

2. Keyword Rankings – Which pages are showing up in organic search results, and how many people see them?

3. Social Media Reach – How many people are you reaching with your social media content (paid or organic)? Which content is reaching more people and why? Which content is being shared the most and why?

4. Ad Reach – How many people are seeing your ads? How often are they seeing them? How many people click on your ads? How much are you paying for each click?

How do you generate leads?

Once someone knows you exist, the next step in their customer journey is signaling that they want to consume more of your content or hear from you again in some way.

It’s at this stage that someone becomes a lead.

Depending on your priorities, here are some common metrics to track:

1. Ad Conversion Rate – If your ads are designed to generate leads, how many leads are being generated? (Number of leads generated / total clicks * 100)

2. Form Fills/Subscribers – How many people complete a form when they visit your website or landing pages? Which forms convert the best? How many people are unsubscribing from your lists?

3. Followers – How many followers are you gaining on social media platforms? How many followers are you losing?

How do leads show purchase intent?

Once someone becomes a lead, one of two things happens: they continue to engage with your content or they fade off into the ether, never to be heard from again.

This process can happen quickly or can take a long time. It depends on the average length of your sales cycle. But, you want to be tracking things along the way so you know what’s working and what’s not. And so that you can confirm that your leads are moving toward purchasing from you.

Here are some of the most common ways to measure that:

1. Email Engagement Rate – How many subscribers continue to open and read emails? How many people click on links inside emails?

2. Demo/Trial Sign-Ups – How many free trial or demo sign-ups are you getting? How much does it cost you per sign-up?

3. Social Engagement (Organic & Paid) – How many comments, likes, shares, or saves are you getting? How many people click on ads focused on sales, free trials, or product promotions?

4. Product Page Visits – How many people are visiting product pages or other pages that demonstrate purchase intent?

How do prospects become customers?

Now for the elusive final stage: when a lead becomes a paying customer.

Here are some of the fan favorites for how to measure this stage:

1. Conversion Rate (Per Channel) – How many email subscribers become customers? How many demo sign-ups become customers? How many product page visits turn into a sale?

2. Return on Ad Spend (ROAS) – How much value is your advertising bringing into your business? (Total revenue generated from ads / total ad spend * 100)

3. Lifetime Value (LTV) – How much value does one customer typically bring into your company over the lifetime of your business relationship? (You should compare this to your CAC to see if the value you’re getting per customer is worth the cost of acquiring one.)

The final step

Once you’ve honed in on the KPIs you’re going to track, now you need to compile them all into a marketing scorecard (or dashboard if that’s the term you prefer).

If you’re a real pro, then find ways to automate as much of this reporting as possible. This will save you time and prevent data entry errors. The best way to automate your reporting is to have a clean and organized CRM. But, if that’s not realistic for you right now, then try to report on these manually every week.

Start to look for trends week over week and use these to find ways to improve your marketing strategy.

And always remember, your marketing scorecard is a living, breathing document. It’s not set in stone. If you’re collecting a KPI that you discover you never actually use, then take it off the scorecard. If you’re missing a key piece of info, add it to the scorecard.

At the end of the day, a scorecard is a tool that serves as headlights for your business. It helps you see when you’re moving in the right direction and when you’re veering off the path and need to make a course correction. Design it to work best for you.

📰 In the news this week

🍪 Inside Google's plan to kill the cookie.

👀 Insights to boost B2B ad performance on LinkedIn.

📞 Why ChatGPT and AI are taking over the cold call.

💰 Ad spend will grow more than expected this year.

🧠 Can neuroscience pump better creative into B2B marketing?

✏️ A marketing lesson in a sketch.

This cool sketch by Janis Ozolins is a great reminder to marketers to sell benefits, not features.

Leads care about the outcomes they will get from buying your product or service. What problem will they never have again? How will their life improve? What can they achieve with the time or resources you’ll save them?

They don’t care about all the nuanced features that are built into your product.

When you look at a painting, you appreciate the beauty of the final composition. You don’t get excited about the specific brand of brush or shade of paint that the artist used. Business is no different.

Show your work, not your tools. Sell your benefits, not your features.

😂 Marketing meme of the week

We love LinkedIn. It’s an amazing tool for B2B marketers and we’ve sung its praises in this newsletter many times. But hey, even we have to admit that LinkedIn can be majorly cringey a lot of the time.

Check out this hilarious video that explains why LinkedIn is so weird.

How'd we do with this week's newsletter?

• 😍 Loved it

• 😐 Meh, do better

• 👎 You didn't bring the heat 

A READERS REVIEW

Enjoy this newsletter? Forward it to a friend to spread the love.

Want us to write about something specific? Submit a topic or idea.