KPIs, or Key Performance Indicators, are measurable metrics used in marketing to track important campaign data. KPIs provide insights into areas that need improvement and help marketers understand how well their efforts are performing. They are tied to specific goals and objectives, such as increasing website traffic or generating more leads. KPIs have been around for decades, but with the rise of digital marketing, they have become even more important in making data-driven decisions.
History of KPIs
The origin of the term “Key Performance Indicator” is not attributed to a specific individual or company. However, the concept of using performance indicators to measure business performance dates back at least to the early 20th century. The Balanced Scorecard, a strategic management tool that incorporates KPIs, was introduced in the early 1990s by Robert Kaplan and David Norton. Since then, the use of KPIs has become widespread across various industries and fields, including marketing.
Top KPIs for Marketing
KPIs for marketing can vary depending on the specific goals and objectives of a marketing campaign or strategy. However, here are some of the most common KPIs that marketers track:
- Brand Awareness: Metrics that track how well-known a brand is among its target audiences, such as social media mentions, search volume, and brand recognition surveys.
- Conversion Rate: The percentage of visitors who take a desired action, such as making a purchase or filling out a form.
- Cost per Acquisition (CPA): The amount spent to acquire a new customer or lead.
- Cost per Click (CPC): The amount spent for each click on a pay-per-click (PPC) advertising campaign.
- Customer Lifetime Value (CLV): The total value a customer brings to a business over the course of their relationship.
- Engagement Metrics: Measures of how users interact with a website or social media content, such as time on site, bounce rate, click-through rate, and social media engagement.
- Net Promoter Score (NPS): A measure of customer loyalty and satisfaction.
- Return on Investment (ROI): The amount of revenue generated in relation to the amount spent on marketing.
- Social Media Reach: The number of people who see social media content, including likes, shares, and followers.
- Website Traffic: The number of visitors to a website.
Overall, the KPIs that matter most will depend on the marketing objectives of a business, and should be tailored to the specific goals of a marketing campaign or strategy.
How to Track KPIs
There are several ways to track KPIs, including:
- Analytics Tools: Use tools such as Google Analytics (*soon to be GA4) to track website traffic, user behavior, and conversions.
- CRM Software: Use Customer Relationship Management (CRM) software to track leads, customer behavior, and sales.
- Social Media Management Tools: Use tools like Hootsuite, Sprout Social, or Buffer to track social media metrics such as engagement, reach, and conversions.
- Email Marketing Software: Use email marketing software like Mailchimp or Constant Contact to track open rates, click-through rates, and conversions.
- Dashboard Tools: Use dashboard tools like Tableau or Klipfolio to visualize and track KPIs in real time.
- Spreadsheets: Use spreadsheets like Google Sheets or Excel to create and track KPIs manually.
- Custom-built Dashboards: Develop custom-built dashboards with the help of a developer to track KPIs specific to your business needs.
The best way to track KPIs will depend on your specific business needs, resources, and goals. It’s important to choose the right tools and methods that align with your overall marketing strategy and objectives.
KPIs are crucial to track marketing success. Common KPIs include conversion rate, ROI, and customer lifetime value. Data-driven decisions are made by tracking KPIs.
