KPI stands for Key Performance Indicators. What does that mean? In short, what you should measure to determine if you are on track to hit your goals. Without goals and KPIs, you are flying blind in all of your marketing efforts.
And by flying blind, I mean wasting money. You can’t understand if something is successful without measuring it.
So what do you measure, and how? Easy. It all depends on your goals.
The wildly important goal for most marketing teams is to increase sales qualified leads and drive more revenue. If those goals resonate with you, these are the KPIs your team should be marketing.
Visitor to Lead Conversion Rate (VTL)
You could be bringing in all of the world’s traffic, but what good does that do you if you aren’t converting visitors into leads? If you have a built-out inbound marketing strategy, you should have something in the funnel for a visitor to convert on. A conversion could be as simple as a blog subscription. In my opinion, all you need is a person’s email address to count them as a lead, because now, you can use that information to keep in touch with them and keep your brand in front of them.
To track visitor to lead rate, you simply divide the numbers of leads in a given period by the number of visits to your website or a specific page. I would look at tracking this rate for your website as a whole, but also particular conversion pages. By dialing in, you can see what conversion offers are not converting the way they should.
For a whole website, you should shoot for about a 2% visitor to lead conversion rate. Depending on your industry, this could be higher or lower.
For landing pages, you should shoot for 20-30%.
If you aren’t hitting your goals, ask yourself, why? Many things could be causing a lower VTL rate, but I would start with traffic and content. If you are not driving quality traffic to your website, they will not convert. Make sure you are using tactics to bring in visitors who could be a customer of yours, not just some random person off of Facebook. To help with this, fine-tune your messaging and targeting in any advertising efforts.
Another thing to look at is if you are targeting the right keywords. Is your potential customer using those terms? What did your buyer persona research tell you?
The other thing that could be impeding your VTL rate is your content. If your content doesn’t speak to the potential lead, the visitor won’t download it. Be sure your content speaks to your buyer personas and where they are in the buyer’s journey. Also, be sure that you have compelling copy to make sure someone wants to give you their information in exchange for your content.
MQL to SQL Conversion Rate
MQL stands for marketing qualified lead, which is a lead that you have determined to meet the basic requirements of being a potential customer. They likely fit your target industry, demographic, region, etc. SQL stands for sales qualified lead, a lead that has shown genuine interest in your product or company and is ready to talk. To get an MQL to an SQL, you need to nurture them with content, email, and retargeting ads.
The MQL to SQL conversion rate will tell you if you are bringing in quality MQLs and if you are doing a good job nurturing them into becoming SQLs.
I would shoot for a conversion rate of about 30-40%. Your goal rate may be different based on your industry and past metrics.
If this number isn’t looking like you want it to, you need to evaluate your lead nurturing efforts and your MQL generation and qualification. Deep dive into your efforts and see if people are falling off at a particular stage in the lead nurturing, or if you need to refine your requirements for an MQL - so you can focus on those great leads - and not just the “eh” ones.
SQL to Customer Conversion Rate
The SQL to customer rate is the last vital conversion rate to track. This one can get tricky because it blurs the line between marketing and sales. SQL to Customer rate is crucial because it helps you understand if you bring in quality leads to your sales team.
That doesn’t mean that every lead is perfect, and the sales team isn’t doing their job, and it also doesn’t mean that every lead is terrible, and the sales team is excellent. At this point, you have to come together to increase this conversion rate. A low conversion rate could mean bad leads are coming in, but it could also mean that something is missing in the sales process.
Take your data into account for a goal here. It can be wildly different depending on your industry, but once you know your benchmark, unless it is 100%, you can work to improve it.
My advice? Push up your sleeves and dive deep into the CRM. Take a sample size of contacts and see what the data is telling you. From there, you can make a plan to improve the rate.
Cost Per Lead
Cost per lead is a great way to understand what each lead is costing you truly. I like to do this per source, so you can see what channels are most cost-effective. Cost per lead is also a great equalizer. If you are spending $10,000 on advertising, but $1,000 on SEO, you can’t compare paid leads to organic leads, but you can easily compare cost per lead.
The cost per lead goal ultimately depends on your company. You need to decide as a team what an acceptable cost per lead is. You may also get to a point where you can’t get it any lower, which is okay.
Cost Per Customer
The cost per customer is very similar to the cost per lead. With this metric, break it out by source to understand what source is bringing you customers for the least amount of money. One thing to remember here is that nowadays, a customer can have multiple touchpoints, especially with digital marketing. Don’t write off advertising if it is bringing in $500 customers and organic is bringing in $100 customers. Everything works together to a common goal, but that information does tell you that organic is where you should invest even more time and money.
Like cost per lead, you need to set a goal based on your company and your business for cost per customer.
Last but not least, my favorite. ROI stands for Return on Investment. ROI is the metric that will usually make your boss love you (or let him know you know what you are doing).
With ROI, you can show exactly how much revenue you have brought in from the spend you have put into marketing. This metric helps you understand what is working and what isn’t working (hint: break it out by channel. I love a good pivot table). It is also a great way to prove your department's worth when budget season rolls around.
KPIs and metrics are critical when it comes to marketing success. The first step? Set those goals! If you don’t know where to start or want to bounce ideas off someone, book some time with me here. I’d love to talk with you about your goals and how you can be off to the races with KPI tracking.