KPIs are often used as a measurement standard so paying attention to them and being smart with how you track them is vital to success.
As you determine your marketing goals and how well your agency is achieving them, KPIs have likely come up in the conversation. Every digital marketer wants to capitalise on their returns and make the most of their marketing budget. KPIs are key in helping you stay on track and analyse the performance of your marketing campaigns. The question is, are you using your KPIs effectively to guide your marketing strategy and make necessary adjustments for improvement? Are you focusing on the here and now or the future? These are some of the topics we will explore in this post. But let's first discuss why KPIs are so important for the success of any marketing campaign, large or small.
Whether your client is trying to get more website traffic or increase their social media following, KPIs can help you not only achieve your client's goal, but they can also help you determine how well you achieved that goal.
For example, your client wants more people to visit their website and become customers and at the same time, increase their website traffic from 30,000 visitors per month to 40,000. They want to see these results within one year. Your agency is expected to achieve this goal through link building and improved keyword ranking. By looking at KPIs like total website traffic, the number of links built, keyword rankings, and most importantly, total website conversion rate, you can see how well your marketing efforts fared in driving the desired results.
Did your client achieve 40,000 website visitors per month? Or did they exceed this goal? Were there more visitors turned customers? KPIs help answers these questions and help you determine your ROI. They can show how much you spent vs. the goals you were able to achieve.
Did you spend too much just for minimal results? Let's imagine that your client only achieved 35,000 monthly visitors. What did you do wrong? What can you do to get better results next time? These are the questions you can ask yourself once you've analysed your KPIs.
Below are the categories KPIs fall under and how they can help your marketing strategy:
There's a common saying in management that goes, "What is measured gets done." Like every other company, your marketing agency has goals, whether it's to increase your client base or reduce the costs of your marketing campaigns. The more you set goals, the more likely you'll achieve them because you're not only holding yourself and team members accountable, but you're also managing and measuring the results. Just as KPIs are important for successful and efficient marketing, they're also important for keeping your marketing team focused on goals and effective in making important business decisions. KPIs help determine how well your team members are using their skills and to what extent they're helping your agency achieve the desired outcome.
Let's use ROI as an example. You want to estimate the cost of your marketing efforts. By looking at salaries, fees, hourly rates as well as marketing tools, platforms and services, you can calculate how much you're spending on each project. Then, when it's time to go over the results, you can see how much you've spent vs. the goals you achieved. Ideally, you want to make sure your marketing team is bringing in more revenue each month than it costs.
KPIs give meaning to the work of your team members. They also allow them to take ownership and responsibility for their work. When they've hit their goals, they feel a sense of pride, which motivates them to keep performing. If they've hit a rough spot, KPIs can help point them back in the right direction and drive the results they're seeking.
Vanity metrics are just stats that make you feel good. They look good on paper. But they do nothing in terms of driving results and improving performance. Your client can have 1 million Instagram followers, 500,000 page views, and 60,000 YouTube subscribers. But are these metrics helping your client achieve their business goals? Probably not. They don't really provide you with context for future marketing decisions. More actionable metrics to follow include:
KPIs don't just measure results after a campaign is over. They can take a proactive approach by helping marketers make predictions on the performance of future campaigns. While lagging indicators usually come after an event happens, leading indicators can help you alter the outcome of your campaign before it's completed. For example, a lagging indicator would be churn rate. A leading indicator would be unique visitors or time spent on the website. While your campaign is still going, using a leading indicator, you can analyse how much a customer is engaged with your client's brand. Let's say that visitors aren't staying on the website for very long and that there aren't many active users. Using this data, you could probably predict that the churn rate would be high as there's little engagement on the client's website. From there, you can make improvements to the site to keep people interested and engaged.