The 7 Most important Marketing KPIs you should be tracking

Arguably, the digital revolution has benefited marketing above all …

SimpleKPI Icon By Stuart Kinsey

2 Minute Read
Vanity KPIs on a peacock

Arguably, the digital revolution has benefited marketing above all disciplines. The idea that a marketer could track the engagement of an individual with a specific campaign in real-time would have been a pipe dream even a couple of decades ago.

Along with this revolution came data, lots and lots of data. Being able to segment potential purchasers by demographics and behaviors based on this data, enabled marketers to focus their campaigns for greater return on investment.

With this tectonic shift, marketers sough to track and report on campaigns more accurately, reports that could take months to produce can now be created instantly. And with this deluge of data came the vanity metric. Essentially, metrics that make marketers feel good, while dazzling the eyes of senior executives. Unfortunately, they are limited in reporting the success of the marketing function or specifically these Key Performance Indicators (KPIs) don't actually provide any actionable insights.

An illustration showing the difference between vanity and actionable metrics

The trouble with vanity metrics is that they are both misleading and are rarely linked to financial outcomes. For example, the increasing number of visitors to a website, Facebook likes or page views is in no way reflective of the success of a campaign, paying customers are.

The solution

While tracking social media popularity isn't always a bad thing, savvy marketing professionals focus on the actionable KPIs that are aimed at business success. Instead of getting bogged down with the buzz of feel good metrics, they take aim at KPIs that provide bottom line results through actions and drive marketing performance. They ask themselves, does this metric make me take actions and make decisions? If not, then its not worth wasting my time.

So, if I ditch the vanity metrics, what should I be tracking? - And more importantly why?

When vanity metrics take hold, it can be difficult to break the habit and get back to measuring what matters. So, we've put together 7 Key Performance Indicator examples that you should be tracking.

Customer Lifetime Value

Customer Lifetime Value (CLV) may just be the most important KPI in terms of understanding customers and the decisions you need to make as a marketer to obtain and retain customers. Such as, how much of the marketing budget should I spend to acquire customers, and how much is the cost to retain them?

The effort required to calculate CLV can vary drastically between industries. E-Commerce and subscription models are far easier to calculate than automobile or residential purchases. Furthermore, there are several ways to calculate CLV with degrees of complexity - however for most of us mere mathematical mortals here’s the formula:

Take either the Average Monthly or Annual profit from individual Customers.

Multiplied by the Average number of months or years they continue to be customers.

Minus the initial cost of acquisition

CLV = $2,000 (profit) x 2 (years) – $200 (acquisition) = $4,800


About as simple as it gets but possibly the most misunderstood of KPIs. Essentially the more leads you generate through marketing the more chances you have to generate more revenue, right?

Leads are as important to sales as water is to plants, however the number is often seen as the most important indicator. Marketing = x amount of leads generated = success. Fundamentally this is flawed – leads are easy to generate as long as your definition is flexible. Leads are not created equal. Focusing on Sales Qualified Leads (SQL) instead of Marketing Qualified Leads as the determining factor in marketing success will focus efforts to find and engage those customers more likely to become customers.

Website visitors to SQL leads

For many businesses, the vast proportion of leads(SQL) will have developed, at least in the initial stages from the website. However, the number of visitors to actual qualified leads will be numbingly low. An estimated 96% of users will leave your site without any type of engagement, download or enquiry, let alone evolve into an SQL. Tracking those few engagements that become fully fledged Sales Qualified Leads will encourage website content, messages and propositions to focus more on leveraging data to target demographics and behaviors of users more likely to convert.

Homepage conversions

Conversion rates often focus on total visitors across your entire website. Although this is useful for looking at content as a whole it, can lull into a false sense of success - particularly with websites with lots of content. Homepages are your primary pitch. They are also in the vast majority of cases the highest ranked landing page, and as such, the largest volume of users arrive there. This key indicator is crucial for not only capturing the maximum number of leads in the shortest period of time - but also for assessing that your pitch is aligned to visitor's interest or need.

Online ROI

Marketing is an investment and as such the marketing budget comes under constant scrutiny for its anticipated returns. Luckily when tracking online ROI, data and tools are widely available to quickly assess the performance of online Ads across the spectrum of search engine and Social media channels. This KPI needs constant monitoring so that decisions can be made as to which channels need optimizing. Actions can then be taken to increase or reduce budgets that increase the online ROI.

Organic Search

Organic SEO is a constant and evolving task. All aimed at attracting visitors naturally to your site who have used a search engine to search for your product or service based on a specific need. Organic search visitors are not directly related to advertising cost as they have not come through any kind of PPC mechanism, additionally they will be the largest volume of your visitors. So, it makes sense to concentrate on improving the performance of organic search, not least because it is the most cost-effective way to get potential customers to purchase.

Negative Social Media Mentions

Nearly every business will at some point generate negative reviews or comments. Its just part of the course of trading. However, generating excessive negativity on social media channels can have the impact of destroying brand reputation to the point of driving a company out of business.

Although every touch point with a customer has the potential to cause a negative user experience, ultimately, it falls to marketing to assess any potential damage and respond. Having a good process to track and report on this KPI is a good first step, along with a nominated person to handle the one to one response.

This KPI can also offer insights into process problems with the goods or service, customer service issue or even misleading marketing claims and unsavory sales practices.

Stuart Kinsey portrait

by Stuart Kinsey

Stuart Kinsey writes on Key Performance Indicators, Dashboards, Marketing, and Business Strategy. He is a co-founder of SimpleKPI and has worked in creative and analytical services for over 25 years. He believes embracing KPIs and visualizing performance is essential for any organization to strive and grow.

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