Marketing Agency 101: Determining The Right Marketing KPIs
The amount of data that is available is astounding. And each and every second, that data grows at astronomical rates. For a marketing agency, this can either be seen as overwhelming or it can be seen as a welcome tool to unlocking the many mysteries of your clients’ consumers. For the latter to occur, the agency needs to know what they want from the data – first, what they want to know and, second, what data they want in order to find the answer. This is where choosing the right , or KPIs, comes in. While any marketing professional knows that KPIs such as leads, acquisition cost, and sales revenue are a must, there are a handful of other key performance indicators that can take any marketing campaign to the next level. The following are the top marketing KPIs that every agency should be measuring in order to reach that next level.
1. Lifetime Customer Value
Every customer provides a business with value. If this value can be measured, it can be increased. And increasing this customer value ensures that a marketing agency is keeping their clients’ customers happy, reducing customer attrition, and better connecting with leads.
All it takes to increase this value is the development of a lead nurturing campaign for each client. This type of campaign enables an agency to reach out to current customers, connect with them, and inform them about new services or products, new promotions, or other more general information.
You can measure lifetime customer value before and after the campaign with the following calculation:
(average sale per customer) x (average amount of purchases per customer per year) x (average retention for customers).
2. Website Traffic To Lead Ratio
A website is often the first point of contact that an average customer has with a business. A marketing agency needs to be aware of how successful this contact is. It will allow the team to be aware of both the conversion rate of the website and the quality of the traffic that visits the website. Once these numbers are broken down, marketing can look at campaigns they can pursue in order to increase the conversion rate and turn more website traffic into customers.
You can measure the percentage of website leads with the following calculation:
(number of website leads) / (number of website visitors).
This number can be further broken down and analyzed if there are multiple lead converters on the website (i.e. forms, downloads, etc.). Each lead converter can be evaluated for effectiveness, then improved or marketed, and finally re-evaluated.
3. Online Marketing Return On Investment
Beyond understanding how successful a website is at turning visitors into leads, a marketing agency should also look into where those visitors come from. Most of these visitors do not simply type in the website address and go straight there. They first see the business on Google AdWords, a social media platform, or some other form of online marketing. Once you get the numbers on the amount of customers that each online marketing methods draws to a client’s website, you can then use the following calculation to identify which method provides the biggest return on investment:
(number of website visitors drawn in by method) / (amount of money spent on method).
This calculation is essential to do because while one online marketing method might bring in the most customers, it might cost more per lead than another method that brings in fewer customers. In this case, your best option is to shift money around and invest more in the online marketing method that has the biggest . Additionally, you should be aware that while one online marketing method may have the greatest ROI for some clients, another method could create the greatest ROI for other clients. In short, online marketing is not a one size-fits-all.
4. Marketing Qualified Leads
Getting website visitors is exciting and converting those visitors into leads is invigorating. However, a lead is just a person – or a business – they are not necessarily the right person. The way to identify whether they are the right person, or an MQL, is by setting requirements for attractive customers. For every business this will be different and, possibly, for every product or service it will be different.
In order to develop your MQL benchmarks for each client, you will need a combination of a buyer persona, demographic factors, and website behavioral information (such as how long they spend on a specific website page). Once you have these benchmarks in place, you can go beyond just measuring general leads. You can push further and identify whether your clients’ campaigns and website are drawing in the right type of MQLs.
PRO TIP: It is important to keep in mind that just because a lead does not qualify as a MQL immediately, it does not mean that they never will. All it means is that the lead is not ready to be handed to the sales team yet.
5. Customer Retention
Marketing and selling to a current customer costs less than finding and engaging a new customer. This is why customer retention is essential. Once a marketing agency has found a customer, they need to work on helping their clients keep them.
For every business, identifying what a retained customer looks like will be different. Some must buy on a regular basis, while others must be upsold. However, once you calculate the percentage of purchases that are bought by retained customers, you can then keep track of it while trying out different marketing campaigns in the pre- and post-sales process to measure effectiveness.
6. Mobile Traffic
Mobile is no longer the future, it’s the present. Everyone always has their phone with them and it is what they use in order to get just about everything done. And it is not just about what consumers prefer, it is also about what Google’s algorithm prefers. Websites that are optimized for mobile do better in Google searches, and websites that do better in Google searches are the ones that consumers visit.
The best way to ensure that your clients’ websites are optimized for mobile is by understanding what their mobile customers want to do on their websites. Key indicators of this include everything from the most popular mobile devices used and bounce rates from mobile devices to conversion rates on landing pages that are optimized for mobile and number of leads converted from mobile.
7. MQL To SQL Conversion Ratio
And now back to leads. Just as having a lead, does not mean they are the right lead to market to, having a marketing qualified lead does not mean your clients can sell to those leads. This is why you should keep an eye on the MQL to SQL conversion ratio. If your marketing campaigns are aligned with your client’s sales team, this ratio should be high. It it is not, the ratio will be low.
In order to raise this ratio, you should concentrate on better communication with your client and their sales team. Additionally, you and the client’s sales team must be on the same page as to what qualifies as a sales qualified lead.
8. Social Media Conversion Rates
Social media marketing is more than just the advertisements that are posted on social media platforms. It is also about the content that is posted on your clients’ social media accounts. It is unavoidable, a successful marketing campaign includes a strong showing on social media.
Because each and every client’s customer base is different, their social media presence will be different. Some will need more emphasis put on Instagram. Others will have more customer potential on Facebook. Simply put, it is nearly impossible to have a strong social media presence on every popular platform. However, knowing the social media metrics for each of your clients will help you figure out which platform should be a priority. Here are a few of the metrics that you should measure:
- Ratio of traffic from social media platforms.
- Amount of customers converted from social media platforms.
- Amount of leads converted from each social media platform.
9. Organic Search
A high rate of organic searches for your clients means that you are doing something right. That something could be offline marketing, through mail, phone, newspaper, radio, television, or billboard advertisements. It could be due to excellent search engine optimization on your clients’ websites. It could also be from excellent customer experience, through the marketing and sales funnel and then on through to product or service end-use.
Because offline advertisements and SEO methods will generally use the same vocabulary, it can be difficult to decipher exactly what sparked the organic search. Nonetheless, by measuring organic search, you can create a baseline for each client. Then when adjustments are made to the website, to offline marketing campaigns, or to the customer funnel, you will be able to measure your success.
When it comes to measuring organic search, the most important metrics to analyze are:
- Organic search traffic growth from month to month.
- Ratio of leads brought in with organic search.
- Ratio of customer created with organic search.
Looking for more help in determining the best marketing KPIs for your agency or for a specific client? Download our FREE eBook – The Beginner’s Guide to Choosing the RIGHT Marketing KPIs for Your Business today!