Marketing KPIs and Web Analytics
The KPI’s every startup should track - PART TWO
by Lenka Davis
As you get ready to launch your product you will want to focus on two main objectives, getting customers and revenue. And to be efficient and effective you need to have KPIs (Key Performance Indicators).
Part Two of this blog is designed to explain Marketing KPIs and web analytics. Brainstorm the best marketing tactics that can meet your business marketing objectives and then roll out pilot campaigns to test out which one works best for you. While you are creating those campaigns keep in mind the following numbers you can’t ignore.
Also, Leading and Lagging indicators, what’s the difference?
Some indicators are Leading Performance Indicators and some are Lagging Performance Indicators. The difference is one predicts the future whereas the other shows what has happened in the past. In the beginning you will need to look at both since you may not have a lot of opportunities to track the leading indicators.
Primary Marketing KPIs
CPL or Cost Per Lead
How to calculate CPL: take the total cost of a marketing campaign, divide that by the number of leads generated by the campaign.
A marketing campaign can be anything from digital marketing to traditional marketing. Digital marketing can be programs such as an email sent to potential customers, beta testers and customers that are early adopters. It can be a social media advertising campaign on any social media platform. Or your campaign can be any traditional marketing campaigns such as mailing postcards, calling prospects or outdoor ads.
CPL can also be referred to as Customer Acquisition Cost or CAC, see item number 4 in our Startup Analytics article.
Costs of a marketing campaign includes the work it takes a person to make the creative, the writing and design. The cost of creating the item, if it is a physical product such as a postcard and the cost to implement the campaign such as postage or the social media platform advertising costs.
A simple CPL example would be:
Writing and design: $300
Advertising costs: $200
Total cost: $500
Leads generated: 5
CPL or cost per lead of $100 (dividing 400 by 5)
CPS or Cost Per Sale
How to calculate CPS: take the total cost of a marketing campaign, divide that by the total number of sales made.
If you continue with the example above and you were able to convert 2 of the 5 leads into a sale then your cost per sale would be $250.
A cost per sale gives you information about how well the messaging works and does it get to the right customer.
Return on Investment (ROI)
How to calculate ROI: Sales growth minus marketing costs, divided by the marketing costs.
Return on your investment or also called profit on capital invested. ROI helps you decide if the investment was a good one or not. To measure ROI look at how much income (sales - cost) you made divided by the amount you invested or your initial or program costs. Depending on if your sales are $1,000 per customer or if you are providing a good or subscription service, that’s just two examples, your per customer ROI will change depending on how many customers you have.
For example, a campaign that costs $500 to run will get you an ROI of almost 400%
Campaign cost $500
Subscribers/customers = 2
Subscription cost at a $499/month
Results in sales $998 ($499 x 2)
The lower the price point the more customers you will need to make a $500 campaign result a profit. Or you can lower the amount you spend on advertising or find more efficient ways to get the word out about your product.
DOWNLOAD our Marketing KPIs INFOGRAPHIC.
Other Marketing Analytics
Other analytics you want to track will be based on the type of business you are building. Marketing and Sales qualified leads, and net promoter scores for businesses will apply to both B2C and B2B customers. Email conversion rates and social media reach will apply to those businesses that include email marketing and social media marketing in their marketing plans.
Qualified Leads: Tracking MQL and SQL
MQL is your marketing qualified leads that has been researched by the marketing team. These come from marketing activities.
Qualified leads are more likely to become customers than the other leads you have. For a lead to be qualified it has to meet certain criteria based on the business core customer persona.
SQL is a prospective lead that is ready to talk to the sales team.
These are leads that the team has evaluated as being most likely to become a customer.
Net Promoter Score (NPS)
Essentially, subtract the number of detractors who identify as unhappy customers from the number of promoters.
Finding your net promoter score will help you measure customer experience and predict business growth. It typically takes the form of a single survey question asking respondents to rate the likelihood that they would recommend a company, product or service to a friend or a colleague.
Detractors are unhappy customers. They generally give you a low score.
Promoters are loyal enthusiasts, they can give you a 9/10 or 10/10 when asked to recommend your product.
To calculate the NPS “Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).” The NPS is considered a Leading Performance Indicator, meaning that it tries to predict the future of the business.
Email conversion rate
Percentage of subscribers that take the action, such as click through to read a blog, or fill out a form.
Email conversion rate can be calculated as completing a purchase of a product or service or it can be a person that became a lead. Tracking email campaign success should include information about how many people open the email in their email inbox, click through rates on any link included in the email message.
Benefit of email conversation rate: It tells you which email campaigns are more successful and what topics and products your readers are most interested in.
Social media reach
Number of individuals that see your content.
Social media reach data on a social media platform is the number of people that see your content. If people interact with your continent in some way with likes, comments, shares or saves, then that is measured as a social media interaction. Social media platforms have their own insights and analytics they track that you can find. They also include algorithms that control how many people view your posts based on different criteria.
Benefit of tracking social media reach: This will give you a sense of how widely your posts are viewed. Depending on your business and your audience reach may or may not increase your post Likes and comments.
DOWNLOAD our Marketing KPIs INFOGRAPHIC.
Web Analytics
Key indicators for your web presence include those that are based on the web page itself and those that are a result of interacting with the page.
Website Traffic
Track the number of visits, the unique number of visitors to your web pages and which pages they visit. Along with which pages they visit, also watch how much time visitors spend on a particular content page. You may be able to see this data if your website host, such as Squarespace, tracks and provides these analytics. If you have your website connected to Google Analytics you will see this data, and more, tracked for you.
Benefit of tracking website traffic: Use your website traffic to help you decide what content or products your customers are interested in, to create awareness and generate leads.
Website visits are the number of single browsing sessions by individuals.
Page views are the number of pages individuals went to on your website.
Unique visitors are the number of different visitors that went to your website for a specific time period (a couple of years).
Website Leads
Website leads are potential customers who filled out a web form on your site and provided some contact information. The visitor filled out the form because they either want to continue to get periodic information from you, such as a newsletter or a blog post or they would like to have a chat about their question.
Benefit of collecting website leads: Since the lead is provided by the visitor your lead is already interested in or looking for a solution they think you can solve. They tend to be a higher quality lead.
Referral Traffic
Referral traffic or source traffic tells you where your visitors are coming from to visit your website pages. In general website visitors come directly to your site, are organic or come from some other source such as social media, ads, emails or other blogs. This data can be found in the acquisition area of your web analytics and is listed under traffic sources.
Direct referral traffic is visitors that actually typed your url into their browser. This happens when they have your website url somewhere not online or are not able to click through to your website such as some social media sites.
Organic traffic is created when people are searching for some phrase or product and the results include your website link.
Page Goals
Web page goals can include a wide range of objectives beyond just letting people know about your company’s purpose and services. Your goal could be to write more blogs, get more traffic to your website, improve your conversion rate, or increase your subscribers. If you create specific web pages that have one specific goal then you can track the progress towards that goal.
Benefits: If you build your website with a goal in mind it will be optimized to meet those goals.
DOWNLOAD our Web Analytics and Marketing KPIs INFOGRAPHIC.
Fun Fact
Web traffic has exploded in the last 20 years. So much so that in July 2021 the top websites in the US by traffic were Google, YouTube, Facebook, in that order. Google had 16.15 billion visitors in the month of July in 2021. In April 1999 the top websites in the US by traffic were AOL, Microsoft, and Yahoo. AOL had 46 million visitors that month. What’s surprising is that Yahoo and Amazon are on both top 12 websites lists. This interesting insight was tweeted recently by @avinash, author of Web Analytics 2.0 and Digital Marketing Evangelist at Google.