How to choose marketing KPIs
To drive better digital performance, tracking and measuring marketing KPIs is critical. But picking your key metrics for marketing can be a daunting task. There are just so many metrics that you could be measuring, and just about everyone has an opinion on what the key metrics for marketing should be (ourselves included). But ultimately, the marketing KPIs you choose to track are unique to your team, business and product.
So, to help you make the decision, here’s a helpful guide to the types of marketing KPIs you should and shouldn’t be incorporating into your reporting and strategy.
The types of marketing KPIs you shouldn’t be using
We can’t tell you what your key metrics for marketing should be, but we can tell you what they shouldn’t be. And, as a rule, your marketing KPIs shouldn’t just be about making you look good. As such, you should avoid tracking the following.
Vanity metrics
Vanity metrics are metrics that look good but don’t actually show how successful your marketing is. They’re also metrics than can be manipulated to make the business and marketing activities look more successful than they are. They show often-meaningless digital activity but don’t track active, engaged customers or leads. Some examples of vanity metrics in marketing KPIs are:
- Page views. Page views often aren’t helpful at all. It’s a metric that can be easily inflated because page views include data from users that have just clicked on and off a page without engaging at all. A more helpful metric to track to is the journeys users took after viewing a page, or whether or not they converted.
- Number of newsletter subscribers. The number of subscribers to a newsletter doesn’t give you any insight into how successful that newsletter truly is, because you could have millions of subscribers who are barely engaging at all. The number of leads generated through the newsletter would be a much more helpful metric for you to track for real insight.
- Social media impressions. It’s great to have loads of engagement on your social media pages. But if these metrics aren’t resulting in genuine interest and engagement, then loads of impressions doesn’t mean much. Instead, try tracking the number of conversions through social media.
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Lagging indicators
A lagging indicator looks back at whether the intended result was achieved (not to be mistaken with a leading indicator, which we’ll touch on shortly). These are nice to know — and easy to track — but they can be weeks, even months, old. As a result, lagging indicators can’t be used as indicators of how well business is going right now, or predictions for how successful the future will be. Some examples of lagging indicators in marketing KPIs are:
- Last year’s revenue. Obviously, you should be tracking each year’s revenue. But for marketing activities, it’s not as helpful as you may think, because it doesn’t give us any true indicator of what success will be like this year.
- ROI of marketing activity. ROI of marketing activity is helpful to know when conducting a post-mortem of marketing activities. But since you don’t get a clear picture of what the ROI of your marketing is until campaigns are over, it’s not helpful to track and report it alongside regular marketing KPIs.
- Brand recognition. Again, this is something you only learn about after-the-fact, rather than a being one of the key metrics for marketing that you can measure on the go.
Marketing KPIs which are too specific or narrow
While we’d always recommend being thorough in your key metrics for marketing, metrics that are too specific or narrow will simply create confusion in your reporting. Marketing KPIs that only track a small portion of your marketing will give a distorted view of the success of your digital performance. Some examples of key metrics for marketing that are too specific of narrow are:
- The success of a single location. It’s awesome if your marketing is going great in one particular region. But success in that one location shouldn’t be one of your key metrics for marketing if it goes against a broader pattern — or it just becomes another vanity metric. If you are achieving real success in one area, then look deeper into why that is and how you can recreate it across the board.
- The success of one particular campaign. If you are running multiple campaigns and one is doing particularly well, unfortunately you can’t just use that one campaign’s success as a metric. You should look into why this is doing so much better than others and spread the success across your strategy.
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The types of marketing KPIs you should be using
Overall, your key metrics for marketing should indicate genuine engagement. Your metrics should answer the question: ‘Does this authentically measure our audience’s interest in the product?’ with a resounding ‘yes!’. The types of marketing KPIs you should be tracking are the following.
Customer-driven
Customer-driven metrics that show genuine customer engagement are much harder to manipulate and offer a lot more information than other metrics. It’s the difference between a customer clicking on and then off a page without reading and a customer actively engaging with your website or making a purchase. These kind of metrics tell you what is successful in your marketing and give you insight into what your customers’ genuine behaviour and interests are.
Leading indicators
As opposed to lagging indicators, leading indicators are metrics that predict future changes or blockers to your digital performance. Anticipating these ahead of time will help your team and marketing strategy be prepared for anything that’s going to come your way. Leading indicators let you know you are on track to achieve the results you want. They’re a bit like a goal you set for your marketing, but one that’s supported by data and is constantly being measured itself.
An example of a leading indicator for marketing might be that you have set the goal of getting 50 sales from a campaign. You look back over your data, and see that 1 in every 5 deals is closed by the sales team, so as a result you’ll need to get 250 people to convert through your ads to ensure that those 50 sales are met. Setting this goal and reporting on your success in achieving it aligns your whole team and marketing strategy around the leading indicator, making it a very powerful marketing KPI indeed.
Reliable and consistent
Some metrics have a tendency to fluctuate over time, but in order to gain actionable insights and make decisions using your KPIs they have to be pretty consistent. An example of an unreliable or inconsistent metric would be metrics relating to a particular campaign you’re running just for a short period. Say this was an ebook: You’d would want to track the number downloads in relation to that specific campaign, but not report on the amount of downloads once that campaign is over because the numbers will no longer be relevant.
Without consistent marketing KPIs, it’s hard to know how your marketing is doing because fluctuating metrics make historical comparisons much more difficult. When your metrics are consistent, it also makes it easier to anticipate what’s going to happen in the future because you can predict trends.
Final thoughts
Ultimately when choosing your key metrics for marketing, you need remember that the reason you track and measure metrics is to make your marketing more successful, not to make you look ‘good’. This means that metrics that accurately depict engagement and interest in your product are always going to be the best for your business — and should be part the foundation of your marketing reporting and strategy.
Staying on top of your marketing KPIs is critical to success, but analysing everything going on in your data uses up time, resources and manpower you don’t always have spare. Our anomaly detection and KPI analysis platform automatically analyses all of your marketing KPIs and detects any anomalies or unusual patterns, all on one easy-to-use dashboard. Try for free today.
Originally published at https://www.millimetric.ai.
