How to Measure Your Marketing Efforts
and Prevent Budget Creep
As marketers it’s important to know the right marketing KPIs you need and how to measure your marketing efforts.
Marketing activities without measurement will surely fail. Or maybe not. How can you know if success has yet to be defined?
That’s what Key Performance Indicators (KPIs) are for. They are key metrics that demonstrate what success should look like. And equally importantly, they can also show where effort is being wasted.
KPIs will tell you if your marketing strategy is working or if it needs to be revamped.
How To Measure Your Marketing Efforts
KPIs are commonly used to measure marketing costs versus return. But they can also measure more specific goals, such as lead generation or digital marketing effectiveness.
Once you have determined what success looks like you can identify how to measure it by identifying your key metrics, and then you can track your marketing performance.
By monitoring your activities against business goals, you can confirm whether your marketing is headed in the right direction.
What does Marketing Effectiveness Look Like
KPIs are unique to each business and are used to measure the things that really matter. Not every business will have the same specific goals, so your effective marketing will look different to your neighbors.
For example, effective marketing for one company might show market spending costs of $100 and generate a revenue of $200. A 100% profitable increase proves a marketing success. Another company might base their marketing effectiveness on reaching a wider demographic audience.
The key take away from measuring your marketing effectiveness should be whether your marketing activities help the business reach its goals.
Generally, you can measure short and long term revenue generated by marketing activities. But marketing effectiveness really should be measured on many other levels too. Below we’ve listed the top eight KPIs that can help you make sure success is in reach.
8 Marketing KPIs That Really Matter
While all KPIs you determine are essential for your business, some matter more than others, and some directly impact your business’s growth and success. Below are the 8 KPIs you should be tracking to ensure your marketing efforts are well-spent.
1. Leads Generated And Cost Per Lead
If your marketing campaign is effective, you should see a rise in quality leads. More quality lead generation equals more sales opportunities! That translates into potential growth in sales, which then leads to the goal of generating a higher ROI.
2. Conversion Rate
After your marketing campaign sees a rise in leads, a successful marketing plan will improve the business leads conversion rate.
3. Sales Growth
With lucrative leads and conversion rates comes business sales growth. Your sales growth determines that people are buying your product, which is the overarching goal.
This is the most important KPI that all businesses should track to ensure business growth. Without sales, there is no business.
4. Return on Investment (ROI)
It’s one thing to make sales. It’s another to make enough sales to make a profit. A business must track its marketing ROI metrics to ensure that it will make a return on the marketing and production costs.
This KPI also determines that a business is not going over budget or wasting money while not meeting KPI goals.
5. Net Promoter Score (NPS)
A simple yet effective KPI is a business NPS. By asking customers: “How likely are you to recommend our services on a scale of 1 – 10?” The marketing team can measure the customer experience, helping to identify areas for improvement and product satisfaction.
6. Digital Marketing Email Open Rate
If you’re using digital marketing like email marketing campaigns, you should track conversions and click through rates. If potential leads, long-time clients, and cold leads aren’t opening the emails, there might be a technical, content, or target audience issue.
Either the target market is not interested, the subject line needs to be more intriguing, or your emails go straight to junk mail. With a 15% conversion rate (2020), email collection forms are a highly successful way to convert viewers into leads.
7. Content Marketing Traffic And Quality Leads
If your business has a website, then website traffic metrics are essential. You need to know if your marketing funnel is working because if it’s not, then your marketing strategies need to be fixed. If your business website is the only source you have for sharing information about your products, you need to be driving traffic to your website. Without website traffic, there is no revenue.
According to a HubSpot Marketing Report, “over 50% of marketers say keyword rankings and organic traffic are the top ways they measure the success of their content marketing strategy.”
8. Social Media Content Shares, Reach and Engagement
Your business reaches a broader audience through organic reach when people share your social media posts.
People who engage with your business and share your content with their followers are talking about your brand. This is a good thing because the greater your brand awareness, the more chance you have of accomplishing your sales growth goals.
How To Prevent Marketing Budgets From Getting Out Of Hand
A significant benefit of well-set KPIs is knowing when to cut your losses. KPIs should ensure the marketing effort versus marketing costs are being well managed.
Wasting your marketing budget on campaigns that aren’t working is a surefire way to see your marketing team out of pocket.
To keep your budget on track, make sure your marketing strategy:
- Has clear campaign goals
- Measures marketing effectiveness
- Uses key marketing metrics
- Matches media outlets based on your target audience
- Uses a budget tracker
- Makes KPI-based decisions
Measuring Marketing Effectiveness With KPIs
You need to measure your business and marketing goals to determine whether your marketing efforts are being rewarded. Adopting practical KPIs provides your business with clear insight into your marketing efforts.
Stay on track by knowing how to measure your marketing efforts and reach your campaign goals. Then make educated marketing decisions based on your tracked KPI metrics. If something isn’t working, based on tracked evidence, go back to the drawing board.