Once you have your allocated budget and your overarching marketing strategy, it’s time to start thinking about which marketing manager KPI’s you want to measure.
Each KPI can help you to understand the performance and health of your business overall, so that you can make adjustments where needed.
You should be measuring the effectiveness of each of the marketing efforts you and your team carry out as the data you collect will be useful for future growth.
As a marketing manager there are a range of KPI’s that you should be focusing on that are centred around business revenue and growth.
Simply just tracking LinkedIn followers and email open rate will no longer do the trick.
(We aren’t saying to avoid these altogether, but another member of your team should be taking care of these metrics now!)
Instead, in order to direct your strategy in the right direction, and keep your marketing and business goals aligned, measuring KPI’s such as sales revenue and marketing ROI should be at the top of your list.
In this post we are going to dive into how to choose the right KPI’s to measure, and the most important KPI’s for marketing managers to track for maximum business growth!
What Are Marketing KPIs?
KPI’s or key performance indicators are specific metrics that validate and account for everything you do as a marketing professional.
These metrics help to measure progress towards a defined marketing goal, for example if you’re looking to increase the number of leads converting into customers, it would be a good idea to start tracking conversion rate.
This way you will be able to see exactly how quickly your customer rate is growing and then you can brainstorm ideas with your team about how to maintain or increase this number!
What’s key to point out here is that metrics and KPI’s are often used interchangeably and mixed up with one another, so before we continue, we wanted to give you two clear definitions.
- Marketing KPI’s are used to measure performance based on key business goals, whether that be raising brand awareness or increasing sales by 20%.
- Marketing metrics are used to measure the progress and performance of specific business activities, for example the number of blog page visits, or Instagram followers.
Ultimately, marketing KPI’s are bound to sales KPIs, and both teams should be working towards the same overarching goal: boosting business growth.
Marketing KPI’s aren’t limited to specific channels or areas of marketing but instead they are relevant across:
- Content marketing
- Email marketing
- Social media marketing
- B2B marketing
- Campaigns and advertising
If you are going to continue to contribute towards the success of your organisation you need to predefine which KPI’s are most important.
This is what differentiates marketing KPI’s from marketing manager KPI’s, as in your position you should be focusing on tracking the KPI’s directly related to sales and growth, rather than social media engagement or number of blog page visits.
Although this narrows the pool down slightly, there are still a number of marketing KPI’s to choose from, so let’s explore how to make the right choice for your company.
How to Choose Your Marketing Manager KPI’s
It can be easy to get lost in the sea of marketing KPI’s and forget what it is your company wants to track.
Now first and foremost, we must highlight that these KPI’s can change! And they probably will as your business grows and expands, but first, it’s important to determine why you are tracking certain key performance indicators over others.
Start by asking yourself:
What matters and what data points are really important for us?
If your answer to this question is “keeping budget spend low” then it may be useful to start tracking cost per lead, your marketing return on investment, and cost of customer acquisition.
(All of which we will explore below!)
This way you will be able to see just how much each of your customers is costing you and if you’re making that back through their engagement (i.e. if they’re purchasing your product/service).
However, if your answer is “to find better quality leads”, it’s a good idea to start tracking customer retention rate and your overall number of leads.
Whilst tracking other metrics such as email newsletter subscribers and social media engagements is still important, as a marketing manager, you should be focusing on KPI’s that link directly to growth.
The Marketing Manager KPI’s You Should be Tracking
There is a long list of marketing KPI’s that you can choose to track, especially when you drill down into specific areas of marketing.
However, don’t start the process thinking you can track every single marketing KPI with ease as that’s not always the case!
Depending on the size of your company and the extent of your marketing efforts, there will be a group of marketing KPIs you should be prioritising over others to ensure you have valuable data to show your contribution to business growth.
For this post we are going to focus on the best KPI’s to track for marketing managers, that are centred around revenue, business growth, and lead quality.
We are starting off with sales revenue, which is arguably the reason for all of your marketing efforts in the first place!
This is an important marketing KPI as tracking sales revenue allows you to see exactly what effect your campaigns and marketing activities have upon your company’s sales funnel.
Let’s face it, your senior team want to see numbers growing. This is their primary concern as an increase in sales revenue means overall business growth.
Sales revenue is calculated by multiplying the number of products or services sold by the price per unit:
Sales revenue = units sold x sales price
By accurately calculating sales revenue this can help you to measure how profitable marketing activities are, and can help yo form decisions about where funds are best invested internally.
It’s crucial to be open and transparent about these figures particularly when it comes to revenue, as like we said it’s arguably the most important KPI to track!
For example, if you’re team is unaware of the expectations, or how their work contributes to each sale, it’s because you haven’t given them all of the relevant information.
Therefore, make sure everyone is in the loop and align your marketing activities with the sales revenue figures. This way you know that everything you and your team are putting out there is a good use of time, effort, and budget!
Now we are moving onto another crucial KPI to track for marketing managers, and that’s marketing return on investment.
This marketing KPI is essentially the amount of money a company generates by using some of its budget towards its marketing.
MROI can be measured using this calculation:
MROI = sales growth – marketing cost / marketing cost
Tracking marketing return on investment is a great way to understand whether your marketing efforts are worth the effort!
Marketing ROI equally allows you and your team to justify your current marketing spend and budget allocation for future campaigns.
For example, if your marketing return on investment is high, this means you have spent company money well with your efforts and gives you evidence as to why you should be given the same budget (or more) in the future.
Think of positive MROI like a good friend backing you up, as this figure helps to assure your senior management team you are putting the budget to good use and achieving results, whether that be increased brand awareness or increased leads.
Number of Leads
A lead is an individual who completes a desired action determining them as a prospective or potential customer.
For example, if a consumer visited your website and filled out a form to download a gated eBook, they would be classed as a lead.
In order to get their copy they would have to input details such as:
- Their place of work
- Their job role
- Their email address
- Their phone number
- How they found your website
By tracking your number of leads, you will able to accurately see what proportion of your audience are on the road to converting into customers.
This can help you better understand your customers’ needs and target your future content and campaigns towards them.
Keep in mind that leads are usually near the start of a marketing and sales funnel, and they still have quite the journey to go on before they become a customer.
To generate a larger number of leads overall, you first need to ensure your marketing efforts are geared towards increasing traffic to your website, social media channels and all other brand touchpoints.
If your marketing efforts generate well-targeted traffic, this means you will have a larger number of potential customers interested in your offering – right where you want them!
If properly nurtured by your marketing team, these prospective customers will soon become leads.
As you generate more leads from your marketing efforts this will result in increased revenue and likely more profit for your business.
Marketing Qualified Lead (MQL)
Broadly speaking leads can be split up into different categories, one of which being an MQL, or a marketing qualified lead.
This is a consumer who is deeply interested and engaged with your content and your offering.
They may have downloaded your resource or requested a demo for your product or service, and they are at the stage where they are ready to make a purchase.
This is a great KPI to track as it can outline to your entire team exactly how many leads are at the right stage in the funnel due to your marketing efforts.
Sales Qualified Lead (SQL)
If a marketing qualified lead is properly nurtured they will become an SQL or sales-qualified lead, which is classified as follow-up worthy by your sales team.
At this stage, you have done your job as part of the marketing team and pushed the lead as far as possible, and its now time for your sales team to nurture this lead into a customer.
However, SQL’s were once MQL’s and it can be useful to know exactly how many of the leads you nurtured go on to become a customer.
Depending on how many (or how few) continue through the funnel, you can adapt your marketing efforts based on this number!
Cost per Lead (CPL)
In order to estimate how effective your marketing campaigns are, you should be tracking cost per lead (CPL).
This KPI helps you understand how much money should be spent on the process of acquiring new leads.
This is important for marketers as you and your team will spend time nurturing leads with curated content on your social media channels and website, personalised email newsletters, and possibly even free downloads or trials.
It’s important that the time and budget you put into these marketing activities generates some kind of revenue for your business.
The general idea for this KPI is that your CPL shouldn’t be high in relation to the price of your product or service. Otherwise you will be plugging a large proportion of your funds into gaining leads and you won’t be getting the same in return!
Overtime, when your offering becomes more expensive and more advanced, it’s normal for your CPL to rise, but if you’re just starting out, try to keep your cost per lead as low as you can!
All while still converting them into customers of course!
Cost of Customer Acquisition (COCA)
As with all of these KPI’s it’s important to keep your marketing budget in mind when measuring cost of customer acquisition (COCA).
COCA measures exactly how much money you spend converting a lead into a customer, and can be worked out using this calculation:
Cost of customer acquisition = total sales and marketing investment / number of customers acquired
Now when we say “total sales and marketing investment” we mean every penny your company has spent on sales and marketing, company expenses, and investments.
This helps to paint a wider picture of whether your overall budget is being used well, for example if your COCA works out to be high compared to your total marketing spend, you need to ensure each customer is worth it!
By “worth it” we mean that every customer invests their cost (and more) back into your business. If this is the case then don’t worry too much about the higher number, however, this will likely not be the case as all customers will provide varying value to your company.
Customer Lifetime Value
Our final marketing manager KPI is customer lifetime value or CLV, which is the projected revenue that your customer will generate for your business during your entire relationship.
Put simply, this is how much a customer will spend with your business during the business relationship.
This KPI can be used to understand and gauge current customer loyalty, and if customers continue to buy from you time and time again it’s a sign that you’re doing something right!
Equally, once you have gauged if your customers are consistently returning to your over your competitors, you will be able to determine whether your cost per lead is at a suitable amount.
For example, let’s say someone visited your website and signed up for your monthly dog food subscription (with the first month free), then cancelled within the first 30 days.
I don’t know about you but that doesn’t seem like a relationship worth investing in to me!
Now imagine this was happening on a larger scale across your business, and by measuring customer lifetime value, you discovered that the majority of your customer relationships are short-lived and ultimately not bringing in any revenue.
At this stage it is worth plugging more of your marketing budget into acquiring new customers than nurturing the existing relationships you have.
On the other hand, let’s say someone signed up to your dog food subscription service and continued to be a loyal paying customer for 5 years before cancelling.
5 years is a long time to stay loyal to a CPG company, especially with new brands arriving on the scene everyday, and paying monthly for a subscription is a big commitment.
This customer lifetime value is certainly higher than the first customer example, and in this instance your time and budget would be better directed into nurturing this customer back into the business relationship.
It may be a good idea to offer a discount for the next 3 months, or even a reduced rate if they sign up for another year!
Investing in good customers can be more costly to begin with but can bring you more profitability in the long term.
Marketing Manager KPI’s to Drive Your Strategy in the Right Direction
From number of leads, to customer lifetime value, we’ve covered a lot of marketing manager KPI’s in detail in this post.
As we have mentioned there are a wide range of marketing KPIs to choose from and it all comes down to what’s most important for the growth of your business.
You may wish to focus your efforts on sales and ROI, or you may need to double down on acquiring and nurturing leaders. Whatever it may be, collecting key performance indicator data is essential if you are going to improve the marketing strategy you have in place.
Every action you take has a consequence in marketing so it’s important to have the evidence and reasoning behind every campaign or project to show your senior team that your goals are aligned with theirs.
Here at Canny we work closely with marketing managers around the world, helping them to maximise their budget and contribute to business growth. Let us do the same for you by getting in touch with a member of our team.