Define KPIs for marketing
Hey! And welcome to one of our spitfire articles where we get straight to the point. I'll just start with this - "KPIs are your compass, which help you set your North Star." Pretty snazzy eh? Let's get to it.
Who cares about KPIs? Amiright?
Key Performance Indicators (KPIs) serve as measurable values that demonstrate how effectively your company is achieving revenue growth. That's it.
KPIs can help you to focus, measure progress, and make data-driven decisions and rely less on your gut or what's worked before. This blog will show you how to come up with the right KPIs for your marketing campaigns. We don't go too deep, but just enough to get it working.
My team wrote another article just now about how to use marketing budget calculators and how KPIs tie into it, if it's of interest to you.
Step 1: Align KPIs with Business Goals
Your KPIs must be directly tied to what you're looking to achieve. If your goal is to increase brand awareness, then metrics like website traffic, social media followers, and brand mentions might be your KPIs. If you want to increase number of successful lead generation from your landing page, then a KPI could be the percentage of website visitors booking discovery calls.
Here's a few tried and tested examples which are as old as time:
- Conversion Rate
- Return on Investment (ROI)
- Social Media Engagement
- Follower Growth
- Customer Acquisition Cost (CAC)
- Return on Ad Spend (ROAS)
- Marketing Qualified Leads (MQL)
- Net Promoter Score (NPS)
- Website Visitors
- Organic Traffic
- Lifetime Value of a Customer (LTV)
- Sales Qualified Leads (SQL)
- Event Attendance
- Referral Traffic
- Customer Retention
Step 2: Make your KPIs SMART
Your KPIs should be SMART - Specific, Measurable, Achievable, Relevant, and Time-bound. Interesting acronym huh?
- Specific: Your KPIs should target a specific area for improvement. For example, rather than having a vague KPI like "increase website traffic," specify it to "increase website traffic by 20%." Pretty straightforward.
- Measurable: Your KPIs need to be quantifiable. It's not enough to say "improve customer satisfaction"; you need a metric like "increase customer satisfaction score to 4.5 out of 5."
- Achievable: Your KPIs need to be practical and attainable. They should challenge your team but still be within reach.
- Relevant: Your KPIs should align with your startup's growth milestones / objectives and be key to its success.
- Time-bound: Your KPIs should have a time limit. This could be quarterly, annually, or any other timeframe that makes sense for your business.
Step 3: Choose Both Lagging and Leading KPIs
Here's how they're different.
Lagging KPIs are outcome-oriented and measure the end result of your efforts. They are generally easy to measure but hard to improve or influence. Examples may be total sales, net profit, etc.
Leading KPIs are activity-oriented. They measure the activities that drive the outcomes measured by your lagging KPIs.
For instance, if a lagging KPI is sales revenue, a leading KPI could be the number of sales calls made. Leading KPIs can be influenced and are good for predicting outcomes across all your startup's teams and departments. But don't get too carried away!
Combining lagging and leading KPIs offers you a complete picture of your performance and enables you to determine which actions are responsible for your desired results.
Step 4: Monitor and Refine Your KPIs Regularly
Once you've decided on your KPIs, it's important to monitor them regularly.
This allows you to track your progress towards your goals and make necessary adjustments to your overall marketing strategy. A dashboard or reporting tool may come handy here as this helps you visualize your data, making it easier to interpret and also report to your investors and the Board.
Wrapping it up.
Defining key performance indicators (KPIs) for your startup's marketing initiatives does not have to be difficult. You just need to take it one step at a time, and if it gets a bit too hard, just call up your buddies (us lol) and we'll be happy to take a look!
