In this article we will give an exact KPI marketing definition and some examples, and next steps to include marketing KPIs in your overall marketing strategy.
KPI Marketing Definition
Marketing KPIs are specific measures of performance used to evaluate the success of marketing campaigns and strategies and suggest areas for improvement.
A high conversion rate, which measures the percentage of website visitors who make a purchase or sign up for a newsletter, helps a company optimize its marketing strategies by identifying effective tactics that drive customer actions.
Common Marketing KPIs Defined
1. Conversion Rate
This measures the percentage of website visitors who take a desired action, such as making a purchase or filling out a contact form.
Happy Bicycles Inc. uses the conversion rate marketing KPI to evaluate the effectiveness of their email marketing.
By tracking the percentage of email recipients who sign up for their coupon program, the company can determine if their emails are engaging and persuasive and measure the success of this email blast.
2. Customer Acquisition Cost (CAC)
This measures the cost of acquiring a new customer, including marketing and sales expenses.
If a company spends $5,000 on marketing and acquires 100 customers, the CAC is $50 per customer.
3. Return on Investment (ROI)
This measures the revenue generated from a marketing effort or strategy in relation to its cost.
A marketing campaign costs $1,000 and generates $5,000 in revenue; the ROI is 400%.
4. Customer Lifetime Value (CLV)
This measures the total revenue a customer is expected to generate over the course of their relationship with a company.
If a customer spends $100 annually for 5 years, their CLV is $500.
5. Website Traffic
This measures the number of visitors to a company's website over a certain period of time.
During the month of January, a company's website has 10,000 unique visitors.
6. Social Media Engagement
This measures the level of interaction and engagement on a company's social media platforms, such as likes, shares, and comments.
A Facebook post from a company receives 500 likes, 100 shares, and 75 comments.
7. Email Open Rate
This measures the percentage of email recipients who open an email and click on a link within that email.
Out of 1,000 recipients, 200 open an email and click a link, resulting in a 20% open rate.
8. Click-Through Rate (CTR)
This measures the percentage of users who click on a link within an advertisement or email.
If an ad is displayed 1,000 times and receives 50 clicks, the CTR is 5%.
9. Bounce Rate
This measures the percentage of visitors who leave a website after viewing only one page.
If 200 visitors come to a website and 100 of them leave after viewing just one page, the bounce rate is 50%.
10. Cost Per Click (CPC)
This measures the average cost a company pays for each click on its online advertisement.
If a company spends $500 on an ad campaign and receives 250 clicks, the CPC is $2.
11. Cost Per Impression (CPM)
This measures the cost a company pays for every 1,000 impressions (or views) of its advertisement.
If a company spends $100 on an ad campaign that generates 10,000 impressions, the CPM is $10.
12. Lead Generation
This measures the number of potential customers (leads) generated through marketing activities.
A company participates in a trade show and collects contact information from 50 potential customers.
13. Net Promoter Score (NPS)
This measures the willingness of customers to recommend a company's products or services to others, based on a survey question.
If 60% of surveyed customers are promoters, 30% are passives, and 10% are detractors, the NPS is 50 (60% - 10%).
14. Average Order Value (AOV)
This measures the average amount a customer spends per order during a specific time period.
If a company generates $5,000 in revenue from 100 orders, the AOV is $50.
15. Churn Rate
This measures the percentage of customers who stop doing business with a company over a specific time period.
If a company starts with 200 customers and loses 20 customers during a month, the churn rate is 10%.
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