There’s no lack of data to track.
Marketers don’t struggle with not having enough data. They struggle to pull the insights from the data already provided.
To help guide you, let’s dive into the big picture of business conversion metrics to help you determine the best KPIs to track.
Revenue is the lifeblood of all businesses. It’s the total amount of money your business brings in. Your gross revenue is everything before expenses.
Revenue is the common thread that holds sales and marketing teams together. Raise your hand if you’ve heard the good ol’ saying, “Marketing doesn’t drive revenue. Sales does.”
When the marketing and sales teams align, it only benefits the bottom line.
How to track:
To track revenue, you can set-up ecommerce tracking in Google Analytics.
2. Conversion Rate
Conversion rate is the amount of visitors who have completed a goal on your website. The higher the conversion rate, the more successful your marketing campaigns.
WordStream did a study on the average conversion rate per industry stating that the average conversion rate across all industries is 2.70 percent on search networks.
Conversion rate is often tied to conversion rate optimization (CRO) which is marketing tactics like A/B testing to optimize a web page.
How to track:
To measure your conversion rate, use this formula:
Conversion rate = (conversions / total visitors) * 100%
For example, if your website had 100,000 visitors and 5,000 conversions last month, your conversion rate is 5 percent.
3. Leads Generated
Lead generation is when you attract and convert potential users interested in your company. A lead starts at the beginning of the buyer’s journey.
Lead generation is vital to success. But, to get leads you need to get traffic.
For example, ClearPivot increased monthly website traffic by 330 percent which resulted in a 57 percent increase in lead generation.
And, CSI Accounting and Payroll, increased traffic by 300 percent and saw new contacts spike to 625 percent.
How to track:
To track lead generation, I recommend setting up goals in Google Analytics. Treva Marshall goes into details about how to set up these goals.
4. Cost Per Acquisition
Cost per acquisition (CPA) is the price you pay to acquire a new customer. It’s similar to conversion rates, but with CPA, you can directly measure the impact of marketing on revenue.
If you’re using CPA for Google Ads, generally your CPA will be higher than your cost per click.
Many companies use CPA as a determining factor for their campaign direction.
Take OSN, for example. They reduced their cost per acquisition by 82 percent using Google Ads Call-Only campaigns.
And, Ebates reduced their cost per app registration by 56 percent.
How to track:
To calculate cost per acquisition, follow this formula:
Total marketing costs (MCC) / Total customers acquired (CA) = CPA
5. Order Value
Average order value (AOV) is the average dollar amount spent each time a customer orders. It is the sales per order, not per customer.
Increasing your AOV is much easier than attempting to increase your conversion rate. Why?
It’s much easier to convince a current customer to buy from you than it is to gain a new customer.
Just look at Boxed. Boxed, an online wholesaler of bulk product, used Facebook Ads to see a 14 percent increase in AOV.
How to track:
To track average order value, follow this formula:
Revenue / Number of Orders = Average Order Value (AOV)
For example, if I order three dogs bandanas that cost $10 each, my AOV is $10.
6. Customer Loyalty/Retention
Customer retention rate is how long a business keeps its paying customers over time. Harvard Business Review found that costs companies about 5-25x more to gain a new customer than it does to sell to an existing one.
Peter Drucker once said:
“Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation.”
The point is, revenue doesn’t care where it comes from. Loyal customers spend more money and convert.
That’s why we’re seeing loyalty programs take center stage.
Virgin Atlantic’s Flying Club members earn 50 percent more points on flights. Plus, they have access to expedited check-in.
Amazon Prime members spend an average of $1,500 per year on Amazon.com. That’s compared with $625 per year spent by Amazon customers that are not Prime members.
How to track:
Customer churn rate is the best way to measure customer retention and loyalty. It gives you hard data to understand if your customers are happy or not. If you have a high churn rate, most likely your product or service doesn’t meet the needs of your customers.
Intercom uses churn rate to predict future problems in their funnel.
The email marketing folks at ConvertKit calculate churn rate like this:
Lost quantity / Number of “x” at the beginning of time = Churn
7. Lifetime Value (LTV)
Lifetime value is the revenue your business makes from a customer.
Venture capitalist, David Skok, says “the biggest reasons startups die is because their Customer Acquisition costs vs their Customer Lifetime Value costs often look like this.”
Netflix is a perfect example lifetime value. The average Netflix subscriber stays with them for 25 months. That’s a lifetime value of $291.25
How to track:
To calculate LTV, use this formula:
LTV = Average Revenue Per User (ARPU) x 1/Churn
Essentially, this formula will predict how much money you’ll make in a specific period. So, if it costs you $200 to acquire a new customer, you should create a plan to make $200 back from that customer.
ROI stands for Return on Investment. It’s a way for marketers to prove that marketing does impact the bottom line of the company. It’s also a good way to determine what to spend your marketing budgets on.
However, there are challenges to calculating ROI in marketing. Why? Because what you spend $5 on today may not bring a return for 5 years.
According to The CMO Survey from Duke University’s Fuqua School of Business, only 37 percent of CMOs feel they can prove the short-term impact of marketing spend.
How to track:
To track ROI, use this formula:
(Gross Profit – Marketing Investment) / Marketing Investment
For example, if you buy $100 worth of Facebook ads, then end up getting $200 back in sales, your return on investment is 100 percent.
ROAS means Return on Ad Spend. Essentially, it gives marketers an idea if they spend X on this advertising campaign then you’ll receive X back in increased revenue.
As a general rule of thumb, think about a positive ROAS like this: for every $1 you spend, you should get $3 back.
However, depending on your industry, you may have different numbers.
Nielsen analyzed more than 1,400 ad campaigns from 450 CPG brands over 10 years. They discovered different ROAS across categories with baby products generating the biggest return on spend at $3.71.
How to track:
To calculate ROAS, use this formula: (Revenue – Cost) / Cost
For example, if you spend $5,000 on Google Ads and earned $10,000 from those who clicked on your ads, then your ROAS is ($5,000 – $10,000) / $5,000 equals 1, meaning 100 percent.
10. Media Mentions
Whether it’s a positive review or something not-so-sweet, tracking your mentions is part of maintaining your brand reputation. It gives you valuable feedback to your brand, product, or company.
If you’re a big company, you’re probably mentioned in the press naturally quite often. If you’re smaller, a mention could lead to a potential partnership or opportunity.
If you’re getting started, Brittany Berger, previously Head of Content and PR at Mention, suggests “monitoring your social media handles, your company name, and your website.”
How to track:
I would recommend you track your mentions monthly. You can automate a report with a tool like Moz, BuzzSumo or SEMrush Brand Monitoring.
You can also use tools like HootSuite (paid and free versions available) and Tweetdeck (free) to monitor your social mentions. These tools are good to use to track competitors also.
11. Total Traffic
Total traffic gives you a bird’s eye view of the health of your website. It’s the big picture.
You can begin to track patterns to see if there’s a drop off during a specific day of the week or spike throughout the year.
How to track:
To measure total traffic, login to Google Analytics > Acquisition > All Traffic > Channels.
12. Email Subscribers
Your email subscribers are your bread and butter for any company. They are often the most engaged users.
Email had a median ROI of 122 percent — that’s more than 4x higher than social media, direct mail and paid search.
Just look at The Kewl Shop. They grew their ecommerce revenues by 22 percent in 12 months with email marketing.
Or, learn how Milk It Academy saw 187 percent increase in revenue from new email subscribers.
As you can see, increasing your email subscribers can lead to higher sales.
There are many email tools you can use to track your email list growth. At SEJ, we use MailChimp. But, there are many others like Aweber and Drip.
How to track:
If you want to track where your email subscribers are coming from, you can create form submissions in Google Analytics.
Just head over to Behavior > Events > Overview. Under the Event Category column, click on Form. Here, you can view the number of impressions and conversions. Then, click the Event Action.
13. Branded Searches
Branded searches are keywords that include your brand name or a variation of your brand name. For example, In-N-Out, In-N-Out Burgers, In-N-Out fast food, etc.
Branded searches are known for their high conversion rates.
Tom Demers, Co-Founder & Managing Partner at Measured SEM and Cornerstone Content, analyzed 50 companies to find that branded searches were worth $171 million per month.
And, Tom Capper, Senior Consultant at Distilled, published a case study on Moz to show that branded search volume is correlated to organic search ranking in Google.
I would say that’s worth the effort.
How to track:
To track branded searches, you can measure branded search impressions through Google Search Console.
If you’re getting impressions, that means people are searching for your branded terms and may help you understand what’s working and what’s not with your marketing efforts.
Also, I would recommend tracking direct traffic in Google Analytics. If people are typing your domain name into the search bar, it means people are looking for you.
Lastly, you can run a PPC campaign for your branded keyword terms to gain more accurate impression data.
Reviews are your businesses social proof.
There’s proof that consumers trust each other more than they trust brands. BrightLocal found that 85 percent of consumers trust online reviews as much as personal recommendations.
This is why we’re seeing an emergence of Yelp, Google+, Facebook, and Angie’s List type of marketing strategies.
Bazaarvoice proved that 50 or more reviews per product can mean a 4.6 percent increase in conversion rates.
To monitor reviews, you can use tools like YOTPO, TrustPilot, BrightLocal, BirdEye, or ReviewTrackers, to name a few.
How to track:
With a negative review on the first page of Google, there is going to be a loss of revenue.
Harvard Business Review discovered that a one-star increase in Yelp rating leads to a 5-9 percent increase in revenue.
Ryan Erskine, Senior Brand Strategist at BrandYourself, shares his formula for calculating a bad Yelp review.
% Lost Revenue = (5 – Star Rating) * .07
So, if you have a 3 star rating, you’re 2 stars away from 5.
3 * .07 = 0.21
That’s 21 percent of lost revenue.
15. Net Promoter Score
Net Promoter Score (NPS) measures customer loyalty with a single question.
On a scale of 0-10, how likely is it that you would recommend our company?
It looks something like this.
Based on the score they give you, they are bucketed into three categories:
- Promoters: 9-10.
- Passives: 7-8.
- Detractors: 6 or below.
Many companies use NPS to learn from their customers. For example, Mention cut their churn rate in half in two months with NPS surveys.
And, Airbnb found that customers who an NPS score of 10 were 13 percent more likely to rebook another stay.
Now, the million dollar question: What is a good NPS score?
In a perfect world, your NPS score would be 100. But, that’s not reality. A good NPS score depends entirely on your industry. To gauge your NPS score for your industry, head over to NPS Benchmarks.
Here is a look at some of the top companies and their NPS:
- Tesla: 97
- Southwest Airlines: 62
- Amazon: 61
- Google: 50
- Microsoft: 34
- United Airlines: 10
There are many tools to use to begin gathering your NPS score. Groove uses Delighted. HootSuite uses Wootric. And, Zapier uses Promoter.
How to track:
To calculate your NPS, subtract the percentage of Detractors from the percentage of Promoters.
(% of Promoters) – (% of Detractors) = Net Promoter Score
So, if 60 percent of respondents were Promoters and 30 percent were Detractors, your NPS is a score of 30.
Featured Image: Paulo Bobita
Screenshot: Taken by author
Next Chapter 12 Social Media Engagement KPIs That Matter
Category Content Marketing Analytics
- Sales Growth. ...
- Leads. ...
- Return on Investment (ROI) ...
- Lifetime Value of a Customer (LTV) ...
- Customer Acquisition Cost (CAC) ...
- Conversion Rate. ...
- Open Rate. ...
- Revenue growth.
- Revenue per client.
- Profit margin.
- Client retention rate.
- Customer satisfaction.
KPIs measure performance based on key business goals while metrics measure performance or progress for specific business activities. KPIs are strategic while metrics are often operational or tactical.What are the KPIs for conversions? ›
- Number of conversions.
- Conversion rate.
- CPA (cost per acquisition)
- Conversion value.
- Conversion ROI.
- Sales funnel metrics.
- Customer Satisfaction,
- Internal Process Quality,
- Employee Satisfaction, and.
- Financial Performance Index.
Types of KPIs include: Quantitative indicators that can be presented with a number. Qualitative indicators that can't be presented as a number. Leading indicators that can predict the outcome of a process.What is a good KPI? ›
Good KPIs: Provide objective evidence of progress towards achieving a desired result. Measure what is intended to be measured to help inform better decision making. Offer a comparison that gauges the degree of performance change over time.What is your KPI interview questions? ›
How can I set meaningful KPIs and performance measures? How do I turn intangible goals into SMART goals you can meaningfully measure? Where can I find example KPIs and performance measures for my industry/business? How do I align KPIs to strategy and cascade throughout the organisation?Which can be most important 10 KPI for an event? ›
- Event Check-ins. This key metric directly indicates the number of attendees who have checked in at the event. ...
- Event Surveys. ...
- Net Promoter Score (NPS) ...
- % promoters – % detractors = NPS. ...
- Active Community Members. ...
- Messages Sent. ...
- Speaker Engagement. ...
- Session Analytics.
Examples of Metrics
Key financial statement metrics include sales, earnings before interest and tax (EBIT), net income, earnings per share, margins, efficiency ratios, liquidity ratios, leverage ratios, and rates of return. Each of these metrics provides a different insight into the operational efficiency of a company.
- Sales Metrics.
- Marketing Metrics.
- Financial Metrics.
- Human Resource Metrics.
- Project Management Metrics.
- Product Performance Metrics.
- Other Important Business Metrics.
- Break-even point. ...
- Net income ratio. ...
- Monthly recurring revenue. ...
- Leads, conversion and bounce rate. ...
- ROI and ROAS. ...
- Customers. ...
- Employee satisfaction.
The conversion rate is a crucial KPI not only for your PPC campaigns but also for your website and landing page performance. Here's all the information you need about this KPI, what it is, why it's important, how to calculate it, and way more!How do you measure conversion? ›
Conversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period. For example, if you had 50 conversions from 1,000 interactions, your conversion rate would be 5%, since 50 ÷ 1,000 = 5%.How do you increase conversion rate metrics? ›
The most well-known way to optimize your CRO is to leverage A/B testing tools. If you have enough traffic, you can send some traffic on landing page A and landing page B and have metrics to know which page converts best. For most companies, this is the most efficient method to get better results.How do you write a clear KPI? ›
- Step 1 – Identify your organization's strategic objectives. ...
- Step 2 – Define the criteria for success. ...
- Step 3: Develop key performance questions. ...
- Step 4- Collect supporting data. ...
- Step 5: Determine what to measure and how frequently you should measure. ...
- Step 5: Develop the KPIs.
A KPI should be simple, straightforward and easy to measure. Business analytics expert Jay Liebowitz says that an effective KPI is one that “prompts decisions, not additional questions.” For example, “How many customers did we add this quarter?” is clear and simple.What is KPI in job description? ›
Key performance indicators (KPIs) are measurable values that determine how effectively an individual, team or organization is achieving a business objective. Organizations use KPIs to help individuals at all levels focus their work toward achieving a common goal.What are KPI tools? ›
WHAT ARE KPI TOOLS? KPI tools are a business reporting solution used by companies to track, monitor, and generate actionable insights from key performance indicators specific to the company's business objectives to achieve sustainable business development and, ultimately, profit.What are KPIs for employees? ›
Key Performance Indicators (KPIs) are metrics that can assist in tracking the ability of your employees to meet your expectations as well as their impact on the business objectives.
Many companies recognise the value of KPIs (key performance indicators), but not everyone has implemented SMART (Specific, Measurable, Achievable, Relevant and Time-Bound) KPIs for their employees. SMART KPIs provide clarity in terms of performance expectations and progress.How do you set KPIs in your team? ›
- Check their position description and adjust if necessary.
- If they don't have a position description, write them a good position description.
- Identify 5-7 key areas of responsibility.
- Sum up the main reason why you have that role in your business.
Key Performance Indicators (KPIs) are the elements of your plan that express what you want to achieve by when. They are the quantifiable, outcome-based statements you'll use to measure if you're on track to meet your goals or objectives. Good plans use 5-7 KPIs to manage and track the progress of their plan.Is a conversion rate a KPI? ›
The conversion rate is a crucial KPI not only for your PPC campaigns but also for your website and landing page performance. Here's all the information you need about this KPI, what it is, why it's important, how to calculate it, and way more!How do you measure conversion in marketing? ›
Conversion rates are calculated by simply taking the number of conversions and dividing that by the number of total ad interactions that can be tracked to a conversion during the same time period. For example, if you had 50 conversions from 1,000 interactions, your conversion rate would be 5%, since 50 ÷ 1,000 = 5%.What are some key indicators for a high low conversion rate? ›
- Unique and Returning Visitors. ...
- MQL to SQL Ratio. ...
- Email Marketing Performance. ...
- Bounce Rate. ...
- Cost Per Conversion. ...
- Time Spent On Page. ...
- Points of Entry (and Exit)
To determine a conversion rate, divide the number of goals achieved in a given time frame by the total number of visitors to your website, then multiply that number by 100. So if your landing page had 16,982 visitors and of those, 3,604 took a desired action, then your conversion rate is 21.22%.What is a good conversion rate? ›
What's a good conversion rate? A good conversion rate is above 10%, with some businesses achieving an average of 11.45%. Earning a good conversion rate places your company in the top 10% of global advertisers, which makes your conversion rate two to five times better than the average conversion rate.What does KPI mean? ›
What is a KPI? KPI stands for key performance indicator, a quantifiable measure of performance over time for a specific objective. KPIs provide targets for teams to shoot for, milestones to gauge progress, and insights that help people across the organization make better decisions.What are the benefits of tracking conversion metrics? ›
- Improve ROI. Do you know exactly how much each one of your customers costs your business before they become a sale? ...
- Improve Campaign & Promotion Efforts. ...
- Better Allocate Your Digital Marketing Budget. ...
- Improve Website User Experience. ...
- Convert More. ...
- Experiment, learn and grow:
Third-party signup bypassing. Many businesses request customers to create customer accounts on their sites. One of the best ways to do this is by asking your audience to sign up using another account such as Google or Facebook. Opting for this type of customer account registration boosts your conversion rates even more ...What are metrics in business? ›
Business metrics are quantifiable measures used to track business processes to judge the performance level of your business. There are hundreds of these metrics because there are so many different kinds of businesses, with many different processes.How do you calculate conversion metrics? ›
All you have to do is divide the number of conversions you get in a given time frame by the total number of people who visited your site or landing page and multiply it by 100%. For example, if your site had 17,492 visitors and 2,305 conversions last month, your conversion rate is 13.18%.Which KPI is used to increase sales conversion? ›
The ultimate goal of any marketing campaign is, of course, to increase sales. This means that tracking trends in sales revenue is a vital marketing KPI – and one you shouldn't lose sight of.How do you increase conversion rate metrics? ›
The most well-known way to optimize your CRO is to leverage A/B testing tools. If you have enough traffic, you can send some traffic on landing page A and landing page B and have metrics to know which page converts best. For most companies, this is the most efficient method to get better results.How do you increase conversion rate? ›
- Use a CRO planner.
- Shorten your forms.
- Include social proof.
- Track how people interact with your site.
- Add live chat.
- Test your offers.
- Conduct A/B testing.
- Increase trust and remove friction.
The first thing to remember when calculating conversion rate is to focus on getting eyes onto the particular webpage you're calculating a conversion rate for. By increasing the denominator in the conversion rate equation, you will in turn, by correlation, increase the numerator as well.Is conversion rate the most important metric? ›
The conversion rate is the most important metric that enables you to measure the profitability of your business. It can foretell whether your business has a bright future or not.What is a conversion analysis? ›
Conversion analysis is a method of tracking your website visitors' actions to see whether they do what you hope they will—convert—or drop off. A conversion analysis can help you identify which kinds of customers and which types of actions correspond to conversion, as well as when and where users fail to convert.