We are living in an age of data. It’s fairly established that when we are able to measure something, we are most likely to focus a bit more on that thing. As the adage that Peter Drucker made famous goes, “What gets measured gets managed.”
There is a lot to be said, however, about important things in marketing that cannot be measured and, more importantly, that not everything that we measure actually matters (and can sometimes hinder more than they help).
Marketing as an industry is obsessed with data and that means you often get flooded with a ton of metrics, that not only confuse non-marketers but also get in the way of even experienced marketers from using the data to quickly make good decisions.
If you’re trying to get a more birds-eye view on the impact of your marketing strategy, what are the Marketing KPIs (that is “key performance indicators”) that you should be looking at? Let me try and help make this a little clearer for you.
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What are the KPIs that small businesses should be using to determine marketing success?
Today I’m going to go through the top-level metrics that you should be watching as a business owner to see whether your marketing activity is successful or not.
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What are KPIs?
A KPI means a Key Performance Indicator and what that means is it is a metric that you’re using to measure to tell you whether your marketing is working well.
KPI is kind of a very generic term it can be used to refer to the whole business, it can be used to refer to a particular team member, to a particular project, to a particular department. So while KPIs can be generic, what we’re going to talk about in this article is the KPIs for marketing.
We’re not going to go into each individual channel or anything like that because the KPIs will change according to your channels. So instead of thinking about individual marketing metrics, I want you to think of groups of metrics that matter to your marketing and making sure that you have visibility across the marketing funnel.
The Five Different Levels of The Marketing Funnel
There are five different levels to the standard marketing funnel. This is not my invention this is basic marketing. Top level is Awareness, then you go down to Consideration, then you go down to Conversion, then you go down to Loyalty, then you go down to Advocacy.
Let me just run you through very quickly what each of these steps means.
Awareness is when people don’t know about your busines and you’re just trying to get them to understand who you are or find out that you exist.
Consideration stage is when people have found out you exist and now, they’re comparing you against competitors, comparing you against other services, and deciding whether they actually even need your service or not.
The third stage Conversion, when they’ve taken an active action to be involved in your business and done something that your business benefits from.
The next level is Loyalty. This is where they stay with your business, they buy again from you, and they continue buying from you when they have their need again.
And the last stage is Advocacy, taking it that step forward and talking about you – talking you up to other people and recommending your product or service to their network.
The Three Parts of the Funnel to Have KPIs For
Now why I’m going through this funnel is it’s important that that you look at this and that you have marketing KPIs across this funnel. I wouldn’t say you necessarily need metrics at every single stage of this funnel I think there are three groups that you need to pay attention to.
The Marketing KPI Group
The first is Awareness and Consideration stage. This is what I would actually say is “Marketing”. This is the stage where you’re trying to make sure that people find out about your business, that they find out about how your product or service satisfies the wants, needs, fears, and frustrations of your target person.
And so, these metrics – the metrics that you want to measure at Awareness and Consideration stage – are things like traffic and views and clicks.
The metrics that are about people seeing your product.
And this will change according to the channels you’re using. Like I’ve said there’s no specific metric that I can tell you is the most important – usually it’s something like traffic or users on something like Google Analytics. But basically, what I want you to think about is what are the metrics about them seeing my product or business.
The Sales KPI Group
The next level down is Conversion and this group, Conversion, which is on its own I think that is what we call “Sales”.
It has a very subtle difference from marketing. It needs to cooperate, it must come together, which is why I think that a content-led marketing strategy makes sense because content needs to be the thread through this funnel.
But the conversion stage is sales and I think sales is the most well defined when it comes to metrics. If you talk to any salesperson, they’ll tell you that they’ve worked very hardcore with metrics – much more than marketing level, because the marketing can be a bit more ‘fuzzy’.
Sales usually is very well defined – you’ve got purchases, you’ve got sign-ups, you’ve got memberships, you’ve got very specific things that you can measure that indicate that someone has taken an action with your business.
It is very clear when someone has taken an action with your business. It’s less clear when someone sees your business and what effect that has. Sales is super clear. Those metrics should jump right out at you.
The Customer Relationship Management KPI Group
The last group is Loyalty and Advocacy and I group these two together into what I would call “Customer Relationship Management”.
What you’re looking at here are metrics that are about the people who have already bought from you, continue to buy from you, and continue to feel a part of the community that you’re creating with your product or service.
This could be things like up-sells and cross-sells. It could also be things like responses and comments from people who are existing customers. It can be number of testimonials you receive, and things like that.
I would also say that at this level you might also be looking less at delivery-led metrics and more like activity-led metrics.
Result vs Activity Metrics
That last bit that I was saying is an important thing to define, I think. What I’ve been talking about in this video so far have been performance metrics or delivery metrics right – they’re the results. The results that you want for your business. But these are not the only KPIs that you have.
Your KPIs can also involve activity metrics.
So, going back to the funnel, your Awareness and Consideration campaign could have lots of activity metrics – things like number of blog posts you’ve put out, or number of social media posts you’ve put out, or number of billboards you’ve signed up for, or flyers you’ve dropped.
With the Conversion stage activity metrics can be things like number of sales calls you’ve made, or number of sales meetings you’ve had, or number of products that you’ve put up on the website. These are things that you can do but not necessarily the result.
But like I said at that Loyalty and Advocacy stage there might be a lot more activity metrics here. There might be things like sending out thank you letters to people, it might be wishing your customers a happy birthday on their birthday, it might be making sure that you’ve sent out feedback requests and a feedback follow-up request.
Activity metrics are also really important to consider because sometimes you can’t measure the result. You don’t know what effect is. But what you can measure is the activity and you can keep doing the activity to make sure that you’re maximizing the result even if you can’t measure it.
I hope that’s a little bit helpful in trying to figure out what metrics and KPIs you need in your business. It’s going to be super customised to your business. It’s going to be really important that you sit down and really think about what matters in your business and what metrics are important in the activities you’re doing.
If you need any help with it at all please feel free to get in touch, I’m happy to have a discussion with you even if you can’t afford to have me actually working on it for you.
Otherwise enjoy the rest of the videos on my channel and I hope to see you in another one.