women looking at important marketing KPIs

key performance indicators
that every marketing
manager should use

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visual representation of 3 important marketing KPIs: Bounce Rate, Average Session Duration and Average Pages per Session

Bounce Rate and Average Sessions Duration

Do your visitors find what they are looking for?

The bounce rate, average session duration and average pages per session are important marketing KPIs to measure whether your visitors found what they were looking for. What you don’t want is for them to backtrack and click on the back button after arriving on your page. It comes down to if your visitors stay on your site or if they “bounce.” Your bounce rate is the percentage of visitors who leave the site from their entry page without viewing another page. Using bounce rate and how long visitors stay on average on your website (average session duration), you can understand what your audience is searching for and whether you are providing the right content. An important question to ask, is do your call-to-actions match your content?

Performance Indicators

If you understand what drives your visitors to stay on your site, you can improve the “quality” of your website traffic. The goal is to decrease your bounce rate steadily over time while increasing average session duration and pages per session.

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charts displaying goal conversion rates over time per marketing channel and campaign

Goal Conversion Rates

How well are you hitting your business objectives?

A conversion is a desired action made by a visitor and this varies from business to business. Different parts of your website should have different conversion goals, and this matters when you track how well you are hitting your objectives. One goal of your blog might be to sign up readers to your newsletter, another could be to measure the latest white paper downloads and in turn how this could lead to free trial sign ups. Start by defining your individual goals, and then begin to track the conversion rate of each channel. Compare conversions to bounce rate to session duration to get an understanding of what works best. High conversion rates usually correlate to lower bounce rates and more pages per session as well as higher average session durations.

Performance Indicators

Define specific targets for your different conversions and compare these for different marketing channels / campaigns to identify the channels with the highest goal conversion rates.

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charts displaying landing page conversion rates

Landing Page Conversion Rates

What pages and content are performing best?

It’s critical to know how successful each individual page of your website is, and to replicate that success elsewhere. For instance, are you receiving more sign ups from your white paper or from your blog? How do the pages look and feel, more importantly, how does the content vary? It makes sense to have a top ten best and worst performing pages report. By tracking this marketing KPI and what works and what doesn’t, you’ll be able to optimize your content strategy. It’s important to mention that this kind of comparison works best when the goals of your pages are the same. In this scenario, you can A/B test different designs, languages and Call-to-Actions to make sure you’re getting the highest conversion rates.

Performance Indicators

Compare similar pages on your site and experiment to find out how you can reach the best conversion rate. Understand the conversion rate of pages with the same goals and be mindful of your industry’s benchmark.

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chart showing CTR over time for different marketing channels and keywords

Click Through Rate (CTR)

Are your ads and content resulting in attention?

Click Through Rate (CTR) is the marketing KPI to start with when measuring the success of many different online marketing activities, like Google Adwords, Facebook Advertisement or your organic rankings in Google. CTR refers to the ratio of clicks to the total number of impressions (how often your advertisement or content shows up). When it comes to paid advertising for example on Google Adwords or Facebook, it is important to optimize the CTR as it influences your quality and relevance score, in turn this impacts your cost per click (CPC). Additionally the CTR of your organic rankings within the Search-Engine-Result-Pages (SERPs) are an important ranking factor as well. CTR is a marker to track the success of your email marketing campaigns, too.

Performance Indicators

Find the average CTR for your industry and use it as a benchmark. For paid advertising, compare the CTR of different ads for the same keyword phrases and for organic CTR’s compare different titles and meta descriptions to improve your CTR steadily.

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chart displaying different important marketing kpis: clicks, CTR, CPC and CPA

Cost Per Click (CPC)

Are you getting the most bang for your buck?

Cost Per Click (CPC) is the most common pricing model when it comes to online advertising, and is standard with Google Adwords, Yahoo Search Marketing or Yandex Direct. In this model you pay a fixed click price each time someone clicks on your ad. CPC is also common when it comes to affiliate marketing, which is a type of performance-based marketing in which a business rewards affiliates for each visitor or customer brought by the affiliate’s own marketing efforts. CPC is more popular than other models like Cost per Thousand (CPM), where you pay a fix price for 1000 Impressions, since you aren’t aware of how many clicks will result out from those impressions and therefore the CPC is harder to predict.

Performance Indicators

CPC is important to track, and the goal should be to decrease the CPC steadily over time, which mostly should result in lower costs for an acquisition.

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line charts showing cost per acquisition by different marketing channels

Cost Per Acquisition (CPA)

Are your Customer Acquisition Costs viable?

Cost per acquisition is an online advertising pricing model, where advertisers pay a stated price for acquiring a new customer. It’s also often used in the affiliate marketing (described above) and has the advantage to being even more performance based then the CPC pricing model. This is because you only pay for new customers as opposed to website visitors. The price of the CPA can either be fixed or can be based on the revenue the new customer will generate. CPA is often used to compare the customer acquisition costs (CAC) of the different online marketing channels. To calculate CAC you divide the total costs of all acquisitions by the number of new customers in a certain time period. With this marketing metric, you can compare how viable each channel is for acquiring new customers.

Performance Indicators

Compare your Cost per Acquisitions through different marketing channels and calculate how much you are willing to spend for one new customer.

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area charts showing the development of customer life time value over time

Customer Life Time Value (CLTV)

Are your new customers profitable in the long-run?

The CLTV is one of the most important marketing KPIs, because with this KPI you can control how much money you are willing to spend for a new customer (CPA). You can calculate it by subtracting the cost per acquisition (CPA) from the average revenue per acquisition, which refers to the total amount of money you actually made from one new customer. For example if you spent on average 80$ for a new customer and they produce on average 130$ of revenue over there whole lifetime, your CLTV or profit per acquisition would be 50$. These marketing metrics are really useful when you compare different marketing campaigns and channels to identify your most profitable online marketing activities and determine where your marketing dollars should go in the future.

Performance Indicators

The higher your CLTV the more sustainable is your business. It helps you to identify ineffective online marketing activities where you spent more money for a customer than he is worth it.

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visual representation of return on investment for different marketing channels

Return on Investment (ROI)

How efficiently are our spending your marketing dollars?

The Return on Investment (ROI) is the holy grail of all the marketing KPIs. It’s most often to compare the efficiency of an investment or to compare many investments. To calculate the ROI you divide the Profit/Benefit of the investment by the total costs of the specific investment and display this ratio in a percentage. For example if you did an E-Mail-Marketing campaign, which cost you 8000$ and you made 10000$ revenue out of this campaign your ROI would 25%. For Online Marketers this KPI is especially useful to compare the ROIs of different marketing channels or campaigns to spend their marketing budget on the channels / campaigns, which have the highest ROI.

Performance Indicators

The higher the ROI the better. A high ROI displays that you spend your marketing budget effectively. Identify with this marketing metric the worst and best performing online marketing campaigns.

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