A Guide to Building the Best Marketing KPIs for Your Team
Set your sales and marketing up for success
Driving sales and marketing success is one of those things you’ll be working on your whole life and still not have all the answers to. No matter how much you learn or how much experience you have, there will always be new things to learn.
Luckily, there are a few foundational concepts that don’t really change with time. Concepts that are central to marketing philosophy and strategy no matter the platform, method, or audience.
In this whitepaper we are going to cover one of those: key performance indicators, or KPIs.
What is a KPI?
KPIs act as the scoreboard for your sales and marketing efforts. They are the standards you measure against, and your metrics for success.
KPIs are statistics and data points that help set a metric for performance and achieve business objectives. For sales and marketing, they are the metrics that guide and inform your performance and strategy. Without KPIs in place, all of your sales and marketing efforts amount to shooting in the dark. You could be doing amazing and you wouldn’t even know it. Or you could be missing just one key insight that would drive more sales, but you’d be none the wiser.
KPIs take the guesswork out of your sales and marketing and replace it with the reliability of mathematics. Each KPI is a function of the others, and in this way your KPIs can give you standards to aim for that help you produce stable and repeatable results.
Why should you care about KPIs?
Running sales and marketing without KPIs would be like running your business without finances and resource management. How could you confidently operate your business if you didn’t know your revenue and expenses? That’s what it’s like to run sales and marketing without KPIs.
KPIs give your sales and marketing benefits like:
- Visibility and insight into performance
- Identify of growth and where it comes from
- Easily understand improvement
- Identify hurdles or bottlenecks
- Compare sales and marketing efforts
- Develop strategies based on real data
- Metrics for your team to compare themselves against
Putting the time in to develop great KPIs not only gives better visibility and understanding, it also helps drive innovation and growth. Great KPIs give you a strategic insight that helps maximize your resources and ROI.
Why should you care about KPIs? Because they help you generate more leads and close more sales.
Finding the right KPIs for your team
So we’ve established that everyone needs KPIs. How do you find the right KPIs for your team?
There are two ways to go about it — if you’re starting from scratch, or if you have some past experience to reference.
We’ll help you put together some KPIs for your sales and marketing activities, including:
- Digital advertising
- Social media
Let’s start by looking at marketing.
Marketing is the first step in your lead generation pipeline. Most of your revenue opportunities start at marketing, so developing informed and insightful KPIs here is critical.
All KPIs in marketing should lead to one main KPI: sales qualified leads. Marketing KPIs help you optimize your funnel and cultivate more leads into sale-ready prospects than ever before.
There are several important metrics to your email marketing that help you improve your pipeline, and a few that are good to keep an eye on.
Let’s start with the latter. You don’t need hard KPIs on these, but you do want to keep an eye out for abnormalities in the numbers month to month. These include:
- Successfully sent emails vs size of the whole list
Of these, unsubscribes can be quite important. Generally, .2% is a healthy unsubscribe rate. If it goes above .5%, there is a chance something about your email is causing people to unsubscribe at a higher rate. If this happens, here is a helpful checklist to solve your problem.
- Ensure your emails are sending in the correct format, i.e. no broken images or layout bugs
- Don’t let your subject lines be too click-baity
- A/B test different subject lines
- Try some variants of your email copy
On the other side are the KPIs you want to set some metrics for. These KPIs help tell the story of your email campaigns; whether they were successful and where they fell short. These include:
- Open rate
- Click through rate
Your email open rate is exactly what it sounds like: the number of people that opened your email.
Yeah, we know, brain explosion
Open rates are important when gauging your reach. You want to maximize the amount of prospects you are getting your message in front of, and the first step for that in email marketing is how many people open your emails.
Assuming your emails aren’t landing in spam, open rates are directly related to your subject lines. Higher open rates are because of better subject lines, and better subject lines result in a higher open rate.
Average open rates across all industries fall into the 14-21% range, with some of the highest performers being hobbies and the arts.
So how can you increase your open rates?
Keeping up with your list is a great place to start. Regularly pruning inactive leads means you’re tailoring your list to interested prospects that engage with your content. Generally, an inactive lead is a lead who either hasn’t ever interacted with your emails or hasn’t interacted in 60 or more days. Removing these leads from your main marketing lists help improve your results.
Another clever way to improve open rates is to personalize your subject line with the recipient’s name. Emails personalized this way boast a 50% higher open rate. You can automate processes like these with the right email marketing software.
Keep in mind that character limits in subject lines exist. It’s best to optimize your subject line for mobile, which has a 60 character limit before text is cut off. When writing those subject lines, keep them short and sweet!
One last tip for getting those open rates up is to run an A/B test using marketing automation software. A/B tests let you write two different subject lines and then send them to a portion of your list. After a little competition, a winner is selected and automatically sent to the rest of your list. This ensures that the best subject line is always sent to your list.
Click through rate
Email click through rate is the amount of people who click on a link in your email. This is generally expressed as a percentage of your total list, but can also be expressed as a percentage of your total opens.
Click through rate shows us how well our emails are converting. The main goal of any email is to click. Sometimes, there are other goals after those clicks like form fills or item download, but for emails higher click through rates means better lead nurturing.
Average click through rates fall in the 2-3% range. That means out of every thousand email recipients,
only 20 to 30 are clicking on a link.
That may sound low, but it’s actually great. If you have a list of 10,000 qualified leads, you are getting 200-300 unique clicks on your content. Combine this with an automatic lead ranking system, and you
can cultivate dozens of sales qualified leads a month.
Now if you need strategies to improve your click through rate, there are a lot of them. Improving click throughs is a lot more involved than improving opens. Tactics for improving click through rates fall in three categories:
- List segmentation
List segmentation – Better click throughs starts with organized lists. Segmenting your lists gives you the opportunity to dial in your messaging for each list. It lets you highlight products or services most relevant to your leads, while reducing the chance you’re sending non-relevant info.
Segmenting your list by product/service or where the leads are in your funnel is a great way to drive more
Content – How you write your content can also impact click through rates. For starters, including things like intractable social icons on your emails can lead to increased click through.
Also, the length of your emails has a direct impact on your click through. Ideally, you want to offer your recipients the opportunity to click a link without any scrolling involved. On desktop this is easy, but on mobile you need to find a place for a clickable link early in the email. Often, making the image/video in your email clickable is a great way to do this. You can also add a button with a call to action near the top to give an opportunity for a click.
The last thing to consider about your content is the relevance of it. If you segment your lists like we mentioned above, this is a lot easier. You want every email to be relevant to the recipient’s interest, so make sure you highlight the right products or services based on your list.
Optimization – Last on the list is optimization. Optimized emails need to do several things:
- Avoid landing in spam
- Load all images and formatting
- Work on both desktop and mobile
Avoiding spam is an obvious goal for any email marketer. If your emails are landing in spam, you’re never going to see the opens or the click throughs you want. Avoiding spam is largely accomplished by your email marketing software, but you can also stay away from spam words like “Free,” “Click here,” and other needy or assertive words can help as well.
You also need all of your images and formatting to load correctly. Nothing is worse than an email landing in an inbox but missing all the images and formatting that make it intelligible. Luckily, this is also alleviated by the right email marketing tools. Software can help you layout your email and send it with working HTML code that ensures when it lands in an inbox it looks exactly how you intended.
And finally, make sure your emails look great on desktop and mobile. It can be easy to make a desktop-friendly email that gets your message across and looks great while doing it, but once you translate that to a mobile screen it may lose a lot of its impact.
46% of all emails are opened on mobile devices. What used to be optional is now required if you want your email marketing to success. Mobile-friendly designs and layouts help get that click through rate up.
Social media’s influence on branding and marketing just keeps going. It seems like there is no “bubble” here to pop, so time and innovation has given us the ability to grow our brand and our lead generation by leveraging social media in our marketing funnels.
It’s important to note that there are a lot of social media options for your business, and the first step should be identifying which platforms can offer you the best ROI. We have some content that can help with that, luckily.
Each platform has its own set of metrics that you want to keep track of. Setting KPIs for your social media can be much more daunting than email marketing, but we’ll focus on how to get started from next-to-zero.
For all your social media, the main goal is getting people to go from your social media to your website and take action. B2C purchases can take place on some platforms, but even in that case a conversion on your website often gives you better analytics and remarketing possibilities.
All your KPIs need to lead to the action of clicking on a link and navigating to your website. That means getting more views and interactions is vital to the success of your social media efforts. The most important KPIs across all social media platforms are:
- Follower count
- Click through rate
More followers means more eyes on your posts. For organic social media growth, follow count is one of your most important metrics across all platforms. If you’re starting from zero, just try to gain followers week-over-week. Setting numbers to aim for is difficult and can be different for each industry and geographic location. Focus on gaining more followers each week and you’ll be setting a great pace.
This is the reach of your social media activities. Each post reaches different amounts of people, and many platforms don’t allow your posts to reach your full follow-base without paying for promotion. If you are trying not to spend money for increased reach, be ready to battle it out for about 5% of reach of all your followers. Yeah, it’s rough, but paying for promotion can help drive even more engagement and lets you pick your most valuable posts.
These are your post engagement actions, including likes, shares, and comments. This shows people who view your social posts are doing more than scrolling past — they are reading and interacting with it. On certain platforms, interacting with posts from businesses can actually increase the chance they will see more of your content, which is a great opportunity for you. Aiming for 1-6% interaction of your total follower count is a great place to start with the largest platforms.
Mentions add additional reach to your posts, and are insanely valuable because of that. If someone mentions your business, that means that at least 5% of their followers are seeing your business. This multiplies your reach, which is why so many business run giveaways that require things like follows, shares, and mentions to enter. Whenever you have a special promotion that tries to drive mentions, try to get 5-10%of the followers reached by each post to mention your business.
Click through rate
This is the amount of clicks you get on posts with calls to action. Any link on your posts, including buttons, that are clicked with count toward your click through rate. This is an extremely beneficial action, especially if you need to get your audience on your website to carry out key activities, like forms fills or purchases. Take your total clicks divided by your total impressions and multiply that by 100 to get your CTR percentage.
It can help to treat social media like a separate marketing funnel. It uses different metrics, activities, and strategies to generate leads. Imagine it as a second funnel used to generate leads that can either immediately be transferred to sales or ingested into your mid-to-late funnel marketing.
Digital advertising KPIs are very similar to the KPIs we talked about with social media. Which makes sense, because a lot of digital marketing takes place on social media platforms.
Some of the most popular platforms for digital advertising are:
- Google ads
Many of the KPIs are the same, including impressions, CTR, and conversions. But there are quite a few that are unique to digital advertising, so we’ll spend our time focusing on those.
We’re going to start by focusing on Google Ads because it is the most popular and has the most unique KPIs. The most important KPIs for most businesses using Google Ads are:
- Impressions, including Absolute Top and Top
- Average cost per click
- Cost per conversion
- Interaction rate
- Conversion rate
- Quality score
On Google Search Ads, impressions break into three categories. The first is overall impressions, which we covered in the social media section. This is the number of times your ads are shown to your audience. This number is entirely dependent on targeting and budget doesn’t need a KPI.
Beyond this are Absolute Top Impressions and Top Impressions. Both of these are expressed as percentages. Absolute Top is when your ads are shown as the very first result on organic searches where your ads appear. This number directly impacts your CTR, as ads shown at the top are more likely to generate clicks.
The influence of your ability to be shown as the Absolute Top search result is money. The first spot is the most competitive spot, so it can cost more to get there. Setting a KPI on this is largely dependent on your budget and keyword priority. If you are spending a lot of money on a few important keywords, aiming for a 50%+ Absolute Top Impression ratio is ideal. If your spend is more modest, aiming for 25% to 35% is great.
The Top Impression Rate is the ads that show above organic results. Generally, there are three ad spots above the organic search results, one of which is the Absolute Top spot. That means Top Impressions are when your ads show in the two spots after the very first.
This is still a very beneficial place for your ads to show, as generally people won’t need to scroll to see your ads. It’s also much easier, and cheaper, to appear in these spots. A great KPI to aim for her is the top 25th percentile. Getting 75%+ Top Impression share means that at most, one of every four relevant searches won’t show your ad. If you’re aggressively targeting a certain keyword with a lot of budget, getting closer to a 90% Top Impression Rate is ideal.
Click through rate
Digital advertising click through rate is the same as everywhere else: the number of clicks, divided by impression, multiplied by 100.
CTR KPIs are very dependent on the ad format in digital advertising. To help set KPIs, we’ll organize them by platform and ad type.
Search ads – An average click through rate for search ads on Google is 2-4.5%. Getting above a 2% CTR for many industries is a great place to start.
Display ads – Since display ads are shown so frequently to a less targeted audience, CTRs are much lower than search. A good average CTR is in the 0.3 – 0.5% range.
YouTube ads – YouTube ads are similar to Display ads in targeting methods. A great CTR to aim for is 0.65%.
Across all ad types, Facebook Ads average CTR is 0.9% to 1.3%. Facebook has proven to experience more fluctuations than Google Ads due to updates to their ad platforms. As little as 2 years ago CTRs were average a full point higher.
Instagram operates on a very similar platform to Facebook, which is unsurprising as they are both owned by Facebook. Across the last few years, average CTRs have fluctuated from 0.22% to right below the 1% mark.
Image ads – Single image ads have an average CTR of 0.5%
Carousel ads – Multi-image ads have a slightly lower average of 0.4%
Video ads – Video ads split the difference between the other Sponsored Content ad styles with a CTR of 0.44%
Message ads – This format boasts the highest CTR at 3%
Dynamic ads – A comparatively weak ad type with a 0.07% CTR
Text ads – These ads are by far the weakest ad type on LinkedIn with an average CTR of 0.02%
These KPIs are great starting points for your digital advertising. Keep in mind that CTRs fluctuate quite a bit depending on your industry, so doing some more research on any metrics out there for your industry can get you on the right path for growth.
SQL quota and lead scoring
All of your marketing efforts, from emails to social media to digital advertising, is used to augment your marketing funnel and increase your ability to convert marketing qualified leads (MQLs) into sales qualified leads (SQLs). Your moment of achievement is when you can send that lead over to your sales team.
Setting yourself up with the right KPIs can help stabilize that process and encourage consistent, repeatable success.
Everything we’ve covered up until now helps your high-to-mid funnel marketing efforts, but here we’re going to focus on what KPIs help you power through low-funnel marketing. A lot of what will carry you through late-funnel marketing efforts is list segmentation and an in-depth lead scoring system.
Impactful leads scoring is dependent on attributing correct scores to certain leads activities. In general, there are a few activities that should impact lead score.
- Form fills
- Newsletter sign ups
- Content downloads
- Free trails/demos
- Webinar attendance
- Social media interaction
There are also activities that can help you identify when a lead isn’t actually a lead. Sometimes your revenue generating marketing reaches people searching for a job or simply researching the competition. There are some activities that can help you identify these in your lists.
- Visiting your careers page
- Job titles that don’t have anything to do with your audience
- Competitor companies
Developing an effective scoring system requires attributing a unique score to each of these lead activities. There is some wiggle room in which activities are more important in your funnel, but here is a lead scoring system that most businesses can use as a starting point.
Marketing automation software can help you automatically record and score leads based on customized scores set by you. Each activity is automatically recorded along with it’s score, which allows your sales to to quickly identify their SQLs that need follow up.
Finding the right KPIs for your team
We’ve used a lot of words to talk about averages and best practices and theories behind various marketing activities and their KPIs.
Now it’s time to set some KPIs for your team.
Setting KPIs is easiest when you have past experience you can leverage. Even if you weren’t tracking every single activity we’ve covered here, the experience of your team can help you set some starting KPIs that can be adjusted later.
SQL quota and lead scoring
Step 1. Identify the maximum load of SQLs your sales team can handle
Step 2. Conduct contact research on your list or purchase new leads
Step 3. Set your lead quota taking into account list size and sales resources
Step 4. Assume each MQL will need to take 3-5 actions to become SQLs
Step 5. Plan out your email and social media calendar
Step 6. Develop follow-up emails for click throughs to help generate additional activities
Align with sales
A good place to begin with your marketing KPIs is to identify how many SQLs your sales team can handle on a monthly basis. Theoretically, we all want the most SQLs possible, but in reality our sales teams have a finite amount of time and resources. You need to be sure that even if your marketing is amazing, you’re not overwhelming your sales team with SQLs that they can’t follow up with.
Contact and list research
After you set this number you need to research your lead lists. You will want to set an MQL to SQL conversion rate, but without the right data you won’t be able to. If you have a couple of months’ worth of lead data, you can calculate your MQL to SQL conversion rate by dividing the number of SQLs by the number of MQLs.
Now, if you don’t have this data, you’ll be operating off of averages. Conversion rates vary heavily by industry and lead source.
For instance, leads generated from website form submissions convert to SQLs at a much higher rate than leads from a purchased email list. To get you started, though, aim for 0.5%-1% of your list to convert to SQLs per month. So if you have a 5,000 lead list, 25-50 leads a month is great.
Understand your email pipeline
Another KPI to consider is, on average, how many emails a lead needs to interact with to convert to an SQL. Using the scoring system from before, we can see it would be 20 email opens to have enough points to become an SQL. This is a special circumstance, though.
If you have leads that are getting to that score of 10 only through opens or social media interactions, we recommend keeping them in your marketing pipeline. Opening emails isn’t enough for a lead to become sales-qualified, we want them to take action on a specific piece of information. This helps to guide further marketing as well as the sales follow-up.
When you have leads attaining a 10+ score with only email opens, consider sending them more direct emails focused on topics they’ve opened in the past. This can help get them over the hump.
Creating your email marketing KPIs
Alright, so assuming you need another action other than email opens for an MQL to become an SQL, the average amount of emails you’d need to send is in the 5-12 range. There are times when you’ll get that 10 score even quicker, but it’s best to plan based on an average.
Sending 4-6 emails a month means that fresh leads will need to be in your pipeline at least a month before converting to SQLs on average.
The final step is to calculate possible revenue based on your MQL to SQL pipeline. This is one of the key ways to show the ROI of your marketing efforts, and helps to keep activities in perspective. To calculate your theoretic revenue opportunities, you take your SQLs and multiply them by your SQL to customer conversion rate. Averages for SQL to customer conversion rates range from 15-22%.
With all this in mind, let’s run through an example of monthly KPIs for a services business assuming a consistent list size of 10,000 leads and a new customer value of $2,000.
Setting up your marketing KPIs like this helps to drive realistic and attainable results while always keeping in perspective the real-world value of your teams’ work. What’s great about organizing your KPIs like this is making changes resets all your other KPIs to fall in line with your new metrics.
Leverage your KPIs with marketing automation
Once you have all your KPIs set up, it’s time to get to work.
As setting these various KPIs has shown, marketing is by and large a numbers game. It requires a lot of activity and effort to carry out the necessary processes to hit your KPIs and convert.
A great strategy to help organize your marketing and automate data and analytics, as well as a large part of your email marketing, is to find a suitable marketing automation solution. Marketing software can automatically keep track of your KPIs and all the data tied to them, help you organize and manage your lists, and even create and execute on your email marketing.
If you’re ready for the rubber to meet the road, give GlassHive a try. You can start your free trial today.