6 KPIs and metrics to improve your business

February 5, 2020 in Advertising Knowledge



6 KPIs and metrics to improve your business

Measuring
results is the key to make your business grow and fix in real time any
performance problem your company might face.

But first of all, what is a KPI?

KPI means
Key Performance Indicator, so it is a metric that tells if your business is
going in the right direction related to your business goals.

So, this
mean that there is not a general rule, but depends strictly to your business
goals and in your industry.

As the main characteristic of Inbound Marketing is its measurability, we need this KPIs to understand if our business is one the right path to reach the goals that have been set at the beginning.

And so,
what is a metric?

A metric is
it an indicator of a specific process, and it is not related with business
goals, in the sense that is not referring to the achievement of that specific
goal. We should use metrics to calculate results for specific process or actions.

Let’s take into consideration some very useful metrics and KPIs that any business should use.

Sales Growth

Any
business or company is selling something; from a product or a service to
experiences, anything can be sold. So, why not start to measure your marketing
strategy health from your sales growth?

How much of your revenues are coming from the marketing efforts you are spending in your marketing campaign? You need to find the right marketing channel that is boosting your sales and focus on that; even if is not going to be easy, is going to be for sure rewarding for your company.

To
calculate the sales growth, use this formula:

(Total sales
revenues for a year) – (Total revenues generated by customers acquired through
Inbound Marketing)

Cost per Lead

This metric is calculating how much you are spending to convert a cold contact into a lead.

Dividing your total expenditure for the number of leads you received during your campaign, you will know how much every lead cost you. Just remember that a lead is just a first contact’s information, i.e. a customer that took a first interested step towards your brand; you need to work on the lead to convert it into a loyal customer.

Website traffic to Website Lead Ratio

Basically, this metric helps you to understand if your website is converting and acquiring leads in a proper way. How to measure it? Easy, just divide the number of your website visitors for the number of acquisitions you got. This will give you the ratio on how good is your website at collecting leads.

Leads to Customers Ratio

As we said
before a lead is not a customer, so in this second part of the previous metric
we are going to calculate how many of our leads become actually real customers.
This metrics gives you an idea of how good are your leads, talking about
quality, and as well how as well how your sales team is working. Of course, to transform
a lead into a customer can be taking into considerations many factors and
sometimes may have even personal reasons behind. But if we are starting with quality
leads all this process is surely going to be much easier and less tiring.

There is consistency between your advertising content, your website or landing page information and your call to action?

Sale Team response Time

This metric is really useful to supervise on the work of your sales team. Why you need to have qualified leads if your sales team is not ready to process it fast? Do you know that leads are quickly losing quality over time? To get in touch with a lead after two days is not professional and is not a good sign of efficiency of the sales team department.

Landing Page Conversion Rate

If you are collecting leads with a landing page through PPC campaigns, you should definitely check this metric out. What is wrong with your page and why it is not receiving any contact request? You should try to test your page, changing small parts to test them and to see if they are reflecting your message. Trial and error is the key for everything, every time.

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