Last month we offered tips on how to calculate marketing ROI when you deploy a multichannel marketing approach and must account for multiple customer touches that all contribute to a sale.
This type of ROI measurement can be complex. For instance, multiple decision makers and influencers might have a say in the customer purchase decision. In addition, the sale cycle can be long, which can delay revenue recognition—an essential data point in this calculation. Also, you have to assign a weight, often expressed as a percentage contribution, that reflects the importance of the different marketing programs that helped a customer make their buying decision.
If a lack of data, resources, or expertise makes this approach to ROI unrealistic for you, try using Key Performance Indicators (KPIs) as a gauge of marketing success. As you may already be familiar, KPIs are measurable values that demonstrate how well you are achieving key business objectives. KPIs can be used on their own, or in conjunction with revenue-based ROI calculations for a deeper and richer understanding of overall marketing results.
KPIs are used frequently in many facets of a business, from operations to finance to marketing. KPIs support strategic business goals and objectives.
When brought into the context of marketing, here are some examples of what marketing KPIs might look like:
- Revenue from marketing programs
- Qualified leads
- Marketing-originated customers
- Marketing costs per acquired customer
- Brand awareness
- Thought leadership
Once you determine which marketing KPIs are relevant to your team (based upon your short-term/long-term strategic goals and the current stage of growth or product cycle you’re in), you can then assign the appropriate metrics to determine KPI value. Think of metrics as tactical measurements associated with your selected KPIs. These tactical measurements are typically associated with the specific advertising programs or channels you may be considering, often with external platforms or publications you are partnering with.
Listed below are popular Biocompare marketing channels, examples of KPIs supported by those channels, and appropriate metrics used for tracking. We’ve also included associated ROI calculations in case you may be interested in tying revenue and costs to specific channels. Biocompare provides regular reports to clients on the metrics that are important to KPI tracking.
Banner Ads
- KPIs supported: Increased brand awareness, growth in top-of-funnel leads.
- Relevant metrics: Impressions, click-through rate (CTR), number of lead form conversions if using gated content on your website.
- ROI calculations: Cost per click, cost per lead generated.
eNewsletter Sponsorships
- KPIs supported: Increased brand awareness, growth in top-of-funnel leads.
- Relevant metrics: Impressions, click-through rate (CTR), number of lead form conversions if using gated content on your website.
- ROI calculations: Cost per click, cost per lead generated.
Video
- KPIs supported: Increased brand awareness, thought leadership positioning, content distribution
- Relevant metrics: Number of views, average view time (drop-off point/retention/bounce rate), click-to-action if link provided in video, likes and shares, SEO ranking.
- ROI calculations: (Campaign Revenue – Campaign Video Costs) / Campaign Video Costs.
Application Notes
- KPIs supported: Increased brand awareness, thought leadership positioning, content distribution.
- Relevant metrics: page views, time on page, bounce rate, click-to-action if application note includes links, SEO ranking.
- ROI calculations: (Product Revenue – Application Note Costs) /Application Note Costs.
eBlast
- KPIs supported: Increased brand awareness, growth in top-of-funnel leads, thought leadership positioning.
- Relevant metrics: Page views, time on page, bounce rate, click-to-action if eBlast includes links, SEO ranking.
- ROI calculations: (Product Revenue – eBlast Costs) /eBlast Costs.
Product Directory Listings
- KPIs supported: Growth in sales-ready leads.
- Relevant metrics: Page views of product page, click-throughs to your website, sales opportunities from referral traffic, conversion of leads to sales.
- ROI calculations: (Product Revenue – Product Listing Costs) /Product Listing Costs.
Webinars
- KPIs supported: Increased brand awareness, thought leadership positioning, growth in top-of-funnel leads.
- Relevant metrics: Number of registrants, number of attendees, average time viewed, drop-off rate, conversion into subsequent drip campaigns.
- ROI calculations: Webinar cost per lead gained.
While each of the above channels has KPIs associated with it, more sophisticated marketing programs have innovative KPIs that combine results from multiple marketing channels.
Examples:
- KPI for Marketing-Originated Customers (determining the total share of all new customers that were introduced to the company through marketing efforts). The greater the share, the more your marketing investments are contributing to overall customer growth.
- KPI for Customer Acquisition Marketing Costs (applying an average marketing cost for each new customer). The lower this figure is, the more efficient your marketing investments are, and the less your marketing is spending to gain a new customer.
One beneficial aspect of these two KPIs is that you will have the data to take a retrospective view of performance. For instance, if you were to go back in time for six months, a year, or two years to calculate Marketing-Originated Customers or Customer Acquisition Marketing Costs, you would have a clear view of these strategic benchmarks across time and set plans on how you may be able to improve each.
It is never too early to get started on measuring your marketing investments in more meaningful ways. KPIs can be essential to those efforts.