There are fundamental ingredients to great marketing, such as creativity, a tightly-planned strategy, and of course, the time and resources to make it happen. But if you’re missing the vital element of measurement, your potentially wasting a lot of money in the process of pushing these campaigns out the door.
In a nutshell, measurement helps you understand how your marketing efforts are working. It can determine which channels and platforms are delivering value to your business—and give you the chance to tweak or test ideas to ensure you're achieving the highest ROI possible. But according to ITSMA and Vision Edge Marketing, 74% of marketers can't measure or report how their efforts impact their business. We're here to help dispell the myth that measurement is hard to truly achieve. In fact, with the rise of digital marketing, measurement has steadily become easier than ever before.
But what’s the right approach to campaign measurement? And what KPIs matter? With full-funnel marketing, the focus is on the buyer’s journey and everything they do, from becoming aware of your brand to eventually making a purchase—and this is reflected in three core sections of the funnel. As such, each stage comes with its own unique metrics, so here are the best KPIs to consider.
Top of the Funnel (TOFU): Awareness
This is the initial stage of the buyer’s journey where a prospect is looking for information to meet a need or solve a problem. They’re not quite ready to buy yet, but whether your marketing activities are organic content-focused or use paid advertising, they’ll need to position your business as the solution. Metrics at the top of the funnel should include:
Website traffic (visits)
By using an analytics tool like AdRoll to monitor how many visitors your website racks up over a certain amount of time, you can learn where they’ve come from and what they’re interested in. To dig deeper, you might want to look at analytics such as average page views per visitor or time spent on site. This can help you understand how you’re currently attracting and converting your potential customers.
The higher your bounce rate is the less likely it is that your target customers are sticking around to make a purchase. Bounce rate measures the percentage of visitors who immediately leave your site after only visiting one page. There are no hard and fast rules regarding the best rates as they differ according to industry, but lower percentages—between 20-40%—are phenomenal for any site.
This measures first-time visitors to your website and can establish the type of marketing activities that are attracting new audiences.
Social media reach
As social media offers the benefit of interacting with your current and future customers, tracking the growth of your followers or likes on social platforms is essential to understanding the effectiveness of your marketing.
Middle of the Funnel (MOFU): Consideration
At this stage, the prospect has moved from not knowing anything about your business to becoming engaged with your brand by demonstrating purchase intent. Metrics at this stage of the funnel will often include the following:
Marketing-qualified leads generated
Whether you’re offering a whitepaper download, a webinar, an email sign up, or another marketing offer, generating leads through form-fills on your site is a great way to capture email addresses of higher-intent prospects.
Email open rate
Email marketing is often the foundation for middle-funnel activities—but you’ll want to assess how much of your audience is opening your emails. This KPI can also help you adjust the style and nature of your emails so you can improve engagement.
Click-through rate (CTR)
When running a paid campaign, the CTR is the percentage that indicates how many people saw your ads and liked them enough to click through to your site. This metrics is a great measure of how attractive your ads are to potential customers.
Cost Per Acquisition (CPA)
This metric lets you know how much you’re currently spending to acquire a new customer. At this stage of the funnel, an acquisition could be as simple as a lead generated (e.g. someone completing your contact us form) or it could be something like a demo request. Regardless, it can show the effectiveness of your current ad spend. If your CPA is too high or rises, you should reconsider the type of ads you’re using in your campaign.
Cost Per Click (CPC)
Cost Per Click is just that: the cost of each click on your ad. Unlike your traditional display ads, this metric is usually best for understanding performance on platforms where people like to click—such as search engines like Google or Bing.
Conversion rate is all about which clicks pave the way to conversions. Monitoring this will help you understand how your marketing campaigns are performing, while also alerting you to any potential issues that could pull your overall strategy off track.
Bottom of the Funnel (BOFU): Decision
To win new business, or upsell current customers, the bottom of the funnel is the most important part of the journey. To see how you’ve engaged and motivated these tangible sales, here are the bottom-of-the-funnel metrics you should keep an eye on:
Sales revenue growth
It goes without saying, the amount of sales you’re making will indicate the effectiveness of your marketing efforts.
Customer Lifetime Value (CLV)
This is the amount of revenue a customer has brought in over the duration they’ve done business with you. Like CPA, it tells you how much each of your customers is worth and if your marketing efforts are contributing to the success of the business. To work it out, multiply the average length of time a customer spends with you by the average money spent over that period of time.
Increase in ARPA
Besides closing new customers, the bottom of the funnel is also where marketers should focus on increasing the value of their current accounts. One metric that plays into this is the average revenue per account or ARPA. Take a look at your ARPA throughout the duration of your bottom-of-the-funnel marketing campaigns. If this number is steadily increasing then you’ll know your efforts are being put to good use.
Return on Investment (ROI)
ROI helps to assess how your business is performing so you can plan your budget accordingly. The formula to calculate your ROI is sales growth minus marketing investment, divided by marketing investment. Or:
(Sales Growth – Marketing Investment) / Marketing Investment.
As a marketer, using measurement metrics might seem like a load of extra work—but it’s important to track what’s meaningful and appropriate for your business, so you know how your ad dollars are being spent. That way, you’re putting yourself in the best position to improve your marketing efforts—and fundamentally, get more bang for your buck. Interested in developing your measurement further? Sign up for a free AdRoll account now and receive a comprehensive dashboard that can assess performance across each stage of the sales funnel.
About the AuthorMore Content by Elliott Moore