It’s no secret that marketing automation can help your company save time and money, but it can be hard to know where to start.
Without the right KPIs (Key Performance Indicators) in place, you could be wasting time and money on marketing automation tools that don’t produce results.
Without them, you’ll be unable to:
- Track your Return on Investment (ROI),
- Determine whether or not your marketing automation tools are producing results,
- Analyze whether or not you’re meeting your goals and objectives, and
- Decide which marketing automation tools are working best or worst for you
A failure to track even a single one of them might result in a decrease in ROI and potential revenue.
So, to ease things up, I’ve put together a list of 13 essential KPIs that will help you make the most of your marketing automation investment.
But first, try to understand what KPIs are and why they’re so important.
Contents
What is a KPI?
A KPI or a Key Performance Indicator is a metric that measures how well your company is doing.
It can be anything from the number of sales you make to the amount of money you make in profit.
KPIs are supposed to help your company figure out how it’s doing, where it is going wrong, and what changes are necessary.
What are the benefits of using KPIs?
The biggest advantage is:
They make you more efficient in your work
They give you a benchmark for performance so that when something goes wrong you can see why and fix the problem before it becomes too detrimental to business.
It also means that you can track progress over time which helps when making future projections.
KPIs really do help companies become better at their jobs because tracking data makes them think about their objectives on a regular basis instead of only thinking about these things when reporting for an annual review or tax form.
Let’s start with measuring the first category of marketing automation KPI, which is:
1. Customer metrics
Marketing automation is mostly considered a middle-of-the-funnel tool, ideal for converting people into your customers who are already aware of your brand.
One of the most important KPIs for any business using marketing automation is customer metrics.
Since this metric also falls relatively at the bottom of your sales funnel, it can also be one of the most profit-focused metrics.
This metric will help you identify how well your marketing campaigns are performing in terms of acquiring, retaining, or prospecting new customers.
Important customer metrics include:
1.1. Marketing qualified leads (MQLs)
Marketing qualified leads (MQLs) are the number of leads that have been identified to become potential customers in the future, based on certain criteria.
MQLs have generally gone through a marketing process that includes a lead generation form or quiz, followed by lead nurturing, and have been deemed a good fit for the company’s products or services.
Why is measuring MQLs important?
By measuring MQLs, you can:
- Determine whether your marketing campaigns are successful or not.
- See which channels are most effective and focus your efforts on those channels while removing others.
- Identify bottlenecks in the sales process and fix them.
- Fine-tune your marketing campaigns to achieve better results.
- Benchmark your company against others in your industry.
1.2. Customer acquisition costs
The money required to convert an MQL into a customer is referred to as customer acquisition cost (CAC).
A few key steps that are involved in converting an MQL into a customer through the use of marketing automation are:
- Identifying and targeting potential prospects that can become your ideal customers
- Creating and delivering content that’ll persuade them to become customers
- Setting up systems that will track and manage customer interactions and engagements
- Customer onboarding and support
Finally, you need to continuously assess and improve your marketing campaigns so as to increase the conversion rate of prospects into customers.
Why is measuring CAC important?
It can help a company to identify areas where it may be able to:
- Save money on marketing,
- Identify which marketing channels are most effective, and
- Optimize marketing automation campaigns for better results
1.3. Customer retention rate (CRR)
Another important KPI that every business should consider tracking is its customer retention rate — the percentage of customers (active or not) who stick around with your company over time.
It’s an effective way to decide if you’re doing things right in attracting new clients while also keeping existing ones satisfied enough not to switch to a competing business.
Why is measuring CRR important?
Measuring customer retention rate is important because it can help a business decide if they:
- Are doing things correctly in keeping existing customers satisfied
- Need to focus on improving customer experience/satisfaction or attracting more new customers
- Should make changes in their products or services
1.4. Customer lifetime value (CLV)
Customer lifetime value (CLV) is a metric used to calculate how much a customer is worth to a business over the entire duration of their relationship with that business.
CLV takes into account not only the current value of a customer but also the potential future value of that customer.
This metric is important for businesses to understand in order to make informed decisions about how to best invest in customer relationships.
2. Engagement metrics
Engagement is a measure of how interested and involved people are with your brand.
It can be used to determine how successful your marketing campaigns are and how well you’re connecting with your audience.
Few engagement metrics include:
2.1. Social media engagement
Social media engagement measures how interested and involved people are with your content on social media. It can be:
- Shares, comments, likes, saves,
- Direct messages and replies,
- Link clicks,
- Video watch hours, etc.
Why is measuring social media engagement important?
It can help you:
- Determine how well you’re connecting with your audience
- Identify which content is most popular with your audience and what topics they’re most interested in
- Measure how many new people you’re reaching each day
2.2. Inbox hit rate
Your overall inbox hit rate is the percentage of emails that made it to your subscribers’ inboxes.
Some emails reach the inboxes of your subscribers, while others are filtered into spam or junk folders and still others will bounce.
Further reading: What are Spam Reports and How to Reduce the Spam Report Rate
A higher inbox hit rate means you’re doing a better job at delivering email to your subscribers, who are now more likely to read what you have to say.
Why is measuring inbox hit rate important?
Some businesses believe that measuring the inbox hit rate is not an important metric, but there are several reasons why this metric is essential.
A few reasons include:
- If you send a lot of emails and only a small percentage of recipients open them, then you need to rethink your strategy
- If a high percentage of subscribers never open your emails, then it might be time to remove them from your list
- If you get poor open rates, your content isn’t valuable to your audience and they’ve marked your emails as spam
2.3. Open and click-through rate (CTR)
Open rate measures how much your subscribers are actually opening your emails, while click-through rate measures how much they’re clicking your links within the email.
Most marketers agree that higher open rates are better since it means you have better audience engagement.
But higher CTRs are typically tied to campaign success as well — email clients use them to determine which messages to highlight in inbox displays.
Further reading: Resending Emails for Better Results: How to Do It Right
Why is measuring open and click-through rate (CTR) important?
They help you to:
- Measure the effectiveness of your A/B testing
- Determine how interested your subscribers are in the content of your emails
- Make changes to those emails that are not performing well
- Determine the effectiveness of your subject lines, send times, inbox hit rate, and content materials.
2.4. Bounce rates
The bounce rate is the percentage of visitors who leave your website after viewing only one page.
If you want people to stay on your site, you need to give them what they’re looking for when they come in.
And when possible, help them out with relevant suggested posts, ads, and other content that match their interests and your blog content too.
Further reading: Bounced Emails – Hard Bounce vs. Soft Bounce
Why is measuring bounce rate important?
Measuring bounce rate is important to:
- Measure how effective your website is at engaging users
- Determine if users are finding what they are looking for on your website
- See if users are leaving your website after visiting only one page
- Make necessary adjustments to your website in order to keep users engaged
2.5. Site Traffic
You should also get an increase in web traffic if your emails or social posts are converting.
Check out how much more traffic your email marketing or social media campaign is bringing than before you implemented it to see whether it’s worth time and investment.
Why is measuring site traffic important?
Measuring this metric helps to:
- Determine which channels (apart from organic) are driving traffic to the website
- Measure how much organic traffic is generated from search results vs. email and social campaigns
- Track the website’s overall performance over time
2.6. Unsubscribe Rates
Unsubscribe Rates are the number of people that unsubscribe from your email list divided by the total number of people that subscribed to it.
I know this seems like a strange way of measuring success, but let me explain why it’s not.
The unsubscribe rate tells you how many people want to be on your email list and how many people don’t.
If they want to be on your email list then you’re doing something right then you should replicate and scale that.
One way to reduce your unsubscribe rates is by focusing on the quality of emails you’re sending.
If your emails aren’t well-written and don’t follow copywriting fundamentals, you’ll get nowhere.
To avoid this, you can take the help of GPT-3 based email writers or use the help email newsletter writing services of a professional copywriter who will put the final touches on your campaigns.
Why is measuring unsubscribe rates important?
It’s important to check the unsubscribe rate regularly in case there is a problem with your:
- Email content,
- Email list, or
- Your deliverability
In order to rectify any issues before they become serious.
3. Revenue metrics
Just like your mom always said, “it’s important to keep track of your expenses”.
Otherwise, you’ll never know if you’re making a profit!
Some money metrics you can use to see how much bang you’re getting for your buck with marketing automation are:
3.1. Return on investment (ROI)
ROI is a calculation that is used to determine how efficient an investment is.
It’s based on how much money you earn relative to the amount of money that you’ve spent.
This KPI gives you control over your profit and allows you to budget more efficiently for future campaigns; it’s like having a money fairy with a really good aim.
Why is measuring ROI important?
Measuring ROI helps you to:
- Track the success of your marketing campaigns and make necessary adjustments
- Identify which campaigns are profitable and which ones need to be tweaked or phased out.
- Determine how much money you should be spending on marketing campaigns.
- Decide whether or not to continue allocating resources to a certain marketing campaign.
3.2. Total revenue generated
Total revenue generated is the total amount of money that a company has earned through its operations.
This includes all revenue streams, such as product sales, service fees, and other forms of income.
Why is measuring total revenue generated is important?
Measuring total revenue generated is important because it:
- Provides a snapshot of how a company is performing financially.
- Helps companies track their progress over time, and identify areas where they need to make adjustments
- Helps to determine the most profitable products and services your company has
3.3. Repeat Customer Revenue (RCR)
Repeat customer revenue is the term used to describe the revenue that a company earns from customers who have made more than one purchase.
This type of metric is important for companies because it helps to create a base of loyal customers and lower their marketing efforts thus increasing the customer lifetime value.
Why is measuring RCR important?
A few reasons why tracking this metric is useful is that you can:
- Indicate the stickiness of a product or service
- Prioritize customers for retention marketing efforts
- Identify which customers are most likely to repurchase
- Track the progress of customer loyalty over time
By earning repeat business from customers, companies can improve their profitability and sustainability.
Are you tracking these 13 marketing automation KPIs?
One of the most important things you can do to ensure your marketing efforts are successful is to measure what’s working and what isn’t.
The 13 KPIs I shared in this post should be at the top of your list for tracking, but there may be some that aren’t on here that will work better with your business model or audience demographic.
Some of these KPIs are easier to track than others.
Depending on what tools you use for your marketing automation efforts, each tool has its own way of tracking this data—most offer free trials like we do so that you can test our product for yourself!
Which KPI mentioned above do you think can be the most beneficial in increasing sales for your business?
