Performance Indicators for Marketing: What you need to know and why

Performance Indicators for Marketing: What you need to know and why
Last Updated: March 4, 2024

According to Gartner, marketing performance indicators are the precise, quantitative marketing KPIs that track advancement toward a specified objective inside marketing channels. You need to track the correct data and closely monitor marketing performance indicators since you need to make hundreds of daily decisions to drive people and projects forward. Understanding what is and isn't working for your business is easier with marketing key performance indicators.

Related: Performance Indicator Sample: A Guide to Performance Indicators with Sample Examples

Why Do Performance Indicators for Marketing Matter?

Performance Indicators can show the success or failure of a strategy


Although marketing can be unpredictable, marketers can utilize metrics to determine whether a campaign has been successful rather than relying on trial and error to indicate success. Incorporating insights from a B2B internet marketing agency can enhance the precision and relevance of these performance indicators, offering tailored strategies that align with specific business-to-business dynamics.

Related: KPIs and metrics: Everything you need to know

Marketing performance indicators provide key customer insights

Performance Indicators for Marketing may provide vital details about your prospective consumers, including their routines and behaviors, the best channels to use for contact, and the most effective messaging for turning them into paying clients.

Marketing performance indicators give you valuable data

Your marketing department would have to base choices on proof that there were performance indicators for marketing. Instead, marketers may utilize metrics and analytics to better guide marketing decisions by tracking the appropriate data. Performance indicators give marketers quantitative information to base decisions on current information rather than assumptions or gut instincts. This data-driven approach produces marketing strategies that are more successful and efficient.

Related: Example Key Performance Indicators

How to choose the right Performance Indicators for Marketing

Your company differs from others, so your performance indicators for marketing should be too. While it's simple to look at what other businesses in your industry deem important, it's best to measure what makes the most impact on your marketing strategy. You must answer several questions, such as "What does your business aim at? What are your objectives and goals?

Your chosen performance indicators should be relevant to your business objectives and align with your growth stage. It should be quantifiable, measurable, and actionable. The most crucial step is to start. Later on, you can always change the KPIs you're monitoring and revise your objectives as appropriate. To simplify things, we have compiled a list of common performance indicators for marketing that you can track as a starting point.

Related: A Guide for Developing Key Performance Indicators

Performance Indicators for Marketing

Lead Conversion Rate

Lead conversion rate shows you the percentage of leads who become customers. It calculates the percentage of leads that take the desired action, such as purchasing, signing up for a service, or becoming a paying client. It is calculated by dividing the new customers by the leads generated in a given period.

Customer Acquisition Cost

This is the cost associated with obtaining a customer. It involves the expense of persuading a potential customer to purchase the good or service offered by your business. This performance indicator is crucial since it aids in establishing crucial financial decisions. To calculate customer acquisition costs, divide all sales and marketing costs by the number of new customers gained within a specific period.

Organic traffic

Organic traffic is the volume of visitors to your website from unpaid search engines like Google, Bing, or Yahoo. In 2019, organic traffic made up 53.3% of all website traffic, compared to paid search's 15% share, according to a survey by BrightEdge. It is a useful resource that typically accounts for more than half of the total traffic to your website. The main goal of digital marketing is to increase the number of people who view and visit your website, so one of the most crucial performance metrics for marketing to consider is organic traffic growth.

Related: Key performance indicators by functional area

Customer Lifetime Value

Customer Lifetime Value is the revenue one customer has given your business and will continue contributing. Understanding customer lifetime value enables you to make decisions based on how long a typical customer stays a customer of yours and how much money they spend during that relationship. This measure can help you determine how to approach best client acquisition, customer retention, customer service, and product and service quality. This is a useful metric to compare to Customer Acquisition Cost. If your Customer Acquisition Cost is higher than your customer lifetime value, then you're probably spending too much money acquiring your customers without much return.

Lifetime Value of Customer = Average Lifetime of a Customer * Average Purchase Amount * Average Number of Purchases in a Year

Net Promoter Score (NPS)

Net Promoter Score (NPS) is a loyalty measure that is used in marketing to measure the degree of satisfaction of a customer. It is obtained by carrying out a survey asking, "On a scale of 0-10, how likely are you to recommend [company/product] to a friend or colleague?". Customers are divided into Promoters, Passives, and Detractors based on their responses, and NPS is the difference between the percentage of Promoters and Detractors.

  • Promoters (9–10): Loyal supporters who will likely spread the word about your company and bring in new clients.
  • Passives (7-8): Despite being pleased, these clients are not loyal to your company and could quickly move to a rival if a better offer comes.
  • Detractors (0–6): Disgruntled clients who could harm your company's reputation and expansion through unfavorable word-of-mouth.

The NPS score can help brands determine new strategies for business growth, customer retention, and gaining new customers.

Related: Key Performance Indicators: A Guide for Managers

Search engine rankings

A 2022 survey by SMA Marketing revealed that more than 60% of internet shoppers do online research on a product or service before making a purchase choice. This shows how crucial search engine ranking is in marketing. Search engine optimization (SEO) rankings reflect a website's online presence. Consumers may click on the websites that appear first in the results after entering a keyword in a search engine. Understanding how to use targeted keywords in your website content will help you raise your website's search engine ranks and attract more visitors.

Churn Rate

Churn rate is the opposite of the customer retention rate and measures the percentage rate at which customers leave a business over a given period. It is calculated by dividing the number of customers who discontinue a service during a specified period by the average total number of customers over that period. Over the years, the churn rate has grown. The average churn rate for subscription businesses climbed from 27% in 2020 to 32% in 2021, according to a recent Recurly report. Numerous causes, including increased competition, customer choice, and the emergence of subscription weariness, are probably to blame for this trend. Businesses should constantly monitor their churn rate and develop mitigation strategies.

Customer retention

The customer retention rate measures the percentage of customers who remain with a company over time. Customers who are pleased and satisfied are more likely to be loyal and make repeat purchases, as shown by a high customer retention rate. Customer satisfaction has a significant impact on customer retention, hence it is crucial. Additionally, it lessens the work required to consistently reach out to new clients, which can enhance the effectiveness of your advertising and play a significant role in your economic plan.

Click-through Rate

The click-through rate calculates how many times an advertisement is clicked. It reveals a lot about the effectiveness of your advertisements and company. Your advertisement must be appealing and convincing, depending on your services. This is possibly the most crucial factor to consider if you want people to click on it and maintain a high click-through rate over time.

Website Traffic to Website Lead Ratio

According to Hubspot, 29% of marketers use a website to attract and convert leads. Website traffic to lead ratio means the percentage of visitors that come to your site into actual leads in any given period.

Hubspot claims that 29% of marketers utilize websites to draw in and convert leads. Said website traffic to lead ratio refers to the percentage of site users who become genuine leads over a certain period.

Social Media Engagement

Social media plays an important part in marketing. Engagement is one of the key KPIs for social media. According to Hubspot, social media is the top channel marketers exploit, with over 42% of marketers using it. Likes, shares, remarks, messages, tags, and mentions could be tracked. Any interaction a lead or customer has with you qualifies as engagement. You may evaluate the effectiveness of your social media posts by tracking engagement.

Ultimately, performance indicators for marketing are crucial since they allow you to assess your progress as a marketer. The main objectives of marketing are client acquisition and revenue growth for businesses. Your team may achieve this by monitoring, analyzing, and improving those indicators.

Chido Madzogo
This article was written by Chido a Consultant at Industrial Psychology Consultants (Pvt) Ltd

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