Are you planning a new marketing plan? Does your marketing and sales strategy need to be supported by measurable actions? Do you want to assess the impact of a project? Would you like to optimize the performance of your marketing actions?
So you have to ask yourself: are the measurement methods you're using today appropriate?
Contents
Choosing the right marketing KPIs according to the marketing value chain
Before going into the details of how to choose the right marketing KPIs to measure and optimize the performance of your actions, a definition is in order.
A KPI is a key performance indicator - a metric for measuring the performance of a marketing action or strategy against clearly defined objectives.
Depending on its marketing strategy and customer experiencet, each company will define its own KPIs. This choice will depend on the company’s objectives and the marketing value chain
To help you make the (right) choice of your KPIs, after presenting the KPIs for measuring customer satisfactionIn this article, you'll find examples of KPIs used throughout the marketing value chain.
1. Know your market positioning
- Market share enables us to situate a company within its market. It can be measured in both value and volume.
- The market penetration rate measures the market coverage of a service or product. This indicator can be used to assess market potential and adapt corporate strategy. For example, the company may choose to place greater emphasis on acquisition, differentiation from competitors, or loyalty building.
- The analysis of your competitive position represents the place a company occupies in its market: leader, follower, specialist, newcomer, outsider... Determining competitive position often involves strategic analysis. These include Porter's 5 forces model, which helps to understand competitiveness within a sector, and/or SWOT analysis.
- The analysis of your brand equity shows the added value of what the company offers compared to a generic equivalent. Brand equity can be assessed across a number of dimensions, such as: brand awareness, brand loyalty, the attributes your customers associate with your brand, perceived quality, etc.
2. Design and launch an offer
When designing and launching a new offer, it's important to pay attention to certain marketing KPIs that will validate its profitability. Easily quantifiable for the company, payback, break-even point, contribution margin or margin per channel are essential to know. A little more abstract, willingness to pay is nonetheless essential for pricing.
- Payback estimates the time required to obtain a return on investments made. This indicator gives an initial idea of the profitability of an investment.
- The break-even point corresponds to the sales volume or turnover at which a company, product or service becomes profitable. As a complement to payback, it provides a clearer picture of the profitability of all types of investment.
- The contribution margin also sheds light on profitability. The unit cost is subtracted from the unit price to give a positive or negative contribution to financing fixed costs.
- The margin per channel represents the margin achieved by each sales channel, and helps to clarify distribution choices. Depending on the nature of your business, segmenting this margin by other dimensions (customer type, product, geography...) may prove more relevant.
- Willingness to pay refers to the maximum price a customer is willing to pay for a product or service. Several factors can influence this price, such as brand image, quality, a trend, etc.
3. What KPIs should you track when launching marketing campaigns?
- The reach rate, also known as reach, represents the percentage of users exposed to the ad at least once during the campaign. This rate can be used, for example, to measure the relevance of the media or platforms used in a marketing campaign.
- Repetition, also known as impression frequency, is the number of times a person is exposed to the campaign. Repetition contributes to the memorization of the product or service.
- The click-through rate analyzes the activity of recipients who have consulted the e-mail. This indicator offers a more in-depth analysis than the open rate in measuring the level of interest aroused by a campaign.
- Return on marketing investment (ROMI) determines the profits generated by a marketing action. It thus makes it possible to prioritize marketing expenditures and justify those that have a positive impact on company performance.
4. Drive acquisition and sales with relevant marketing KPIs
To effectively manage acquisition and sales, certain KPIs around the lead life cycle and, conversely, abandonment, are interesting to track. Visualizing the number of leads generated, the conversion rate of visitor-leads, the abandonment rate and quantifying the CAC all help to optimize marketing and sales strategy. Acquisition opportunities, on the other hand, are better measured by sales pipeline, price elasticity and percent good value.
- The number of leads generated represents the number of prospects or potential customers with a (more or less) proven interest in the offer. Among other things, this indicator can be used to assess the impact of a marketing action or campaign, and give an indication of potential future sales.
- The visitor-to-lead conversion rate, or transformation rate, is a measure of a company's effectiveness in collecting data from visitors and getting them interested. The visitor enters the conversion funnel and moves towards purchase.
- The abandonment rate corresponds to the percentage of orders initiated but not finalized (abandoned baskets). An in-depth analysis of the abandonment rate at different stages of the sales funnel is essential to optimize the customer journey and conversion rates.
- The cost of acquisition per customer (CAC) makes it possible to compare the profitability of certain channels and/or campaigns. For a profitable and sustainable business, this indicator should be lower than the Customer Lifetime Value (CLTV), detailed in the family of indicators for measuring customer loyalty.
- The sales pipeline photographs sales opportunities. It brings together all the stages in the sales tunnel.
- Price elasticity shows the capacity of demand to react to a change in price, whether up or down. Different from willingness to pay, on which this indicator can have consequences, the important thing here is to measure evolution.
- The percent good value shows the ability of demand to react to a price change, whether up or down. Unlike willingness to pay, on which this indicator can have an impact, the important thing here is to measure evolution.
5. Customer experience and customer satisfaction also have their own marketing KPIs
The performance of the customer experience and satisfaction improvement planst can be assessed using several metrics. The NPS, complaint rate, and website bounce and exit rates provide insight into satisfaction and dissatisfaction—and thus into the success of the customer experience.
- The Net Promoter Score (NPS) measures a customer's propensity to recommend a brand. For example, the NPS can be used to classify consumers into 3 categories (detractors, passives, promoters), to better guide the actions to be taken.
- The bounce rate represents the percentage of Internet users who have visited a website and left it without consulting any other pages. This indicator testifies to the quality of the user experience (both in terms of content and form) on your site, and will help you optimize it.
- The complaint rate indicates the proportion of dissatisfactions leading to a complaint out of a total number of sales or interactions. Paying attention to their reasons and importance is crucial to reducing dissatisfaction.
- Exit rate refers to the percentage of cases where a specific page on a site was the last page consulted by the visitor before leaving the site. Analyzing this page and its content is crucial to retaining the visitor's attention.
6. What marketing KPIs are needed to measure customer loyalty?
- Customer Lifetime Value (CLTV) represents the profit generated by a consumer over the entire duration of the commercial relationship. CLTV therefore defines the maximum acquisition costs to be assumed, depending on the type of prospect.
- The re-purchase rate illustrates the percentage of customers who have made at least one new purchase ("re-purchase") over a given period. This indicator is thus a measure of consumer satisfaction with a product, and of consumer loyalty.
- The churn rate represents the percentage of customers lost - i.e. who stop buying and/or using a company's products or services - over a defined period (often a month or a year).
- The average basket expresses the average amount spent by customers. An increase in the average basket over time may indicate that consumers are more inclined to spend more, either because of an increase in their purchasing power, or because they perceive greater value in the products or services offered by your company.
7. Relevant marketing KPIs for measuring brand impact
Measuring the impact on the brand is particularly important when evaluating the effectiveness of marketing and communication strategies. Concepts such as brand awareness, top-of-mind awareness, and brand attributes can be assessed by surveying a sample. The number of unique visitors to the website also provides insight into this area.
- Brand awareness refers to the proportion of the population familiar with the brand.
- Top of mind" is the percentage of people who cited your brand first in a spontaneous awareness question (e.g. "Could you name a payroll management software?"). It measures the percentage of people who place your brand first in their minds.
- Brand attributes refer to the particularities, characteristics and specific features that are perceived to characterize the brand.
- The number of unique visitors represents, as its name suggests, the number of (unique) individuals who have logged on to a website or application. It can be used to evaluate the attractiveness of a website or application, or the referencing of a page.
How can iQo support your marketing and customer experience strategy?
By using the right marketing KPIs, companies can not only measure their current performance, but also identify areas for improvement and make informed decisions to ensure long-term success in their competitive marketplace.
iQo works with you to develop an optimal customer strategy and effective marketing plans. We have particular expertise in defining marketing, growth, and customer retention plans; in scoping out customer service transformation and customer experience initiatives; and in optimizing marketing campaigns and the customer journey. We’re also recognized for training teams in marketing performance and, on a more operational level, for supporting teams to maximize sales conversion rates.
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- Customer-focused transformation.
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