Choosing the right key performance indicators (KPI) to track for digital marketing can be tricky for a few reasons. With digital channels providing, in some cases, real-time data, and mountains of it, how do you slog through the offerings to find out what really matters? Too often we see people looking at the wrong metrics. Focusing on “vanity metrics” (data points that don’t impact the bottom line, but make you or your site look good) is an all-too-common scenario.
This is a waste of effort and leads down paths that have no impact on true company goals. Conversely, relying on only a single metric can also be misleading and overly simplistic. We find it best to set tiered goals that all fall within various stages within the buyer’s journey.
What Is A KPI In Digital Marketing and Online Sales?
A KPI, or “Key Performance Indicator” for sales and marketing may look different than KPIs of other departments in an organization. Before we dive too deeply into what a good KPI report looks like or even identifying a good KPI example, let’s define the KPI metric itself.
For the purposes of this article, we’re defining key performance indicators as metrics that either provide actionable insights directly tied to identified goals and/or data that shows a marketer’s general movement toward them. Any KPI that can be directly attributed to marketing and sales efforts are ideal, but can get overly granular, so we also rely on KPIs that provide roll-up insight into performance. For any KPI as it relates to online digital marketing, we need to be sure we’ve properly and effectively identified goals.
Before You Choose A KPI, Know Your Goals
Before choosing which key performance indicators are the right ones to track, you need to identify the core goals of your website. As experts in online marketing for B2B clients, we regularly identify two distinct goal types: Lead Generation, Brand Awareness.
The most common goals are related to lead generation, which in turn equate to closed/won sales. The second-most-common goals center around what is often referred to as thought leadership, brand awareness or building trust, which generally speak to the same need of getting one’s name circulated in the right customer groups.
Depending on the goal of your website, you’ll want to tailor your KPIs to match. We’ve included what we consider to be the most pertinent key performance indicators for each of the two main site objectives.
Goal: Lead Generation
Not all leads are created equal, both in terms of quality and in where the lead is along the buyer’s journey. For example, what we call “bottom of funnel” leads are those who have self-identified as being ready to buy or talk about buying as a final, or near-final, step to either closed/won or closed/lost business. The second type of lead can be described as either “top of funnel” or “middle of funnel.” Either way, the lead garnered is not one that necessarily wants to be “sold” a product or service.
These leads look like someone downloading a spec sheet, white paper, signing up for a newsletter or any other myriad lead points that don’t have the message of requesting a direct connection with a salesperson, as would a bottom of funnel lead.
For lead generation as a proof of success, the KPIs to judge efforts can be deceptively simple, but there’s a lot of information you can gather if you pay attention to the nuance. The main KPI in this scenario is the number of leads over a specific time period.
When comparing the number of leads completed, it’s a good idea to judge them against previous years as opposed to previous days, weeks, months or even quarters within the same year. These items may give you trends, but they won’t necessarily accurately reflect increased success. Many organizations are impacted by seasonality. For example, a logistics organization that moves heavy farming equipment may be busier during the fall and winter when agricultural companies are replacing machines from a recently completed season. Or a consumer goods transportation company may see more business in the months leading up to Christmas and other high-spend holidays as merchants stock up on inventory for the rush.
Judging Q4 numbers against Q1, in this case, may lead to inaccurate decision making. I’ve seen too many good companies use bad or misinterpreted data that lead to disastrous decisions, and improper time-over-time comparisons are often the culprit.
Lead Generation KPIs:
Number of Leads
Counting leads is an obvious metric to track, and for good reason. If your goal is leads you better be tracking them. Though, be sure you’re properly categorizing them. Some people engage in “lead scoring” where you place value to each lead to better understand how valuable or close to close a lead is. While this is the ideal state, starting with actual raw number gathering, overlayed with where the lead is in regards to the marketing funnel, is a good first step.
Remember, a lead is a great goal, but not all leads are created equal. Someone who signs up for an eNewsletter may not be as ready to close a deal as someone who signs up to request a quote. For leads that are nearer the bottom (closer to purchase), you’ll see fewer of them, but they often have a shorter sales cycle, while leads in the middle or top of the funnel have a measurably longer sales cycle and lower lead to close rate.
Leads by Channel
Counting leads is table stakes these days. Knowing that leads are coming in from holistic marketing efforts are great, but they won’t provide exceptional insight. You need to begin to layer in metrics that paint a larger picture. Among these metrics are leads by channel. If you have a 20% lift in leads year over year, that’s a nice metric to know, but knowing that 90% of those leads were from a specific email campaign is an even better metric to know. Be sure you’re tracking the channels through which leads are generated so you then know where to place effort and where to pull back.
Please also note, most analytics tools default to what’s called “last-click attribution.” This means that 100% of the lead source is attributed to the final means by which the lead was generated. So if a user read one of your emails, clicked a social media ad to visit your site, then returned a day later via an organic search result to fill out a form, the organic search action would get 100% of the lead acquisition credit. For true depth of knowledge, look to adjust this model as it fits your company needs.
Lead to Conversion Rate by Channel
With an understanding of where leads are coming from by channel, the next challenge in measuring your performance is identifying not just volume of leads categorized by channel, but the rate of conversion by channel as well. If a site is functioning properly, 60-80% of all your traffic is likely originating from organic visits.
If we look at the raw number of leads by this channel, there’s a chance that the total numbers will outpace other channels, but the channel conversion rate for a lead may be lower than something like social. In this scenario, if social media has a lower volume but a higher conversion rate, I may want to up my strategic play in the social arena - because an hour of my time there may result in better marketing ROI than an hour of my time elsewhere.
Cost of Lead Acquisition by Channel
Many marketers these days don’t have the luxury to wait for traditional inbound marketing to take effect, so they turn to paid online outbound advertising to get the job done. When you pump money into a system to force ads in front of the right audience, you’re going to get results. But the devil is in the details here. Be sure you’re paying attention not just to the raw number of leads, or even the lead conversion rate. When a direct buy comes into play, you need to factor in cost to lead acquisition as well. If leads are outpacing non-paid avenues and the conversion rate is in the double digits, you may think all is well.
However, it can often be expensive to acquire leads. If you sell a $500 product, with your profit on that item of $100, you can’t afford to spend $150 per acquisition. We’ve seen this scenario where a marketer isn’t watching the till and they’re literally paying customers to buy their products.
Goal: Brand Awareness
If your goal is to get your name and message out to as many people in a specific audience as possible, a lead generation-based KPI does not make sense. Instead, we want to focus on metrics that relay the ability for a marketing message to reach a specific audience and measure their interaction with message material - be it a landing page, infographic or blog, among others.
The numbers behind brand awareness impact can start with reach, as measured by the number of pageviews over time, total users, and overall sessions, but they shouldn’t end there. An increase in general visitation numbers like these can be an indicator of success in your efforts to reach a larger audience, but they again are often misunderstood.
Many businesses look to total numbers without researching data points that talk to the quality of the visitor as it relates to their brand, product or service. For that next level of insight, we want to explore metrics that show us the depth of a user's interaction. Having a user come to your site, sit on a page for 10 seconds and bounce off isn’t fulfilling any goals, not really. Looking at metrics that show average pages per session, time on site and time on page, as well as reduced bounce rates are going to add a layer of depth to otherwise surface metrics.
Brand Awareness KPIs:
Number of Pageviews
Pageview metrics measure the total number of pages viewed over a set timeline. This metric is used to measure volume, but not the quality of that view. Pageview metrics can be seen in website analytics tools like Google Analytics. Many organizations see fluctuations in pageviews over the course of the week, with Saturdays and Sundays showing valleys and data peaking during the workweek. Holidays are also common for lower pageview metrics, which again bevies the reason for year-over-year comparisons whenever possible.
Total and Unique/New Users
New or Unique user metrics generally give you a look at how many new people are being exposed to your branding and message. However, this metric can often be misleading because tools like Google Analytics count a “new” user as anyone who hasn’t visited your site within the past three months. With some sales or research cycles, that three-month period may not be sufficient and could actually be counting returning visitors. This metric needs to be supported by additional KPIs to determine the quality of the traffic.
Number of Sessions
A website session is identified by the number of times a visitor comes to your site. For example, a single user may visit your site four times in a week and see three pages across each visit. In measuring impact to your site, you would have one user, four sessions and 12 pageviews during a combined reporting period. This useful metric can detail not just reach, but the frequency of visits if viewed appropriately.
Avg. Time on Site/Avg. Time on Page
Metrics like average time on site or time on page begin to allow an online marketer to move beyond reach and delve into the quality of a visit. A website may have thousands of visits a month, but each visitor may not interact with your page in any meaningful way. It’s like having a storefront where all you get are window shoppers and no in-store visits - not exceptionally effective. By measuring length of time on top of total users, sessions or pageviews, you start to get a more holistic view of the quality of your visitor - the assumption being that a user who stays on a page or website longer is absorbing more of your brand’s messaging.
Avg. Pages Per Visit
Much like average time on site, this metric helps provide insight into the quality of a visit. Ideally, you’d see an increase or, at a minimum, a steady hold on the number of pages viewed per visit. This metric helps gauge engagement. If a user is, on average, frequenting more pages over time, while still holding average time on site higher year over year, then we can assume they are being exposed to more of your message and are taking the time to learn more about you, your product or service.
A bounce rate measures how many people viewed one page on your site, took no action (clicked on an element, visited another page, etc.), then left. If we’re gauging brand awareness, we’d ideally like to see a low bounce rate, which would be interpreted as users interacting with content, which can equate to an engaged user. However, this metric can be a bit misleading.
Many news and fact-based sites have extraordinarily high bounce rates, but can still tout engaged user base. Why? Because with an item like an article or a quick fact, the user has a very distinct goal of being informed on a very specific topic or item, then leaving. Ideally, even these websites would do well by enticing users to click further to learn more (which is often why you see “read more” on articles) to get additional exposure to their brand and message.
Putting It All Together
Knowing first the true focus of your website and marketing efforts is a critical first step in identifying which KPIs to track. Once you have goals identified, choose your key performance indicators to match. Be sure you’ve set up tracking properly, ensure you’re looking at what matters as opposed to vanity metrics, and above all else, make decisions based on data, not on gut. If you measure properly and act accordingly, you’ll turn a mess of information into actionable insights.