Why aren’t your customers returning? What’s the deal with your ROI? Are you nailing your marketing campaigns — or are they sinking the ship?
To answer all of the questions above (plus tons of others) you have to take a look at your Key Performance Indicators (or KPIs.) These simple little formulas will help you lift the marketing curtain and get a glimpse into your overall strategy. Whether you’re looking to figure out why your customers aren’t sticking around or you want to growth hack your blog, KPIs will help you get there.
But, what KPIs are important? Which ones should you be measuring?
Well, consider this post your KPI bible. These are the KPIs that almost every marketer should be measuring, tracking, and A/B testing.
We’re going to segment these KPIs into 5 (very loose) sections for easy digestion.
Let’s jump in!
These KPIs are all about retaining customers or figuring out why customers are abandoning your funnel.
“Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time or we’ll lose them.” – Kevin Stirtz
What is RVR? Simply put, your RVR is how many repeat visitors you have.
Good for: Is your content engaging enough? Do customers want to buy more of your products? Returning visitors helps you figure out your strategy across verticals.
Benchmark: <25% is ideal. If you’re over 40%, you’re killing it.
Formula: [Returning Vistors/Total Visitors] = RVR
Additional Notes: RVR is definitely one of those “hidden” KPIs that a ton of marketers like to ignore. But, honestly, RVR can give you a good look at how your overall content strategy is going. Return customers are 5x more valuable than new ones, so a high RVR % is huge.
“A high bounce rate is a symptom that something is wrong in your strategy” – Neil Patel
What is Bounce Rate? Google defines bounce rate as “a single page session on your site“. Bounce rate is a measurement of how many people are viewing one “page” (landing page, site, blog content, etc.) and then leaving.
Good for: Stopping conversion loss. Also, bounce rate can give you some key insights into how you’re layering your site content. If your prospects are leaving after one page, you need to figure out why.
Benchmark: Depends on the content type.
Formula: [Visitors who bounce/total visitors] = Bounce Rate.
Additional Notes: Having a high bounce rate doesn’t have to be a bad thing; it depends on where it’s happening. Landing pages, forms, and pillar content (or any other one-stop-shop) are going to have high bounce rates. But, if your eCommerce site has a high bounce rate, you need to take some action. Why are your customers ditching your funnel mid-dance?
Also, important side note: A high bounce rate isn’t necessarily indicative of poor customer experience. In fact, blogs with high bounce rates are typically offering a good experience (they probably got the information they came for.) However, even on blogs, high bounce rates should be investigated. Try fooling around with your CTAs, create some killer pillar content, or think about your blogs overall architecture.
What’s the difference between bounce rate and RVR? Your bounce rate is how many people leave after visiting a single action on your website. RVR doesn’t take how many pages they viewed before leaving into account.
“In the world of Internet Customer Service, it’s important to remember your competitor is only one mouse click away.” — Doug Warner
What is Churn Rate? Your churn rate is the percentage of your customers who cancel (or fail to renew) their subscription with your service.
Good for: SaaS (or other sub-based) businesses looking to make a profit. If customers are canceling their sub before they hit your typical customer acquisition cost (CAC,) you’ve got a big problem.
Benchmark: 1 – 7% monthly.
Formula: [Customers at beginning of the money/Customers at the end of the month] = Churn Rate
Additional Notes: Churn rate is the perfect spot to start digging around. You need to figure out why customers are leaving. To do this, you can start sending out surveys, looking into customer particulars, analyzing your products, and reviewing competitors in your space. Churn rate can also give you some critical insights into overall market trends.
“Your most unhappy customers are your greatest source of learning.” — Bill Gates
What is a Net Promoter Score? NPS is a measure of how likely customers are to recommend you.
Good for: Addressing customer concerns, quick-fixing client relationships, finding weak team members, discovering marketing-service gaps.
Formula: Since NPS involves a survey, you probably won’t be self-calculating NPS. Here’s a HubSpot guide on the NPS formula.
Additional Notes: NPS is massive in B2B client interactions. If you can figure out where you’re both not aligning early (first 30 days) you can quickly save the relationships. Don’t just send an NPS survey out at the end of your client relationships, use it as a way to touch base throughout. NPS can be used as a retention hack that can save you some valuable customers. Want to get started? There are plenty of “free trial” NPS services out there that will give you a few for free.
Really, all of these KPIs are about growth — but these ones are more directly about revenue growth.
“Never spend your money before you have earned it.” — Thomas Jefferson
What is Return on Investment? ROI is a measure of how much revenue your marketing campaigns achieve. This is the end-game. The be-all-end-all of KPIs.
Good for: Analyzing marketing campaigns.
Benchmark: ROIs vary by industry. Here’s a tool that shows you industry specifics.
Formula: [(Growth – Campaign Costs)/Campaign Costs] = ROI
Additional Notes: All of the metrics that follow should be used to grow your ROI. Capturing a high ROI % is the goal of almost all marketing campaigns (save possibly branding.) If you feel like your ROI isn’t as high as it should be, keep reading.
“Customer satisfaction is worthless. Customer loyalty is priceless.” — Jeffrey Gitomer
What is Customer Lifetime Value? A measure of how much money you can expect from a single customer’s account.
Good for: Measuring against your CAC to figure out how worthwhile your marketing strategies are. You need to know how fast you’re going to recover your CAC.
Formula: [(Average purchase value – Purchase frequency) * Customer lifespan] = LTV. HubSpot has a great formula guide.
Additional Notes: Measuring your LTV against your CAC is insanely important. You want to know how much your customers are really worth, so that you can determine a good CAC benchmark.
“Revolve your world around the customer and more customers will revolve around you.” — Heather Williams
What is Customer Acquisition Cost? CAC is the cost to acquire customers over a specific time period.
Good for: Benchmarking against LTV, ROI, Churn Rate, and other KPIs
Benchmark: There’s not a benchmark for CAC. Here’s a post that gives some examples.
Formula: [Total marketing cost/Number of new customers] = CAC
Additional Notes: You need to figure out your CAC. Understanding how much it costs to create a new customer gives you insights across-the-board. CAC alone doesn’t tell you much, but if you can figure out your CAC, LTV, and churn rate, you get a deeper understanding of your pipeline.
“People will forget what you said. They will forget what you did. But they will never forget how you made them feel.” — Maya Angelou
What is Response Rate? Simply put, it’s how many customers respond to your emails.
Good for: A/B testing emails to garner the best CTAs and email formats.
Benchmark: 0.6% for emails.
Formula: [Responders/Total emails sent] = Response Rate
Additional Notes: Email response rate is one of the single best A/B testing KPIs out there. Responders are the most valuable email prospects, and if you can formulate emails that gather as many responders as possible, you’re in a great spot.
“In sales, a referral is the key to the door of resistance.” — Bo Bennett
What is Referral Traffic? The percentage of your traffic that’s coming through referrals (and where those referrals are coming from.)
Good for: Measuring the success of referral campaigns and looking at your link structure.
Formula: [Traffic from other sites/Total traffic] = Referral Traffic
Additional Notes: Knowing how much traffic is coming through via referrals can give you a pretty good idea of how successful your referral campaign is going. Also, if most of your traffic is from referrals, you probably need to step your organic search game up.
“Approach each customer with the idea of helping him or her solve a problem or achieve a goal, not of selling a product or service.” — Brian Tracy
What is Lead Conversion Rate? This is how many customers actually become leads.
Good for: Optimizing funnel strategies.
Benchmark: Average is ~2.5% and Good is <5%
Formula: [Total Visitors/Leads] = Lead Conversion Rate
Additional Notes: Your lead conversion rate can get super granular or overarching depending on how you’re measuring. It’s also important to remember that a “lead” can be defined in a ton of different ways. A lead to you may be a certifiable MQL who meets specific checklist criteria, or a new customer, or even someone who signed up for a newsletter/filled out a form.
“Make a customer, not a sale.” — Katherine Barchetti
What is Sales Per Visit? How many sales you’re getting per visitor on your website.
Good for: Understanding your site’s value and figuring out where to allocate marketing resources.
Formula: [Sales/Total Visitors] = Sales per Visit
Additional Notes: Do you need to scale up your SEO efforts? Do you need to downsize your marketing campaigns? Is your site worth your marketing dollars? Could you optimize your UI better? Sales per visit lets you know the answer to all of these questions.
“We interrogate things about what is the best experience for the customer.” — Kunal Bahl
What is Cart Abandonment Rate? Figuring out how many people are leaving goods in the cart and never returning.
Good for: eCommerce stores looking to growth hack their sales. Cart abandonment rates are 68%! Solving cart abandonment is a huge growth vertical.
Benchmark: Current industry is at 68% — which is way too high.
Formula: [Cart Abandons/Total Purchases] = Cart Abandonment Rate
Additional Notes: This KPI carries some serious revenue potential. Figuring out how to reduce cart abandonment can be huge for your business.
“If an opportunity isn’t effectively qualified, the sales rep will operate under the mistaken impression that the deal is theirs to win.” — Dave Stein
What is Cost per Lead? Want to know how much you’re paying per lead? This is your answer.
Good for: Literally everything! Analyzing ads, measuring campaign success, SEO, etc.
Benchmark: This varies by industry — here’s a chart.
Formula: [Total cost of campaign/number of leads] = CPL
Additional Notes: This is sort of a “catch-all” metric. Sure, you can get granular and figure out the cost per view, cost per form, etc. But, CPL cuts that time in half by jumping straight to the point. How many leads are you getting?
These KPIs are all about advertisements.
“Click-through rate is tremendously valuable and that achieving above-average CTRs can lead to better rankings.” – Moz
What is CTR? According to Google, CTR is “how often people who see your ad end up clicking it.”
Good for: Figuring out how your ads are performing. A/B tests on ads should always take CTR into account.
Formula:[Clicks/Impressions] = CTR
Additional Notes: CTR is a huge ad value determiner. If your CTR is high, your ad is obviously drawing visitors in. It’s important to remember that CTR is something you should constantly be A/B testing.
“Half of the money I spend on advertising is wasted; the trouble is I don’t know which half.” — John Wanamaker
What is Return on Ad Spend? ROAS is how much revenue you want to make for every dollar spent on ads.
Good for: Determining your overall ad strategy.
Benchmark: This varies by type of ad. Here’s a chart.
Formula: [Revenue/Ad Cost] = ROAS
Additional Notes: Your ROAS is going to be at the forefront of your ad campaigns. Google Adwords takes ROAS into account when feeding ads to users. The higher the ROAS, the fewer ad streams you’ll find (if any,) but Google targets millions of data points (history, location, etc.) to align your ROAS goals with your ads. Remember, lower ROAS almost always = more reach.
“We need to stop interrupting what people are interested in & be what people are interested in.” — Craig Davis
What is Cost per Action? CPA is how much you’re paying an advertiser for a specific action (form fill out, click, etc.)
Good for: Setting up successful ad campaigns.
Benchmark: Here’s a chart that breaks it down by industry.
Additional Notes: CPA is almost always better than CPC, but it’s also almost always more expensive. As always, blended ad portfolios perform better than single targets, and CPA lets you get granular.
These KPIs will help you with your social strategy.
“Make your customers the her of your stories.” — Ann Handley
What is Average Time on Page? This is a measure of how long your visitors are staying on specific pages.
Good for: Measuring engagement levels.
Additional Notes: It’s tough to figure out your content’s engagement rate; average time on page can help. The longer people are staying on your blog pages, the more they’re digesting the content. However, high average time on page on a form may key you into an issue, especially if your form abandonment rate is high.
“Great content is the best sales tool in the world.” — Marcus Sheridan
What is Open Rate? This shows you how many of your emails are actually getting opened.
Good for: A/B testing emails, key email metrics, campaign insights.
Formula: [Sent Emails/Opened Emails] = Open Rate
Additional Notes: Open rate is one of the most basic email KPIs. Want to know how many prospects in your funnel are actually opening your emails? Check out your open rate.
“Good SEO work only gets better over time. It’s only search engine tricks that need to keep changing when the ranking algorithms change.” — Jill Whalen
What is Organic Search Traffic? This tells you how much of your traffic comes from search engines (Google, Bing, etc.)
Good for: Giving you key insights into your SEO strategy and traffic channels.
Additional Notes: You’ll get your organic search traffic KPIs from Google Analytics. Really, organic search traffic is a massive factor when it comes to your SEO strategy and branding strategy. More organic traffic is always better. You don’t have to pay for the traffic and people specifically searching you out reflects positively on your branding strategy.
“Google only loves you when everyone else loves you first.” — Wendy Piersall
What is Pageviews? A metric that lets you know how many people viewed a specific page.
Good for: Finding your golden snitch content.
Additional Notes: Always keep your eye on pageviews. Sure, it’s not the most complex KPI, but highly viewed posts can tell you three things.
1. That content may be insanely engaging.
2. Whatever campaign you used to drive traffic to that content (social, organic, etc.) may be working extremely well.
3. You may have hit the keyword goldmine if your pageviews are killing it and most of your traffic is organic.
These are your social media KPIs.
“Content is fire. Social media is gasoline.” — Jay Baer
What is Likes? It shows you how many people are “liking” your content.
Good for: Base level social measuring.
Additional Notes: While likes may be a vanity metric, they’re an awfully helpful one. High likes can signal high engagement, but it’s also a reflection of your social reach. Measure this against social shares and social engagement.
“A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.” — Scott Cook
What is Brand Mentions? This is how many people are mentioning your #brand.
Good for: Measuring social awareness.
Additional Notes: This is another KPI that can tell you how well your social branding efforts are going. High brand mentions is usually a good sign — unless it’s insanely high; that’s usually a bad sign.
“Going viral is not an outcome; it’s a happening. Sometimes it happens; sometimes it doesn’t. Just remember, fans are vanity and sales are sanity.” — Lori Taylor
What is Social Shares? This is how many people are sharing your content.
Good for: Measuring social success.
Additional Notes: This is the better version of likes. Sure, likes are great, but shares are conscious decisions to engage your content and recommend it to family and friends.
“We have technology, finally, that for the first time in human history allows people to really maintain rich connections with much larger numbers of people.” — Pierre Omidyar
What is Social Interactions? This is the number of engagements between your brand and your customers on social media.
Good for: Social media planning, social success, social benchmarking
Additional Notes: This is the grand-daddy of all social KPIs. If people are interacting with your brand and there’s deep personal communication, your winning the social media game.
Want to know more about any of these KPIs? Are you looking to start testing some of these, but you have no clue where to start? Contact us.