A marketing budget serves several purposes. Firstly, you use the budget to set clear goals that you want to achieve. It also serves as a performance indicator for your successes and as a basis for justifying your expenditure.
You have invested a lot of money to achieve major marketing goals. But how do you check the actual benefit of your measures? You should regularly measure and compare key performance indicators (KPIs) in order to detect errors at an early stage and avoid them in the future. These important key figures can be used to assess, among other things
- The benefits of an advertising campaign for your company
- Whether you were able to refinance your costs
- And whether the measures have worked or need to be optimized
There are numerous KPIs. So that you can get an overview of your online performance yourself in future, we’ll tell you which ones you should pay particular attention to.
Viewing KPI figures: this is possible with Google Analytics
With the free analysis tool from Google Analytics, you can keep an eye on the KPI key figures of your own website. To do this, you need to register with Google Analytics and integrate the provider’s code snippet into your website. (How to do this is described here). Which KPI figure is important also depends on the objective of the marketing measure. We present the most important KPIs here:
About visitors, leads, customers, clicks and dwell time: this is what the KPI key figure reveals
A visitor is any person who has clicked on your website or one of your advertisements within a certain period of time.
Leads are visitors who interact with the website and, for example, leave contact details or request a no-obligation quote. This turns simple visitors into serious prospects and potential customers.
However, only 0.5 – five percent of leads usually become actual customers. Both KPIs should increase slowly but steadily. This is primarily achieved through good content quality. Good indicators of content quality are user engagement through social shares (shared content on social platforms) and comments. It should be noted that social networks are not used equally by all target groups and industries.
Clicks play a central role, especially for the ranking in the organic search results on Google (or other search engines). More clicks indicate a higher reach for your advertising/website. The organic ranking can also be increased in the long term through SEO optimization. The click-through rate, the ratio between impressions and clicks, can provide valuable information on the efficiency of an advertisement.
For customers, it is interesting to find out how they came across your company. Were they shown in the search results using one of your keywords? Or did Google ads lead to the decisive click? A high proportion of new customers in relation to the number of leads also speaks for the success of your marketing measures. Otherwise, you may have addressed the wrong target group or not communicated the value of your products or services clearly enough.
Another important KPI is the length of time visitors spend on the website. The longer a customer stays on the page of an online store, the more likely it is that they will make a purchase.
Keeping an eye on marketing costs
It is also interesting to find out what it actually costs you to acquire a new customer. The Customer Acquisition Costs (CAC) are calculated by dividing the marketing costs by the number of new customers and help you to find out which acquisition channel is most effective for acquiring new customers.
In order to determine whether the selected marketing strategies effectively increase sales, the amortization period of the CAC is measured and compared with empirical values. This describes the period required to refinance the marketing costs incurred. The amortization period should not exceed twelve months.
Conversion rate
Another important indicator is the conversion rate (CVR). This indicates as a percentage how many people have carried out a certain action and moved on to the next decision phase. This could be, for example, providing contact details or signing up for a newsletter.
The conversion rate can be used to measure the effectiveness of a single call-to-action (CTA). On average, the CVR is around one to three percent – so don’t let the low percentages scare you. The conversion rate is influenced by the speed of the website, the design, the structure of the online store and the products, among other things.
