Check out Part 1 Here
Last week we started sharing our top KPIs that every marketer needs to track. We shared three essential metrics that help your marketing team prove their value to your company, and help you gain valuable insights into how your campaigns are performing. Let's continue and jump into part 2 where we share three more KPIs.
What is the value of a customer to your business over the entire lifetime of your relationship with them?
Trying to figure out how much your customers are worth seems like it would be tough. Every customer is different right? Well, this KPI works with averages and while it wont give you an exact figure it will provide valuable insights that you can use to find balance between your short-term and long-term marketing goals.
How do you calculate lifetime customer value?
Revenue X Gross Margin X Average number or purchases
Let's look at an example. Let's say you are a B2B company and sell vans. One catering company buys a van for $50,000 and your gross margin on that van is 35%. Over a lifetime let's say that your customer buys five vans. To calculate your lifetime customer value you will do the following:
$50,000 (Revenue) X 35% (Gross Margin) X 5 (Average number of purchases)
You may be wondering why a metric for your sales team is a KPI listed in a blog post for marketers. Well sales and marketing should be aligned in your business, and B2B leads are well known for having horrifically low response times.
The quality of leads often degrades over time. The longer it takes your sales team to respond to the marketing lead that you have given to them, the less valuable that lead is, and the less likely it will convert.
Keeping track of your sales team response times means that you can start improvinging it. You can draw comparisons to how fast your competitors are responding and start to build an alliance with your sales team where sales and marketing work in harmony to generate and convert leads.
Link building should be a pillar of your SEO strategy. An inbound link means that your website's credibility is growing and that another website sees you as a reliable source or a resource that they would want to send their audience to.
Inbound links have a direct effect on SEO – essentially the more high quality links you have the better your rankings on Google will be.
However it is important to remember that not all inbound links will be high quality. You want to get links from top sources and other websites that also have good reputations and Google views as reliable. You can check your backlink profile on all major SEO tools such as Ahrefs, SEMRush and Moz.
What is the best way to judge the impact your marketing campaigns are having? Check your sales growth. The overall goal of marketing is to make more sales for your business and generate more revenue.
By reviewing sales growth you can paint a clear picture of what marketing campaigns are having the biggest impact on sales, and which are not effective, or possibly even losing money,
This will be a core KPI for strategic planning when looking at your marketing efforts for the coming year. You can identify growth trends, and see which channels can be put to bed to better spend your resources and maximise revenue.
That is the end of part two. The last three in our top ten KPIs every marketer needs to measure will be coming out in a few days. Sign up to our email newsletter to get it delivered straight to your inbox!
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