Key performance indicators (KPIs) are essential for modern B2B brands. With so much data, we can track business and marketing performance like never before. However, knowing which KPIs make a difference to the bottom line is a skill.
Why you need to track KPIs
Tracking and monitoring KPIs has become vital for a variety of reasons, such as:
- Benefiting from data-driven decisions
- Better budget allocation
- Reducing the sales cycle
- Evaluating sales and marketing experiments
- Benchmarking against your rivals
- A fuller understanding of the customer journey
The 9 KPIs you need to track
Let’s break up the KPIs into traffic, conversions, and revenue to see how they fit different goals and objectives.
There are three traffic KPIs that are crucial to track.
1. Website Traffic
Website traffic measures the total number of page requests on your website. This metric is a high-level overview of your combined marketing campaigns. However, you need to drill down on traffic sources to get a more granular idea of what is or isn’t working.
What website traffic reveals: Are your combined marketing campaigns driving visitors to your website?
2. Paid traffic
Paid traffic refers to website visitors who arrive at your website through PPC, display, and search ads, sponsored content, native ads, etc. Paid traffic should direct users to specific landing pages.
What paid traffic reveals: Paid traffic measures the effectiveness of your ads. They can help you understand if your creatives are working and if your placements target the right audience.
3. Organic traffic
Organic traffic refers to the number of visitors that come to your website from search engines, content marketing, and social media. Again, understanding each traffic source gives you a more granular view of how each channel or campaign is getting results.
Organic search is highly desirable because of its low cost. The right content marketing piece can deliver value (and users) for years. In contrast, paid search only yields while you pay for it.
What organic traffic reveals: Organic search KPIs tell you how your content and social media marketing campaigns perform.
While driving traffic to your website or eCommerce store is essential, what your prospects do when they get there matters to your bottom line.
Here are some conversion KPIs that you need to track.
4. Conversion rate
Each campaign your run should have a clearly defined goal. That could be more brand awareness, sales, leads, or anything necessary to generate business.
Conversion rate refers to users’ actions when they hit your landing pages. Some common conversion goals are sign-ups, subscriptions, downloads, or sales.
What conversion rate reveals: Conversion rate measures the quality of your landing page and how well your ads or content aligns with your product or service. It can also indicate whether you target the right users with your paid or organic campaigns.
5. Click-through rate
Click-through rate (CTR) is an excellent metric for measuring the effectiveness of your ads or content. It divides the number of impressions by the number of desirable actions—for example, 100 impressions / 8 clicks = 8% click-through rate.
You can use CTR for your ads, blog, or marketing content. It works anywhere you place a call to action (CTA).
What click-through rate reveals: Click-through rate measures how well your ads or content moves customers down the sales funnel.
6. Cost per click (CPC)
Organic traffic would be enough to keep the lights on in an ideal world. However, we don’t live in an ideal world. Paid traffic from ads and search engines is essential for reaching new customers.
Cost per click (CPC) measures your total ad spend and divides it by the clicks you’ve accrued. For example, if you spend €500 on ads and get 25 clicks, it’s 500/25 = €20.
What CPC reveals: CPC shows you the costs of getting a visitor to your website or landing page. Depending on the expected revenue of each visitor, this can show you if your ad campaigns are producing a return on investment.
7. Cost per lead (CPL)
Cost per lead (CPL) is a simple yet vital KPI. It’s imperative in high-ticket B2B environments with longer sales cycles. Big deals take time and nurturing; your salespeople need a steady pipeline of prospects to convert.
CPL is easy to calculate. You divide your sales and marketing spend by the number of leads generated.
What CPL reveals: CPL shows how effectively your sales and marketing efforts deliver leads. When taken with conversion rates and metrics like customer lifetime value (CLV), you can understand whether your outreach produces ROI.
After driving traffic to your website (and hopefully converting it), you should generate revenue. Here are some revenue KPIs to watch out for.
8. Customer acquisition costs (CAC)
This KPI is essential for contextualizing how much sales and marketing spending it costs to generate revenue. You can calculate this KPI by adding up the total cost of sales and marketing spending (including staff) and dividing it by the number of new customers.
What CAC reveals: CAC shows you how much it costs to acquire new customers.
9. Customer lifetime value (CLV)
Winning new customers is fine. But how much revenue are they generating? Knowing the average income you can expect from each customer throughout their lifetime with your business is essential.
Getting granular with CLV can help you understand the type of customers you must also attract. These figures can help focus your attention on specific demographics or users that are profitable for your business and reduce sales and marketing spending on prospects that don’t deliver ROI.
What CLV reveals: CLV shows you the average revenue you can expect from each customer. When paired with CAC, you can truly understand the return on investment from sales and marketing.
KPIs are an excellent way to track your business performance. You should connect all your campaigns to clear objectives measured by business metrics. This data lets you understand what channels, approaches, and content is over or underperforming. Data, and not gut feeling, is what should drive your decision-making.