A new business is only as successful as the customers who buy its product. Therefore, investing in marketing efforts such as email marketing, social media advertising, and mobile app development can be a costly but worthwhile investment for your company to create customer loyalty and keep your customers coming back for more!
In this blog post, we will explore some of our favorite KPIs that contribute to the success of a brand.
What are KPIs?
KPIs or Key Performance Indicators are measurements that companies use to gauge the effectiveness of their marketing strategies. These measurements reflect the performance of marketing efforts and can be broken down into two main categories: marketing effectiveness and marketing efficiency.
Marketing effectiveness measures how well your customers recognize your brand, understand the benefits of your product and enjoy your content offerings. Marketing efficiency measures how much money is being spent on getting customers to buy your product rather than spending all money on attracting customers who would have bought it anyway. Overall, KPIs can tell you what’s working about your current marketing strategy and let you know what needs to change to convert more leads into paying customers.
So what are some good KPIs to measure?
Here are some of our favorite KPIs that contribute to the success of a brand.
Net Promoter Score – NPS is a customer loyalty metric that helps companies determine how loyal their customers are, how likely they are to buy again, and if they would recommend your company’s products to friends and family. Any business needs to create customer loyalty to stay competitive; companies with high NPS scores receive twice as many recommendations as companies with low NPS scores. In addition, building customer loyalty is vital for growing your company’s revenue stream and creating word-of-mouth marketing opportunities.
Customer Retention – Customer retention is the percentage of customers who are currently making purchases. Customer retention only measures the current behavior of the customer, not their overall behavior. Tracking customer retention can help you compare how well your current marketing strategy is working compared to others in your industry. By tracking which channels are bringing in customers, how loyal they are to your company, and if they are likely to buy again when they have a problem with any product or service, you can determine the best channels for your company’s future growth.
Customer Satisfaction – The easiest KPIs that reflect customer satisfaction are online and offline reviews in social media outlets. When customers and potential customers see positive and negative reviews online, they can make an informed decision about whether or not to make a purchase.
Brand Name Recognition – Brand Name Recognition (BNR®) is an important KPI that determines if your brand name recognition is at a sufficient level to justify spending money on messaging and advertising strategies. This KPI reflects how popular your brand name is among people who would be likely customers. If your brand name recognition falls below a certain threshold, your company may need to invest more in building strong marketing strategies that will get shoppers interested in your products.
Customer Acquisition Cost (CAC) – Customer Acquisition Cost (CAC) is a KPI that tracks how much money is spent to bring in each customer. CAC helps you determine which marketing efforts bring in the most customers and which strategies are not worth their costs. For example, if one particular marketing campaign has a higher CAC than other tactics, you may want to re-allocate your budget because this strategy isn’t bringing in as many customers as it costs to market to them.
Return on Ad Spend (ROAS) – Return on Ad Spend (ROAS) measures if the amount of money invested into ads brings a positive investment return. ROAS can be broken down into two components: customer acquisition cost and customer retention. Customer acquisition cost is a measure of how much money is spent to bring in a new customer. Customer retention is measured by how loyal that new customer will be to your brand long after they buy it for the first time. ROAS helps you determine if the money you’re spending on advertising is effective enough to justify its costs.
Brand Awareness – Brand Awareness (BA) is an important KPI that determines the level of awareness of your brand among potential customers and other companies in your industry. Your BA measures how well your company’s name and logo are known among shoppers and potential customers compared to others in your industry.
Product Recall – Product recall reflects how likely your customers are to repurchase your product if they have a problem with it. It is important to make sure that your customer service is great to help your customers solve any problems they may encounter with the products you offer.
Customer Lifetime Value (CLV) – CLV is an important KPI that helps determine how much money each customer will spend overtime on various products and services that your company creates. CLV is calculated by quantifying your customer lifetime value (CUV), which measures the lifetime value of each customer over time and discounting it down to present-day revenue levels for ROI calculations.
Share of Voice – Share of Voice becomes an important KPI when calculating its ROI. It indicates how well your company’s products perform against the competition in terms of brand awareness and popularity among various social media channels.
Brand Reputation – Brand Reputation is an important KPI that determines how much credibility your company has among potential customers and other companies in your industry. If the brand reputation falls below a certain threshold, it will hurt your company’s growth. This means that your company will have to invest more money into marketing efforts to help improve its brand reputation and grow its revenues.
Cost Per Acquisition (CPA) – The Cost-Per-Acquisition (CPA) KPI helps you determine how much it costs to acquire each customer. In addition, CPA helps you compare various marketing campaigns and determine which is bringing in the most customers for you as a business owner or entrepreneur. This KPI will also help you compare the costs of various marketing tactics and determine which ones are worth their costs.
Conversion Rate – Conversion rate is an important KPI that measures the number of customers who purchase a product or service each time you want to sell it to a customer. This rate can be tracked by calculating how many sales come from social media efforts and how many sales come from natural word-of-mouth marketing efforts such as blogs, forums, and social media outlets.
Sales Conversion Rate – Sales conversion rate is another important KPI that helps you track your company’s sales volume over time concerning online and offline sales efforts.