This article originally appeared on LinkedIn.
If KPIs are a way to track performance, what KPIs should you actually be measuring?
Sales Revenue
First and foremost, sales revenue is the #1 KPI that should be measured. Right?
But that’s out of the marketer’s realm of control. Contracts, pricing, technical integration – the marketer can lead the customer to water, but… can s/he actually help close the sale?
So what else should we measure?
CPA
Of course! Cost per lead or Cost per Acquisition. Purely in marketing’s budget. Marketing is driving the programs that will increase awareness, attract new customers, and lead them down the funnel to be a lifelong, repeat customer.
What’s driving the conversions? – That’s important too! AdWords, social, SEO, content marketing, site traffic, mobile traffic, customer retention, customer satisfaction. All important KPIs to measure.
But the cost per lead/CPA tells us nothing about the quality of the lead. So, what else is there?
Customer Lifetime Value
The value of the lead can be calculated as a function of LTV. How effective is the lead generated by the trade show vs the inbound marketing campaign? We should be able to attribute a value vs cost to assess the quality of the lead.
But is that any different from what your competitors are doing? How are they attracting new leads and driving sales? And how well are they doing it?
Growth Rate – the King of KPIs
Are you growing faster than your competitors? That is the #1 KPI you should be measuring.
If you are growing faster than your competition, no matter where you stack rank in your industry, no matter how fast the industry is growing overall, the most important KPI is to understand whether you are taking market share from your competition.
You can measure KPIs on campaigns, and use A/B testing as a baseline – but the ultimate measure of sales & marketing effectiveness is how your revenues compare to that of your competitor.
Ray Beharry is a Marketing & Sales Leader based out of the Greater New York City area. He can be reached via LinkedIn, email – ray.beharry@gmail.com, and is also on Twitter @RayBeharry. www.raybeharry.com