In the marketing industry of today, the use of automation software is more prevalent than ever. With the help of these tools, it’s easy to do a large volume of menial tasks which makes effective use of time and resources. But when you scale your marketing efforts to such a degree, keeping track of it all becomes quite important.
Monitoring the effectiveness of your marketing strategies is a crucial part of business growth. It’s not just about how much revenue you generate, it’s also necessary to drive customer engagement.
To help you with tracking and reporting, today I’m going to show you which marketing automation KPIs to look out for. This should help you understand your target audience and generate valuable insights. Let’s get started.
Key Performance Indicators (KPIs)
You may have stumbled upon the term KPI every now and then. If you’re new to marketing, this wouldn’t make much sense to you naturally. However, since this guide is designed for everyone, let me start by talking about what that is first.
KPI stands for key performance indicators. Call it numbers, stats, or metrics, it’s all the same. Only the most important metrics are referred to as the KPI. This can be things like profit margin, customer acquisition cost, lead generation cost, ROI, and so on.
The purpose of tracking marketing KPIs is to see the effectiveness of your marketing efforts. And since we’re interested in marketing automation, measuring the key performance indicators is crucial here. As you’re relying on digital solutions to take care of the tasks, it’s necessary to assess, whether the marketing automation tool is performing as expected.
If you can find a positive change in the numbers or visualized graphs, then you don’t have to worry about anything. But if you notice that the KPIs to track are putting up a poor performance, it’s time to shift gears.
As it’s possible to measure marketing automation KPIs for a specific time period, experts on a marketing team like to find patterns in the data. This makes it easier to identify the potential issues in the marketing automation strategy.
Choosing the Right KPIs to Track
Now that you know a little more about the metrics, let’s look into the KPIs to track. While we’re doing that, it would really help if you’re also aware of the process of selecting marketing automation KPIs. Here is a list of steps that you can follow.
Identifying Business Goals
In order to focus on the most important metric, you must start with identifying and defining a clear business goal. I’m not talking about something vague like “business growth”. I’m referring to a goal that’s more narrowed down.
For example, if you want to drive up more sales, the marketing automation KPIs that you need to think about are revenue growth, conversion rate, and average number of orders placed. All of these metrics are related to boosting sales in one way or another.
Similarly, if you wanted to improve customer satisfaction, you’d need to look at things like customer lifetime, customer loyalty, and retention rate. These numbers can make it easier to comprehend the current level of a customer’s satisfaction. And they can also provide valuable insights into what improvements can be made.
Think about the Target Audience
Alongside your business goals, you need to start thinking about the target audience as well. As this is going to be different for each industry, you will need different marketing automation KPIs here.
To give you some perspective, consider an example. Between a manufacturing business and a retail company, which one would you think cares more about production rate and efficiency? Similarly, which one do you think pays more attention to sales and revenue generated from customers?
Even if both companies wanted to boost their sales, the KPIs to track would be different. This is because they’re not dealing with the same kind of customers. In a B2B company, for example, the important metrics would be customer acquisition costs, churn rate, and the customer lifetime value.
But it would be completely different for an eCommerce business. There you would need to worry about things like website traffic, conversion rate and customer revenue. So, choosing a key performance indicator also means researching the customers first.
When you’re generating an analytical report, try to keep it straightforward. Instead of trying to track a ton of metrics, you should identify and focus on the few that have the most impact.
Instead, pay attention to only a handful. I feel that the optimum number of metrics that small businesses should track is 3 to 5. Any more than that and everything gets confusing. When that happens, instead of giving you a clarified thought, it clouds your decision-making process.
Measurable and Actionable KPIs
What’s the main idea behind tracking the performance indicators? It’s to give you an insight to make an informed decision about your business. That’s why I always suggest that you track the metrics that can be measured over time and the ones that provide you insights that you can take action over.
If you have a problem tha
t needs addressing, the metrics should help you understand the core reason behind it. For example, when you’re considering revenue growth, you also need to think about leads generated and the conversion rate from it.
If you’re considering customer metrics for satisfaction, then the actionable metrics would be response metrics, resolution rate, and actual feedback from customers. By observing these metrics, you should be able to come up with marketing strategies that make the best use of the information.
Different Types of Marketing Automation Metrics
The kinds of metrics in marketing automation differ from your regular ones. In order to better classify it, these metrics have been divided into three major types.
- Activity metrics
- Engagement metrics
- Customer metrics
Let’s have a more in-depth look at what these really are.
This is an important metric, one that you need at the start of the marketing automation implementation process. Using these, you can judge whether or not, your investment in automation software was worth it or not. Since you want your investment to be worth your money, these metrics can help you assess that.
If your initial assessment tells you that putting money into this venture was worth it, then you can move on to the next thing. That’s examining whether your marketing team is making use of all the features or not.
If the software is too complex to handle, your team
might require a lot of time to get used to it. This will affect the efficiency of your marketing automation. Because of that, it will be quite some time before you can think about generating any kind of actual revenue.
That’s why activity metrics are one of the most important marketing automation KPIs. Here are some examples of how activity metrics can help you with your marketing campaigns.
Total Emails Sent
If you were already running email marketing campaigns, there is an activity metric that you can use to judge the performance of the campaign. By keeping track of the total number of emails sent by your employees, you can check if the efficiency improved or not.
If you choose the right marketing automation tool, then you should see a huge number of emails sent out to boost your marketing campaigns. This is just one of many examples, but it’s one of the best ones to gauge the performance.
Create Workflows for Quality Behavioral Triggers
One of the popular ways of streamlining your marketing efforts is setting up workflows for behavioral triggers. Sometimes you can predict exactly what your customer would like to see based on their actions. By creating a customized follow up sequence, you can improve customer engagement by personalizing content for them.
For example, you can have a welcome message set up as part of your marketing automation strategy that will be displayed to new users when they visit your website.
With activity metrics, you can see whether your team is using this approach to deal with customers. If the answer is yes, then your investment was right on the money. If not, then you might want to rethink your strategies.
Now I want to move on to another type of metric. Engagement metrics also often referred to as response metrics are related directly to a customer’s experience. This is extremely useful when you want to see how customers are interacting with your marketing automation efforts.
If you’re worried about not being able to connect to the right potential customers, engagement metrics will tell you how well of a job you’re doing. Let’s take a look at some more KPIs in this arena.
While website traffic might just be a straight-up number, it’s also a direct representation of your marketing performance. You can tell how much value customers are placing on your website, just from the number of users coming in regularly. Usually, after the implementation of marketing automation systems, this number sees a huge surge.
Open Rates and CTRs
When you’re using email marketing as part of your marketing strategy, open rate and click through rates tell you if you used the correct email template or not. Since marketing automation software sends these emails in bulk, it’s important to monitor the results.
If you see that the open and click through rate is lower than before, then you need to make some changes. I personally recommend using A/B testing as it can give you a before and after look at the performance of your automation campaigns.
This is the metric that helps you realize how well your marketing campaign is doing with new customers. Typically, the most used way to increase conversion rate is personalizing content. By using customer data, you can create targeted content that’s guaranteed to convert new customers. Use this metric as a guideline for introducing changes to your marketing campaigns for better results.
Sometimes customers will leave you because they didn’t find your content useful. However, you can check to see if the use of the marketing automation platform was worth it or not, by checking the reconversion rate.
Bounce rate is the number of visitors who come to visit your website from your ads or as organic web traffic but they soon leave after looking at only one page. This is something you want to avoid at all costs. You can see if the numbers for this went down after implementing automation in your marketing strategy.
Finally, time to cover the last KPI of the guide, i.e., customer metrics. These numbers show you whether or not the implementation of the automated marketing strategy has had any impact on sales. If you’ve done a good job of it, you should see improvements in the following cases:
Customer Acquisition Cost
One of the things that happens after using an automated marketing strategy is the generation of high quality leads. You can use the automation marketing tools to develop these leads into increased site traffic, and convert them into actual paying customers.
MQLs (Marketing Qualified Leads)
These are the leads that come to your business, based on your efforts on different marketing channels. They have a slightly higher average lead score than existing customers. So your marketing team should use the automation program to carefully nurture the marketing qualified leads.
SQLs (Sales Qualified Leads)
These are leads that don’t need much nurturing as they’re already prepared to talk to a sales team. A lead like this is ready to become a paying customer because they like what they see. If you want to relate this with a stage in the customer’s journey, this is someone who’s in the last funnel ready to make a purchase.
An increase in the SQL score showcases the effectiveness of your marketing after implementing automation. But if it’s diminishing, you might want to check to see if everything is working as intended.
Well, there you have it. These are the most important KPIs of your marketing automation journey. While it does cover the basics, there a lot more to learn beyond the foundation that I’ve built for you. So, if you’re serious about mastering this modern marketing concept, why not conduct your own research on the side as well?
What Is Analytics in Marketing Automation?
Automation in marketing is an approach where a digital solution is employed to take care of simple tasks or perform them in bulk. The analytics part here is focused on understanding and visualizing the changes in your marketing after the implementation of the automation system.
How Do You Measure the Effectiveness of Automation for Marketing?
This can be done using built-in tools that come with an automation program or with the help of third-party integrations. When measuring the effectiveness, KPIs need to be identified and used to create the reports.
What Are KPIs for Marketing Automation?
In simple words, KPIs are judging criteria for assessing the performance of automation marketing. While there are differences in the KPIs for different industries, the most common ones are, revenue generated, social media engagement, website traffic, and click through rate among others.
What Is the Idea Behind Marketing Automation?
Using automation in marketing, it’s possible to streamline and perform simple tasks to save a lot of time and money. By programming the software to understand the customer journey and setting up behavioral patterns, marketing processes can be automated using an automated marketing solution.