Key Performance Indicators
Key Performance Indicators
In Management, you began measuring progress toward your goals with Key Performance Indicators. Here you will continue this process, but with a focus on Marketing. You'll record the KPIs, or “vital statistics” that let you know what's happening both with your target market as a whole, as well as with your particular share of the market. Then you’ll record the KPIs that monitor the influx of new and repeat business.
The reason you measure performance is you want to know if the things you and your employees do result in progress toward your objectives. You drafted your overall company-wide objectives in Leadership, and you have developed a set of Marketing Objectives that support them. For those Marketing Objectives to be more than hopes and dreams, you'll need a method to measure your progress toward them. Your Marketing KPIs are that method.
As you progress, you'll gain clarity on Marketing concepts, and on your own Marketing Strategy. You will build systems to ensure your strategy is carried out in a consistent manner. Following is a list of sample KPIs that some businesses use to monitor the performance of their Marketing departments. They represent some items that are important for some businesses to measure and monitor. Remember to treat performance management holistically. It's not a good idea to look around a position, department, or company and randomly start measuring things. Measure things that give you information about progress toward your goals. If you can't figure out which goal your data is supporting, you're likely wasting resources collecting meaningless data.
See Management: Business for more information on Key Performance Indicators.
Target Market Size: What's the total number of prospects in your target market?
Market Growth: What is the percent change in your target market size?
Market Potential: What's the total potential income from your target market? (Market size X typical frequency of purchase X typical sales per purchase.)
Market Share: What percentage of your target market currently buys from you? (Your potential market share should be your market share goal.)
Customer Focus: How well does your business as a whole meet your customers' needs? How would your customers respond to this question?
Market Position: How solid is your market position? In other words, how established are the unique qualities of your business, in the minds of your customers?
Prospects Reached: This is the total number of prospects reached by your promotional efforts in a given time period (i.e. 1,000 prospects per week).
Qualified Leads Generated: This is the total number of qualified leads who respond to your promotional efforts in a given time period.
Cost Per Lead: This is your promotional costs per lead generated (total promotional costs divided by total number of qualified leads generated.) This number could also be calculated for your total marketing (promotions plus sales) costs per lead generated.
Target Market Fit: How close to your target market are the leads your promotional efforts are generating?
Impact: How motivated are your prospects to purchase from you as a result of your promotional efforts? This could also be a quantitative indicator if you tracked your sales conversion rates for prospects attracted by different promotional campaigns.
Pick the most important Marketing Objectives that fulfill your Strategic Objectives, and add them to your KPI Dashboard. The remainder of this section will give you the tools to help you meet your Marketing Goals.
In this chapter you should have designed, shared, and made a plan to review your:
- Objectives for yor Marketing Department, based off of your company's Strategic Objectives.
- KPIs to track your progress toward your top Marketing Objectives.