In order for your business to succeed and grow, you need actionable data that will help shape your strategy.
This is why all businesses, both big and small, keep track of certain key performance indicators (KPIs), or metrics, as they’re also known, to see if their marketing strategy is working. Without these key metrics, a business cannot predict trends of their customers, nor cater to their needs in ways that would secure revenue for the company.
So, if you’re a new business looking to keep track of your sales/marketing funnel metrics, but don’t know which ones to pay attention to, start with these 12 crucial metrics and expand from there!
[Source: Freepik]
What Is the Sales Funnel
Okay, first thing’s first – what is a sales/marketing funnel?
The funnel refers to the cycle a customer goes through when engaging with your business, from the first time they come into contact with it, to the actual buying of your product.
In essence, this process “funnels” people toward making a purchase from you. The funnel is then divided further into top and bottom funnels.
Top funnel refers to the processes by which your future customer comes into contact with your business. The two stages described here are Awareness and Interest. People become aware of your business through your marketing efforts and become interested in your product if they find it compelling enough.
Bottom-of-funnel is where the real action happens. At this point, a person has become a lead and is ready to make a Decision if you manage to grab enough of their attention during the Interest stage. After that comes the Action stage, where the lead finally either makes the purchase or leaves .
With that, the cycle is complete, and it restarts with every individual customer. Each individual stage comes with its own metrics and each of those can show you where your marketing strategy is failing and where it’s working.
But, before we start talking about maetrics, first we must discuss the…
Importance of Tracking Sales Metrics
So, why is it important to track metrics?
As we mentioned in the introduction, a business cannot operate without being able to extract information about its effect on the customer.
From this, it’s easy to surmise that the greatest benefit of tracking metrics is that it gives you the ability to make informed decisions ahead of time.
Without that data, you’re, basically, just walking in the dark.Your metrics will not only give you key indicators of when your strategy is working, but, more importantly, they’ll give you a clue about choke points.
From there you can adjust your strategy to eliminate that choke point and keep the flow of customers steady enough to allow your business to grow and expand.
Top-of-Funnel Metrics
Now that we’ve got that out of the way, it’s time to look over some of those metrics we've been harping on until now. Let’s start with some top-of-funnel metrics, as they’re a good indicator of how effective you are at garnering attention and creating interest.
Website Traffic
Website traffic is one of the basic and one of the first metrics you’ll probably track. This KPI tells you how many people visit your website on a daily basis. This doesn’t mean that you’ll convert all those visitors into customers, but the more people visit your website, the greater the chance some of them will decide to buy from you.
Website traffic is easy to measure, as most analytics software have that capability built in as standard. Even free software, like Google Analytics will include at least website traffic in their metric tracking package.
[Source: Freepik]
Bounce Rates
Bounce rates are usually measured in conjunction with your website traffic, as they’re a good indicator that something is off with your website.
You may be attracting a lot of people to your website, but the website itself might not be well optimized or unattractive, leading to a bad user experience, causing people to “bounce”.
However, don’t be alarmed at your bounce rates immediately. You must know that the average bounce rates can be quite high, especially between different industries. Yet the businesses operating in those industries are still generating a lot of revenue and growing.
The average bounce rates, according to SEMRush, are between 26% and 40%, so, as long as you fall between those two numbers, you shouldn’t be too vexxed.
Impressions
Impressions is a metric tracking the number of people that view your posts across different platforms. If your post has 1000 views, it’s said it has 1000 impressions.
This KPI is a good show of how effective your SEO strategy is at exposing your content. Again, this kind of exposure still isn’t enough to ensure you actually convert your visitors, but it’s a good start.
Reach
Reach is similar to impressions, except, instead of tracking the overall number of times your posts were viewed, it shows how many unique views you’re getting. Having a good reach means you’re creating a better awareness of your brand, which can, in turn, lead to better website traffic.
Entrances
Entrances is a KPI measuring how many people actually enter your sales funnel.
As we said before, just because you have plenty of website traffic, it doesn’t mean that people won't bounce. Website traffic is a good start, but, the truth is, those people don’t matter unless they actually move on to the Interest stage of your funnel.
To calculate the number of entrances, just add the number of leads reached during your sales cycle.
Leads
Leads are your active prospects. These are the people that have shown interest in your product, and who are showing willingness to actually purchase your product. Leads are converted from your overall website traffic.
Leads can be categorized in several ways, but, for now, let's stick to SQLs (sales qualified leads) and MQLs (marketing qualified leads).
MQLs are people that have shown great interest in your business, but are still on the fence about buying. They will require a bit more persuading, but they’re a good indicator of the success of your marketing campaigns.
SQLs are leads who have entered the bottom funnel, and are ready to make a purchase. They still aren’t a slam dunk, but they’re pretty much one step from buying. As a business, your main goal is to turn these MQLs into SQLs.
Average Session Time
Average session time is the average time people spend on your website. Better average times usually indicate better retention and better lead generation, while low average session times lead to greater bounce rates.
Bottom-of-Funnel Metrics
Bottom-of-funnel metrics are less numerous, but just as important, or even more important than top-of-funnel metrics. This is because the bottom of the funnel is the place where the lead actually becomes a customer – the place where your whole marketing and sales strategy actually starts paying off.
Photo by Luke Chesser on Unsplash
Click-Through Rate
Click-through rate measures the percentage of clicks on your call-to-action links as opposed to the number of impressions.
To get the number, you need to divide the number of clicks by the number of impressions, times a hundred. So, if your link is getting 1000 impressions and 150 clicks, it’s click-through rate is 15%.
High click-through rates are a good indicator that your CTAs are enticing enough to actually generate leads and even convert some of them.
Conversion Rates
Conversion rates is one of the most important, if not the most important bottom-of-funnel metric you need to measure.
This KPI shows the number of leads actually converted into customers. To calculate hour conversion rates, you do the same thing as with calculating click-through rates, except you do it with number of entries and number of conversions.
So, the number of conversions is divided by the number of entries times a hundred. A simple metric to calculate, but one of the vital ones, as high numbers will show that your funnel is working properly, and bringing in a lot of sales.
Total Sales
Another important metric, total sales shows how many sales you’ve made during a specific time period, and how much money you’ve earned from all your sales.
To calculate total sales, you need to multiply the number of sales by the cost of each unit. Additionally, you can add the total revenue from each sale for the allotted time period.
Average Order Value
Sometimes, you’ll see a business having few customers, but making good revenue. This is because their average order value tends to be high.
Average order value is the average revenue generated from a single order. To calculate it, divide your total revenue by your total orders for a given time period.
One good thing about average order value is that you can calculate it and compare it between individual products. This way, you can figure out which products sell well, and which ones don’t, so you can adjust your strategy to promote the high-selling product more, and push more of it out the doors.
Revenue
The quintessential metric for any business to track is revenue. This is what you’re here for, this is why you’re in business – to generate revenue.
Revenue is the total money earned from all your sales. However, you can also segment your revenue by product or by different channels. This way, you can figure out which channel earns you the most money, so you can focus on it, and make it your primary moneymaker.
Conclusion
That’s why you need to start tracking these metrics today! If you’re still unsure how to measure your KPIs or what tools to use, hiring professionals from Seattle SEO agencies could be vital for the success of your business.
And there you have it, some of the most crucial metrics in the industry. As we said, without these, you won’t be able to gain any good insights into how your company is doing, and how effective it is at creating opportunities for people to come in and interact with your products
Author bio: Travis Dillard is a business consultant and an organizational psychologist based in Arlington, Texas. Passionate about marketing, social networks, and business in general. In his spare time, he writes a lot about new business strategies and digital marketing for DigitalStrategyOne.
