Launching a marketing automation campaign without having key performance indicators to monitor is probably the worst way to go. It’s all well and good to do marketing automation, but if you do it without analyzing the results, it’s hard to distinguish what works from what does not work.
Following the right KPIs can help you keep track of these things and some indicators are essential for the well-being of your company. However, each KPI must be linked to a well-defined strategy to make sense.
Before you start
When you begin with automation, it is necessary to have a good database to process. It is your data that allows you to explain the ROI of the actions performed by the company. It is also thanks to your data that you will be able to optimize your processes and your communications for the future. So, don’t minimize this important element that is your strategy basis.
There are 4 major families of key indicators to consider in marketing automation that also represent the major steps of a conversion funnel:
- Acquisition indicators: getting new contacts
- Engagement indicators: contact interactions with the brand
- Conversion indicators: actions that advance the contact in the customer journey
- Retention indicators: contact loyalty
To explain the different possibilities of indicators to monitor in each family, we give you a short summary for each of them:
1. Number of active/inactive contacts
For starters, the number of active contacts tells you how many of your contacts have recently engaged with your brand. On the contrary, inactive contacts are those that have not interacted with your brand for a few weeks or months. You should also think about reactivating or removing them from your database.
The evolution of active contacts for a given period is very interesting to follow because it is the contacts who are most likely to become customers soon.
2. Prospect qualification rate
To follow this idea, it’s important to know how qualified your prospects are. Indeed, there is a big difference between generating leads and qualifying them! To determine this, you will have to measure the number of people who have gone from simple contact to prospect, that is, that perfectly match your target audience. You will also need to measure those who have passed from prospect to potential buyers according to your qualification criteria (see points 8 and 9).
It is important to follow your contacts engagement with your brand. The fact that your contacts are engaged gives you more opportunities to interact with them and therefore more opportunities to get information about them. It can also tell you which messages are most relevant to your audience. Engagement can be measured with several statistics including:
3. Engagement rate
This rate is the total number of campaign-related interactions, for example, clicks, downloads, video viewing, and so on, divided by the total number of engaged contacts.
The problem with this data is that it does not distinguish forms of commitment. Indeed, everyone agrees that a contact who has left a positive recommendation is more valuable than a contact who opened your newsletter. But this calculation, unfortunately, does not evaluate the quality of the commitment.
Another negative point, it does not distinguish negative interactions from the positive ones, such as leaving a negative comment on a product, for example. This rate, however, remains an interesting element to analyze as far as you know its limits and you do not rely only on this data to measure your performance.
4. Click rate (Call-to-action)
The click rate or CTR of calls-to-action tells us a lot about your promise attraction. You calculate it by adding the total number of clicks on your call-to-action, divided by the number of times it was displayed to your recipients.
A bad CTR can mean two things: either the call-to-action is not obvious enough, or it is not attractive enough for your contacts. Check these items and try to improve them to increase this rate.
5. Form fill rate
Forms are one of the best conversion tools! It is because of them that you can know your visitors’ identity. It is calculated by dividing the total number of times your form is filled, divided by the number of times it was displayed. This indicator gives you a good idea of the performance of your form conversions.
The length of your forms can vary your conversion rate but also the quality of the data you will collect. Indeed, a short form will have a higher conversion rate, but the contacts collected will probably be less qualified. On the contrary, a longer form will give you a lower conversion rate, but people who have completed it will be more likely to be more qualified.
Monitor this rate regularly and then adjust the length of your forms to increase the quality of the acquired contacts and the conversion rate.
6. Opening, click and unsubscribe email rate
Your email automation strategy is a big part of the overall automation of a business. It’s an effective way to send personalized communications in a timely manner based on several criteria, such as the contact’s shopping habits, where it is in the sales funnel, its birthday, etc.
It is extremely important to measure these communications as they are major indicators of engagement with the brand.
The opening rate informs you about the relevance of your email subject, the click rate informs you about the relevance of your content and your offer and the unsubscribe rate informs you about your contact interest towards your brand. If you want more information about these three indicators, here is a more complete article on KPIs in email automation.
7. Date of the last update
This data indicates the last interaction your contacts had with your brand. It is therefore complementary to the number of active contacts mentioned in point 1. This KPI tells you a lot about your ability to keep your contacts engaged and then turn it into a customer.
To have a database to run, you need a certain amount of leads. Tracking the number of leads or customers generated will keep your automation strategy running smoothly. To get there, here are the main indicators to look at:
8. Conversion rate: from contacts to prospects
This rate, as well as the following, are the two indicators that make it possible to calculate the prospect qualification rate, which we saw in point 2. This rate lets you know how many contacts you need before having a qualified prospect.
For this rate to work, you should determine in advance what a qualified prospect is for your business. With a precise definition, there will be no mistakes made and all the contacts that will be added to the list of qualified prospects will have their place among them.
9. Conversion rate: from prospects to clients
This rate indicates the number of qualified leads that are needed before finalizing a sale. In general, this measure is taken every quarter, but it depends a lot on your sales cycle. The longer it is, the more you should measure it spread over a long period.
10. Conversion rate by objective
Any marketing automation strategy should be developed around strategic goals. In addition, each sequence has its own purpose, for example, a sequence is intended to obtain the contact email address while another is for a specific purchase. Thus, the conversion rate of each of your sequences according to their purpose will be important to measure in order to determine the relevance.
11. Lead average score
If you have established a lead scoring strategy within your company, the average lead score is a great way to check the overall quality of your generated leads. You simply have to calculate the average scores of each of your contact over a period of time X and you have your average lead score.
12. Cost per prospect
The cost per prospect is actually the amount it costs you to acquire a new prospect. It also informs you about the acquisition cost of a new customer, because they are directly proportional: the higher the cost per prospect, the more the cost of a new customer will be.
This is a fairly simple calculation. Simply add up the expenses of a campaign and divide that amount by the number of leads generated by this campaign. Your goal should be to have a cost per lead as low as possible.
13. Income generated
This indicator is essential to determine if your automated actions have been successful or not. Calculate the revenue generated per campaign for all customers, to give you a better idea of overall performance.
14. Repurchase rate
The re-purchase rate gives you a lot of information about the loyalty of your customers. This directly affects their satisfaction and is therefore essential to automated loyalty campaigns. This rate is the number of people who made more than one purchase in a certain period of time.
15. Marketing automation ROI
The ROI calculation of your marketing automation is calculated like any other ROI: The sum of the revenue generated by the campaign minus the sum of the investments you have put in this campaign. Your ROI happens to be the increase in sales compared to the previous period (eg quarter). Thus, the higher the number of sales generated, the higher your ROI will be.
HOW TO USE THESE KPI’s CONCRETELY?
What is important is to choose the best performance indicators according to the strategy you decide to adopt. Some will make more sense to you while others will be more or less useless. Remember, however, that following too many indicators prevents you from having an enlightened overall vision and not following enough of them limits you in your performance analysis, which will not be complete.
To help you choose which ones to focus on, we’ve made a list of the most useful KPIs for marketing automation:
- The engagement rate (point 3)
- Opening and click rate (point 6)
- Conversion rate (points 8, 9 and 10)
- Cost per prospect (point 12)
- The income generated (point 13)
Then, to optimize your organization of tracked KPIs, the best way is to create a dashboard where you can have all the information at hand to make informed marketing decisions. If you do not know where to start, follow this webinar that tells you how to create an effective dashboard in 10 steps!
Finally, having an overview of the best marketing automation KPIs for your business allows you to do a lot of things. Among other things, you will be able to establish the ROI of each marketing action taken and determine what could be improved or not. Keep in mind that not everything is set in stone: your marketing automation campaigns will evolve over the analysis that you will perform, as well as your strategy will change, and for the better!