The world of marketing continues to grow today, becoming more and more competitive by the second.
As a result, you need to find ways to ensure your marketing agency stays relevant and continues to grow.
Often, though, you are so focused on how to help your clients expand their business through marketing that you neglect keeping track of your own business growth.
If this describes you, now is the time to get serious about your own performance in addition to that of your clients.
One beneficial way to go about this is to track important Key Performance Indicators (KPIs).
Tracking these KPIs can help content marketing agencies see if growth is occurring and also alert you to where you are exceeding, meeting, or falling short of your goals.
As digital marketing continues to become increasingly essential to your business, knowing what to track to determine your next move or moves is crucial.
Here are 7 of the best marketing agency KPIs to help track your growth.
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1. Customer Acquisition Cost (CAC)
The Customer Acquisition Cost (CAC) is one of the most powerful marketing agency KPIs you can track. It calculates for you the estimated cost of acquiring each new customer.
A simple way to find your CAC is to divide your total marketing spend by the total number of new customers over the course of a set time or for a specific campaign.
This Customer Acquisition Cost can show you the effectiveness of a marketing campaign and assist with budgeting efforts.
It can also shed valuable insight into the marketing channels that are producing the most qualified leads and a higher return on investment.
If you find your CAC is running high, focus on ways to decrease it, including the following.
- Better optimize your content to rank higher and bring in more organic traffic.
- Find ways to optimize conversions.
- Develop stronger digital marketing strategies to entice your target audiences.
- Evaluate your marketing spend and find unnecessary costs to eliminate.
Customer Acquisition Cost is an essential KPI for marketing agencies. Finding ways to lower it can benefit your business in many ways, including the ability to reinvest and build up your team, improving both retention and success rates.
2. Customer LTV
Customer LTV reveals the average value overall each customer brings to your business over the long term.
More simply put, it is the amount a customer spends on your particular services or products during the entire relationship with your particular agency.
A basic way to calculate your Customer LTV is to subtract Lifetime Customer Costs from the Lifetime Customer Revenue.
This KPI can provide inspiring clues that you are doing a lot of things right, with successful outcomes, and you are succeeding at maintaining valuable relationships with your clients.
3. Bottom Line Profitability Percentage
Bottom Line Profitability Percentage can show just how profitable your agency has been during an accounting period.
Use this to compare with the goals you set out at the beginning of the year to see whether your own marketing strategy is leading to higher growth.
To calculate your Bottom Line Profitability Percentage, you’ll need two specific pieces of information — revenue and net income (your profits after paying all fees and operational costs).
Divide the net income by your net revenue, then multiply the result by 100 to obtain your profitability percentage.
4. Time Invested in Project vs. Returns
To truly see whether or not your marketing efforts are paying off, track the Time Invested in Project vs. Returns KPI.
Essentially, this means taking a look at how much time your team has invested in each marketing project for your agency specifically. Then determine the returns received for each one.
With this data in hand, you’ll be able to determine the profit generated per each hour of marketing work.
At this point, you may need to re-evaluate your current marketing strategies and make improvements.
5. Social Media Engagement
Today, social media is a crucial component of your growth strategy, and one of the most important marketing agency KPIs to track is social media engagement.
To calculate engagement rates on the different social media platforms, you divide the total number of interactions (replies, likes, shares, mentions, etc.) by follower count, then multiply it by 100.
Fortunately, today, the platforms, including LinkedIn, have their own dashboards which can provide this information for you.
Use what you learn here to improve your content strategy, increase engagement, and grow your business.
Here are just a few simple examples of how to set a KPI goal around Social Media Engagement and experiment with ways to increase interaction with your agency.
Say you want to increase your LinkedIn presence and boost positive interactions on your posts by a certain percentage.
One way to start is to look at what day you gain the newest followers. With this information, you can experiment posting on that day of the week, say Wednesday, to discover if it leads to higher engagements.
If you currently have a YouTube Channel and share videos on your services or success stories, the number of subscribers and video views will be beneficial information to track.
You may want to set an engagement goal of achieving a specific number of views of a certain video within five days of posting.
Use the “Total Video Views” feature to determine whether you’re achieving that goal or not. Keep experimenting and modifying your video content until you find what resonates with viewers.
If your engagement rates are lower on the Facebook platform, consider setting a KPI goal and experiment with ways to reach it.
For example, say you want to achieve an average number of interactions each week. Go to your Facebook Business Dashboard and add the following metrics to help you keep track: Total Interactions, Interaction Rate, and Interactions Distribution.
For the other social media platforms, such as Instagram and Twitter, you can also create KPI goals based on engagement and experiment until you find what will work best for you.
Also, take the time to analyze each social media platform and determine which ones are providing you with the highest engagement levels.
You can then either improve your strategy on the lower-performing ones or discontinue using them altogether and focus on just one or two.
6. Customer Churn Rate
Customer Churn Rate is a calculation of the number of customers leaving your service or product over a set amount of time.
An easy way to calculate this yourself is to take the number of customers lost and divide it by the total number of your customers at the beginning of that specific timeframe.
If you find your customer churn rate is higher than you would like, focus on ways to increase your customer retention.
Start by researching reasons customers may have left. Use what you find to address any issues you identify and also consider whether or not you can add additional value to your services or products to entice customers to stay.
7. Monthly Website Traffic
One of the most beneficial marketing agency KPIs to track that relate to your website and give you a clue as to your growth is Monthly Website Traffic.
Monthly Website Traffic provides the number of unique sessions or visits made to your website over the last month.
This amount is impacted by your marketing campaigns, organic SEO, website user experience, and more.
With this information in hand, you may determine you need to re-examine your SEO strategy to find more ways to rank higher and bring that organic traffic your way. Also, take a look at what promotions drive more visitors to your website.
Track this KPI easily through Google Analytics or other available online tools.
Keeping track of essential marketing agency KPIs today can show you how you are performing and where you can make improvements. Not only will this help to grow your client base, but it can also improve your ongoing profitability.
While you may be apprehensive about getting started, today’s technology makes it easier than ever to begin and also to continue monitoring your growth over time.
All you need to do is take that first step, and you’ll be well on your way to improving your agency’s performance while also keeping your clients happy.
Find out about more agency project management tools to help you reach success in our insightful blog post on the topic!