Establish your goals
The first step to any marketing plan (or any business strategy plan at all) is to decide your goals and figure out how you’ll measure your progress toward them. For a marketing plan, your goals might include any of the following:
Enter new markets
Raise brand awareness in existing markets
Launch a new product or service
And, of course, increase sales and revenue
That list is by no means exhaustive, though! Every business and every agency will have their own goals. You might even need to consider a goal that’s client-facing (improving the customer journey, for example) or even internal (like establishing systems, processes, and communication channels within the marketing department).
Next, it’s time to figure out your KPIs.
What does KPI stand for?
Once you know where you want to go (in other words, your goals), you need to decide how you’re going to measure your progress. Frequently what’s used to measure progress is a metric called the KPI, or key performance indicator.
There are all kinds of KPIs you can use to measure your goals, some of which are accepted industry-wide and others of which are sometimes overlooked but incredibly valuable.
The primary thing to consider as you select the KPIs you want to track is what the results are that you’re driving everything toward. You can collect all the data you want, but if all you’re doing is putting stuff in motion so that it can spit out numbers on the other side — rather than defining The Prize and then keeping your eye on it — your KPIs won’t do you any good.
With that in mind, let’s take a deep dive into some of the most common — and most commonly overlooked — KPIs for your marketing plan.
Marketing KPIs about money
The purpose of a business is to make money, plain and simple. If a business isn’t primarily concerned with making money, it’s not a business (and it won’t be in business for long).
So for that reason, you’ll want to keep an eye on some performance indicators around your revenue and sales. These are the main ones:
Revenue is the amount of money that comes in the door. Many marketers and business owners see that number and stop there, but revenue is hardly the only money number you need to know. It’s sometimes called gross profit, and it’s the money you make before the expenses come out. You could be making a 7-figure revenue, but if your expenses eat up the majority of your revenue, the business might still be in jeopardy. That’s why you also need to look at …
Net profit is how much money is left over after your expenses are paid out. Net profit and revenue work closely together, and ideally you’re making the space between your revenue and your profits as big as possible. (This is called your margin, and the fatter your margin is, the more money the business is actually making.)
Sales growth marks the increase or decrease in sales between two points of time. You might want to measure a few different time periods, such as total sales growth this year vs. last year; this quarter and last quarter; this month and last month; this month and the same month last year, and more. You measure growth by using the “percent change” calculation — (new – old) / old x100 (and that final number is the percent change, or sales growth).
Revenue per client (a.k.a. lifetime customer value)
LCV is the total number of dollars a customer spends with your business over the entire course of your relationship with them. Most marketers will have a goal to raise this number over time.
Revenue per employee
This is fairly straightforward in theory but can get a little muddy in practice, depending on how your agency is set up. You can calculate the total revenue and compare it to the total number of employees regardless of their role in bringing in that revenue, and/or calculate how much revenue any given employee is responsible for bringing in.
Average contract value
In eCommerce language, this is equal to average cart value — the average value of the transactions in a given period.)