In the digital age, inbound marketing strategies outperform traditional marketing approaches by gaping margins. But you don't need to take our word for it. We've broken down the science behind inbound KPI tracking, so you can find out exactly what became of your marketing budget.
1. Funnel Metrics
Funnel metrics provide the feedback that makes Inbound marketing thrive. Tracking the total number of leads that transition into a given lifecycle stage and the rate at which they covert between stages is the most precise and objective way to measure the effectiveness of your marketing efforts. By evaluating your conversion rate against industry benchmarks, you can zero in on areas of your funnel where you're underperforming and ensure that your marketing calories are being put to good use.
If you're getting ample site traffic but your lead-to-conversion rate is significantly below industry standards, it could be an indication that:
1) The content you're producing isn't resonating with your target audience.
There are two main reasons why your content might not be inspiring conversions; the first has to do with your tone, messaging and value proposition. All the content you produce should be reverse-engineered —born of a specific buyer persona's pain points and written in a way that directly address these challenges and needs. If your messaging isn't compelling visitors to extend their journey, then it may be time to revisit your primary personas and reposition.
The second reason content may not be generating conversions involves context. As a prospect moves closer to making a purchasing decision, they grow more informed, and, consequently, more specific in their needs and concerns in relation to your solution. Creating a message that resonates means evolving your message and content as a relationship progresses. In inbound terms, that equates to producing ample top-of-funnel (TOFU), middle-of-funnel (MOFU) and bottom-of-funnel (BOFU) resources to nurture leads in a way that dovetails with their position in the buyer's journey. Conversion metrics can indicate areas of your funnel where you're lacking relevant content and thus help you identify where to focus your efforts to see greater results.
2) You're not providing enough conversion points or your existing conversion points aren't effective.
In addition to evaluating the volume of conversion opportunities that exist for each lifecycle stage, it's important to consider the quality and accessibility of existing opportunities that are underperforming. Inundating visitors with more conversion points isn't necessarily a quick-fix; be strategic with your placement and make sure that the conversion opportunity matches your lead's demonstrated interest and engagement level. From a visual and navigational perspective, conversion points should make it exceptionally clear and easy for visitors to take the next desired action (usually filling out a form). With the aid of an activity mapping app like Hotjar, you can track how visitors are engaging with conversion points and make sure they aren't futilely clicking on static features.
2. Web Traffic
Assessing where your site traffic is coming from can tell you volumes about the effectiveness of your marketing approach. What channels or sources are contributing most to your marketing funnel? If most of your leads are coming from direct traffic (search engine queries that include your brand name, direct referrals from other sites, word of mouth) it means that your ecosystem presence is strong (people recognize your brand) but you're not creating enough relevant, optimized content to allow leads to find you organically.
At its core, inbound marketing is web-based marketing. That's not to say that all brand touchpoints must exist within the bounds of your website, but all channels should point back to this central crux. All new leads, whether by referral or content, should be channeled through your site. This makes granular reporting on lead engagement and conversions possible, so you can accurately measure sales' and marketing's contribution to pipeline revenue.
By nature, inbound marketing is designed to generate more qualified leads and nurture those leads into customers. If your organically-sourced leads are trailing, then something has gone awry with your content and SEO strategy. Of the contacts who were generated in a month, how many of them found your site through a blog article? Identifying the source of web traffic will not only tell you if your marketing strategy is actually generating leads, but it will also help you assign an ROI value to your efforts by tracking how many of those leads continued on to become customers.
3. Customer Lifetime Value and Cost of Customer Acquisition
The difference between these two metrics will tell you what the ROI is on your marketing strategy. If you can accurately track both, then you'll be able to justify greater support and funding for marketing initiatives. By measuring customer lifetime value and the cost of customer acquisition for marketing-generated leads versus sales-generated leads, you'll also be able to determine whether net marketing ROI differs by lead source. Do marketing-generated leads require more or less time and effort to nurture than non-marketing generated leads? Understanding each department's contribution to your pipeline will help you unify operations and ultimately allow you to accomplish more with less.
Interested in learning what areas of your marketing funnel are underperforming? Sign up for a free Funnel Gap Analysis below to find out where to focus your marketing efforts to see maximum results.