A marketing funnel is a visual representation of your customer journey. A marketing funnel shows you the path from conversion and beyond, from the first step someone gets to know about your business through the buying phase.
Careful analysis of the marketing funnel reveals what an organization needs to do to influence its customers at various stages. Analyzing your funnel can increase sales, loyalty, and brand exposure.
The biggest advantage of a marketing funnel is its measurable nature. Funnels let you know where you’re losing consumers, so you can adjust your strategy. For example, if you lose customers before they reach the middle of the funnel, you need to improve your brand awareness campaign.
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What are KPIs?
Key Performance Indicators (KPIs) are measurable outcomes used to evaluate campaign success in relation to specified objectives.
The first step in choosing KPIs is to determine what you want to achieve with your marketing campaign. Then, implement the right measures to evaluate your campaign’s performance in reaching its goals. For example, if the goal of your marketing campaign is to increase brand awareness, you might consider impressions as a KPI.
Calculating KPIs can help you stay ahead of the competition by enabling you to make quick decisions, an important tool in today’s fast-changing and competitive economy.
KPIs can also help measure performance across the entire funnel. Let’s look at the KPIs at work at each step.
KPIs and strategies for the top of the funnel
In general, top-funnel marketing strategies aim to increase brand awareness. Impression and Reach KPIs can help you determine if your top-funnel marketing campaign is meeting its goals.
Top funnel marketing campaigns also include lead generation. Lead generation campaigns can measure lead volume, number of eligible leads, and other important KPIs such as cost per lead.
Consider streaming audio campaigns to increase awareness, drive store traffic, and build loyalty. The Company may also serve advertisements with precise messages at the moment based on time and other anonymous customer data.
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Some of the KPIs at the top of the funnel are:
Ad impressions: The total number of times a digital ad was viewed by all viewers is an impression.
Click-through Rate (CTR): Click-through rate (CTR) is the percentage of users who viewed and clicked on a specific ad displayed on your page. The Click-through rate measures how effective your ad is in capturing the attention of your viewers. The higher your click-through rate, the more effective your ad will be at engaging viewers.
Ad Frequency: Ad frequency is the average number of times a single user has seen your ad. To calculate your ad frequency, divide the number of impressions you receive by the number of people who saw your ad. This indicator provides information about how often your target demographic sees ads on average. By setting the right frequency for your ads, you can avoid ad fatigue for your viewers.
Cost per click (CPC) : A metric that measures how much you pay each time someone clicks on your ad. To calculate this, divide the total cost of your campaign by the number of clicks accrued to determine the cost of each click. This KPI helps you manage your customer acquisition costs. If your CPC is too high, your advertising campaign may not be worthwhile. In general, your cost per click will depend on a number of factors such as audience location and interests.
KPIs and strategies for the middle of the marketing funnel:
Deciding where to invest your brand marketing money becomes increasingly important the deeper your customers go into your funnel. The middle of the funnel is an important component of the product consideration phase. Provides a plethora of potential targets for your marketing campaigns. Brand awareness, traffic, and interactions are usually tracked.
For example, comparing the number of unique monthly visits before and after the campaign launch can tell you how effective the campaign is at introducing additional customers to your company. Key performance indicators (KPIs) can also measure the time it takes for typical leads to convert from your campaigns to qualified leads.
A mobile-first approach will help your business reach the most people, and local campaigns that target shoppers at the right time will help you stand out from the crowd.
Some KPIs in the middle of the funnel are:
Lead-based KPIs:
Lead Source: Your lead source is the original point your customers get to know about you. Typically, social media channels, email newsletters, etc. can serve as lead sources.
Lead Scoring: Lead scoring is the process of determining the quality of marketing and sales leads using predefined criteria and objectives. These criteria range from demographics to shopper behavior and user activity. Analyzing the characteristics of your existing consumer base can help you develop it.
Cost-based KPIs:
Cost Per Lead (CPL) : Cost per lead is the total cost of generating leads divided by the total leads acquired. This metric determines how cost-effective your marketing efforts are in generating new leads for your sales team.
Cost per acquisition (CPA) : Another budget tracking KPI is CPA. Calculate the cost of acquiring and selling new customers. Divide the total cost of your campaign by the number of conversions to get your CPA.
KPIs and strategies for the bottom of the marketing funnel:
Prospects become buyers at the bottom of the funnel. The end goal of this step is to achieve sales, but you can also measure other KPIs that align with that goal.
A sub-funnel digital strategy should include remarketing and lead nurturing, and programmatic advertising can help at this point. This allows your customers to stay engaged with your business and become repeat customers.
Some KPIs for this stage are:
Conversion rate : The percentage of website visitors who complete a conversion out of the total number of visitors is the conversion rate. Successful marketing and web design help you achieve high conversion rates. It also indicates that people want what you are selling and that you can easily get it.
Customer Acquisition Cost (COCA) or Customer Acquisition Cost (CAC) : The cost of acquiring a new customer is the customer acquisition cost. To get this metric, divide the total purchase cost by the total new consumers. Usually this is determined for a set amount of time.
Customer Loyalty KPIs
Net Promoter Score (NPS) : NPS is a metric for determining how many consumers will recommend your product or service to others. It works with one simple question. Would you like to suggest our company, product or service to a friend or colleague? Users respond by selecting a number between 0 and 10.
- Promoters are those who respond with a 9 or 10 on the scale.
- Users who answered 7 or 8 are passive.
- Decommitters are people who respond on a scale of 0 to 6.
NPS score is the number of recommenders minus the number of detractors.
Customer Effort Score (CES): An alternative to the Net Promoted Customer Score (NPS), which measures how much effort a customer must put in to interacting with your company. The idea is that if you make everything as simple as possible for your customers, you will increase their loyalty. There is no standard technique for testing CES, but it is usually done on a 0-10 scale.
Customer Churn: Customer Churn is a metric that evaluates how many customers or what percentage of customers stop using your product or service. It is usually tracked on a monthly or annual basis. Regardless of your sales performance, churn is important because if churn is too high, your brand will suffer. A high churn can also be a sign of a bad product or service.
Customer Retention: Retention is the opposite of churn. The percentage of customers who continue to use your product or service over time. Generally, it is inspected once a month or once a year. The sum of the bounce rate and retention rate is 100%.
Customer Value KPIs
Customer lifetime value (CLV) : This KPI represents the average amount of revenue a company expects to receive from a single customer. It can be revenue that recurs over several years, a series of one-time payments, or a single payment. In general, combining this with KPIs like cost of customer acquisition or cost per lead can give you a good idea of your current state.
Customer Lifetime Cost (CLC) : Fees are accrued for the duration of the customer relationship. It may be in exchange for providing services or support. Typically, this KPI is used in conjunction with the CLV KPI to evaluate the average lifetime cost per customer.
Customer lifetime benefit (CLP) : Customer lifetime benefit is the customer lifetime value (CLV) minus the customer lifetime cost (CLC).
Cost per issue : Every time you meet with a customer, it costs your company a small amount. The cost per problem KPI calculates the cost of each encounter and finally customer profitability.
conclusion
As a brand, it’s important to move your target audience along the marketing funnel. Judge all digital marketing activities by the goals of a specific stage rather than the long-term overall outcome. This is where KPIs really play a role. Choose the KPIs that are relevant to you and, as a result, carefully measure them at each stage of your marketing funnel. Finally, be patient and don’t forget to wait for the result. You will surely achieve your marketing goals!