15 Important Conversion Metrics & Business KPIs You Should Track (2023)

There’s no lack of data to track.

Marketers don’t struggle with not having enough data. They struggle to pull the insights from the data already provided.

To help guide you, let’s dive into the big picture of business conversion metrics to help you determine the best KPIs to track.

1. Revenue

Revenue is the lifeblood of all businesses. It’s the total amount of money your business brings in. Your gross revenue is everything before expenses.

Revenue is the common thread that holds sales and marketing teams together. Raise your hand if you’ve heard the good ol’ saying, “Marketing doesn’t drive revenue. Sales does.”

When the marketing and sales teams align, it only benefits the bottom line.

How to track:

To track revenue, you can set-up ecommerce tracking in Google Analytics.

2. Conversion Rate

Conversion rate is the amount of visitors who have completed a goal on your website. The higher the conversion rate, the more successful your marketing campaigns.

WordStream did a study on the average conversion rate per industry stating that the average conversion rate across all industries is 2.70 percent on search networks.

Conversion rate is often tied to conversion rate optimization (CRO) which is marketing tactics like A/B testing to optimize a web page.

How to track:

To measure your conversion rate, use this formula:

Conversion rate = (conversions / total visitors) * 100%

For example, if your website had 100,000 visitors and 5,000 conversions last month, your conversion rate is 5 percent.

3. Leads Generated

Lead generation is when you attract and convert potential users interested in your company. A lead starts at the beginning of the buyer’s journey.

Lead generation is vital to success. But, to get leads you need to get traffic.

For example, ClearPivot increased monthly website traffic by 330 percent which resulted in a 57 percent increase in lead generation.

And, CSI Accounting and Payroll, increased traffic by 300 percent and saw new contacts spike to 625 percent.

How to track:

To track lead generation, I recommend setting up goals in Google Analytics. Treva Marshall goes into details about how to set up these goals.

4. Cost Per Acquisition

Cost per acquisition (CPA) is the price you pay to acquire a new customer. It’s similar to conversion rates, but with CPA, you can directly measure the impact of marketing on revenue.

If you’re using CPA for Google Ads, generally your CPA will be higher than your cost per click.

Many companies use CPA as a determining factor for their campaign direction.

Take OSN, for example. They reduced their cost per acquisition by 82 percent using Google Ads Call-Only campaigns.

And, Ebates reduced their cost per app registration by 56 percent.

How to track:

To calculate cost per acquisition, follow this formula:

(Video) 15 Critical KPIs to Manage Your Ecommerce Business

Total marketing costs (MCC) / Total customers acquired (CA) = CPA

5. Order Value

Average order value (AOV) is the average dollar amount spent each time a customer orders. It is the sales per order, not per customer.

Increasing your AOV is much easier than attempting to increase your conversion rate. Why?

It’s much easier to convince a current customer to buy from you than it is to gain a new customer.

Just look at Boxed. Boxed, an online wholesaler of bulk product, used Facebook Ads to see a 14 percent increase in AOV.

How to track:

To track average order value, follow this formula:

Revenue / Number of Orders = Average Order Value (AOV)

For example, if I order three dogs bandanas that cost $10 each, my AOV is $10.

6. Customer Loyalty/Retention

Customer retention rate is how long a business keeps its paying customers over time. Harvard Business Review found that costs companies about 5-25x more to gain a new customer than it does to sell to an existing one.

Peter Drucker once said:

“Because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation.”

The point is, revenue doesn’t care where it comes from. Loyal customers spend more money and convert.

That’s why we’re seeing loyalty programs take center stage.

Virgin Atlantic’s Flying Club members earn 50 percent more points on flights. Plus, they have access to expedited check-in.

Amazon Prime members spend an average of $1,500 per year on Amazon.com. That’s compared with $625 per year spent by Amazon customers that are not Prime members.

How to track:

Customer churn rate is the best way to measure customer retention and loyalty. It gives you hard data to understand if your customers are happy or not. If you have a high churn rate, most likely your product or service doesn’t meet the needs of your customers.

Intercom uses churn rate to predict future problems in their funnel.

The email marketing folks at ConvertKit calculate churn rate like this:

Lost quantity / Number of “x” at the beginning of time = Churn

7. Lifetime Value (LTV)

Lifetime value is the revenue your business makes from a customer.

Venture capitalist, David Skok, says “the biggest reasons startups die is because their Customer Acquisition costs vs their Customer Lifetime Value costs often look like this.”

Netflix is a perfect example lifetime value. The average Netflix subscriber stays with them for 25 months. That’s a lifetime value of $291.25

How to track:

To calculate LTV, use this formula:

LTV = Average Revenue Per User (ARPU) x 1/Churn

Essentially, this formula will predict how much money you’ll make in a specific period. So, if it costs you $200 to acquire a new customer, you should create a plan to make $200 back from that customer.

8. ROI

ROI stands for Return on Investment. It’s a way for marketers to prove that marketing does impact the bottom line of the company. It’s also a good way to determine what to spend your marketing budgets on.

(Video) 7 Key Ecommerce Metrics and KPIs To Track Weekly

However, there are challenges to calculating ROI in marketing. Why? Because what you spend $5 on today may not bring a return for 5 years.

According to The CMO Survey from Duke University’s Fuqua School of Business, only 37 percent of CMOs feel they can prove the short-term impact of marketing spend.

How to track:

To track ROI, use this formula:

(Gross Profit – Marketing Investment) / Marketing Investment

For example, if you buy $100 worth of Facebook ads, then end up getting $200 back in sales, your return on investment is 100 percent.

9. ROAS

ROAS means Return on Ad Spend. Essentially, it gives marketers an idea if they spend X on this advertising campaign then you’ll receive X back in increased revenue.

As a general rule of thumb, think about a positive ROAS like this: for every $1 you spend, you should get $3 back.

However, depending on your industry, you may have different numbers.

Nielsen analyzed more than 1,400 ad campaigns from 450 CPG brands over 10 years. They discovered different ROAS across categories with baby products generating the biggest return on spend at $3.71.

How to track:

To calculate ROAS, use this formula: (Revenue – Cost) / Cost

For example, if you spend $5,000 on Google Ads and earned $10,000 from those who clicked on your ads, then your ROAS is ($5,000 – $10,000) / $5,000 equals 1, meaning 100 percent.

10. Media Mentions

Whether it’s a positive review or something not-so-sweet, tracking your mentions is part of maintaining your brand reputation. It gives you valuable feedback to your brand, product, or company.

If you’re a big company, you’re probably mentioned in the press naturally quite often. If you’re smaller, a mention could lead to a potential partnership or opportunity.

If you’re getting started, Brittany Berger, previously Head of Content and PR at Mention, suggests “monitoring your social media handles, your company name, and your website.”

How to track:

I would recommend you track your mentions monthly. You can automate a report with a tool like Moz, BuzzSumo or SEMrush Brand Monitoring.

You can also use tools like HootSuite (paid and free versions available) and Tweetdeck (free) to monitor your social mentions. These tools are good to use to track competitors also.

If you’re smaller and on a tight budget, I’d opt Google Alerts. You can set up recipes on IFTTT for free. Some of my favorite applets include tracking mentions on Twitter and Reddit.

11. Total Traffic

Total traffic gives you a bird’s eye view of the health of your website. It’s the big picture.

You can begin to track patterns to see if there’s a drop off during a specific day of the week or spike throughout the year.

How to track:

To measure total traffic, login to Google Analytics > Acquisition > All Traffic > Channels.

12. Email Subscribers

Your email subscribers are your bread and butter for any company. They are often the most engaged users.

Email had a median ROI of 122 percent — that’s more than 4x higher than social media, direct mail and paid search.

(Video) 7 Essential KPIs & Metrics to Track (to Grow Your Sales)

Just look at The Kewl Shop. They grew their ecommerce revenues by 22 percent in 12 months with email marketing.

Or, learn how Milk It Academy saw 187 percent increase in revenue from new email subscribers.

As you can see, increasing your email subscribers can lead to higher sales.

There are many email tools you can use to track your email list growth. At SEJ, we use MailChimp. But, there are many others like Aweber and Drip.

How to track:

If you want to track where your email subscribers are coming from, you can create form submissions in Google Analytics.

Just head over to Behavior > Events > Overview. Under the Event Category column, click on Form. Here, you can view the number of impressions and conversions. Then, click the Event Action.

13. Branded Searches

Branded searches are keywords that include your brand name or a variation of your brand name. For example, In-N-Out, In-N-Out Burgers, In-N-Out fast food, etc.

Branded searches are known for their high conversion rates.

Tom Demers, Co-Founder & Managing Partner at Measured SEM and Cornerstone Content, analyzed 50 companies to find that branded searches were worth $171 million per month.

And, Tom Capper, Senior Consultant at Distilled, published a case study on Moz to show that branded search volume is correlated to organic search ranking in Google.

I would say that’s worth the effort.

How to track:

To track branded searches, you can measure branded search impressions through Google Search Console.

If you’re getting impressions, that means people are searching for your branded terms and may help you understand what’s working and what’s not with your marketing efforts.

Also, I would recommend tracking direct traffic in Google Analytics. If people are typing your domain name into the search bar, it means people are looking for you.

Lastly, you can run a PPC campaign for your branded keyword terms to gain more accurate impression data.

14. Reviews

Reviews are your businesses social proof.

There’s proof that consumers trust each other more than they trust brands. BrightLocal found that 85 percent of consumers trust online reviews as much as personal recommendations.

This is why we’re seeing an emergence of Yelp, Google+, Facebook, and Angie’s List type of marketing strategies.

Bazaarvoice proved that 50 or more reviews per product can mean a 4.6 percent increase in conversion rates.

To monitor reviews, you can use tools like YOTPO, TrustPilot, BrightLocal, BirdEye, or ReviewTrackers, to name a few.

How to track:

With a negative review on the first page of Google, there is going to be a loss of revenue.

Harvard Business Review discovered that a one-star increase in Yelp rating leads to a 5-9 percent increase in revenue.

Ryan Erskine, Senior Brand Strategist at BrandYourself, shares his formula for calculating a bad Yelp review.

(Video) The 5 Most Important Metrics To Track For Your Business

% Lost Revenue = (5 – Star Rating) * .07

So, if you have a 3 star rating, you’re 2 stars away from 5.

3 * .07 = 0.21

That’s 21 percent of lost revenue.

15. Net Promoter Score

Net Promoter Score (NPS) measures customer loyalty with a single question.

On a scale of 0-10, how likely is it that you would recommend our company?

It looks something like this.

15 Important Conversion Metrics & Business KPIs You Should Track (1)

Based on the score they give you, they are bucketed into three categories:

  1. Promoters: 9-10.
  2. Passives: 7-8.
  3. Detractors: 6 or below.

Many companies use NPS to learn from their customers. For example, Mention cut their churn rate in half in two months with NPS surveys.

And, Airbnb found that customers who an NPS score of 10 were 13 percent more likely to rebook another stay.

Now, the million dollar question: What is a good NPS score?

In a perfect world, your NPS score would be 100. But, that’s not reality. A good NPS score depends entirely on your industry. To gauge your NPS score for your industry, head over to NPS Benchmarks.

Here is a look at some of the top companies and their NPS:

  • Tesla: 97
  • Southwest Airlines: 62
  • Amazon: 61
  • Google: 50
  • Microsoft: 34
  • United Airlines: 10

There are many tools to use to begin gathering your NPS score. Groove uses Delighted. HootSuite uses Wootric. And, Zapier uses Promoter.

How to track:

To calculate your NPS, subtract the percentage of Detractors from the percentage of Promoters.

(% of Promoters) – (% of Detractors) = Net Promoter Score

So, if 60 percent of respondents were Promoters and 30 percent were Detractors, your NPS is a score of 30.

Image Credits

Featured Image: Paulo Bobita
Screenshot: Taken by author

Next Chapter 12 Social Media Engagement KPIs That Matter

FAQs

What are the most important KPIs to track? ›

The Most Important KPIs to Track
  • Sales Growth. ...
  • Leads. ...
  • Return on Investment (ROI) ...
  • Lifetime Value of a Customer (LTV) ...
  • Customer Acquisition Cost (CAC) ...
  • Conversion Rate. ...
  • Open Rate. ...
  • Click-Through-Rate.
22 Aug 2022

Which KPIs would you track for a conversion campaign? ›

Total number of conversions

The number of conversions is your most basic conversion KPI. Especially if you're only collecting one or two conversion types, tracking this number alone will say a lot about your performance.

What are the most important KPIs for a business? ›

What Are the 5 Key Performance Indicators?
  • Revenue growth.
  • Revenue per client.
  • Profit margin.
  • Client retention rate.
  • Customer satisfaction.
17 Aug 2022

What are the metrics of conversion? ›

There are multiple conversion rate metrics you can track to see if you're reaching your goals, including:
  • Click-Through Rate (CTR)
  • Cost Per Conversion (CPC)
  • Return On Investment (ROI)
  • New Visitor Conversion Rate.
  • Returning Visitor Conversion Rate.
  • Average Time On Site.
  • Bounce Rate.
1 Mar 2022

What are the 4 main KPIs? ›

Anyway, the four KPIs that always come out of these workshops are:
  • Customer Satisfaction,
  • Internal Process Quality,
  • Employee Satisfaction, and.
  • Financial Performance Index.
25 Sept 2013

Is a conversion rate a KPI? ›

The conversion rate is a crucial KPI not only for your PPC campaigns but also for your website and landing page performance. Here's all the information you need about this KPI, what it is, why it's important, how to calculate it, and way more!

What is the most important KPI to look at to determine if your conversion ad campaign is profitable and worth scaling? ›

Profit & Return on Investment (ROI)

ROAS doesn't take into account any other costs beyond ad spend, so it's important to also keep an eye on profit and return on investment (ROI). This ensures that the campaigns are still driving value even after all other costs are accounted for.

What do conversion metrics focus on? ›

The online conversion metric examines how effective you are at converting your online audience into paying customers. Google defines a conversion as what happens when someone clicks your ad and then takes an action that you've defined as valuable.

What are metrics in business? ›

Business metrics are quantifiable measures used to track business processes to judge the performance level of your business. There are hundreds of these metrics because there are so many different kinds of businesses, with many different processes.

How do I monitor conversion rates? ›

To determine a conversion rate, divide the number of goals achieved in a given time frame by the total number of visitors to your website, then multiply that number by 100. So if your landing page had 16,982 visitors and of those, 3,604 took a desired action, then your conversion rate is 21.22%.

How do you increase conversion rate metrics? ›

The most well-known way to optimize your CRO is to leverage A/B testing tools. If you have enough traffic, you can send some traffic on landing page A and landing page B and have metrics to know which page converts best. For most companies, this is the most efficient method to get better results.

What are KPIs for business development? ›

KPIs are metrics used to track the performance of a business, a department, or individuals against goals. Choosing KPIs that are most relevant to your industry and business goals is key — focusing on the wrong ones can be costly to your company.

What metrics should a small business track? ›

The most important metrics for small businesses and startups are sales, operational, and customer service metrics.
...
Customer service and customer relationship:
  • Customer lifetime value.
  • Customer retention rate.
  • Customer satisfaction (NPS or CSAT)
  • On-time delivery rates.
  • Shipping accuracy.
2 May 2022

What are the 3 types of KPIs? ›

Types of KPIs include: Quantitative indicators that can be presented with a number. Qualitative indicators that can't be presented as a number. Leading indicators that can predict the outcome of a process.

What are the 5 Key Performance Indicators in project management? ›

Project Management KPIs
  • Project schedule.
  • Estimate to project completion.
  • Current development backlog.
  • Labor costs spent per month.
  • Current resource allocation.

What is a good KPI? ›

Good KPIs:

Provide objective evidence of progress towards achieving a desired result. Measure what is intended to be measured to help inform better decision making. Offer a comparison that gauges the degree of performance change over time.

What are KPI metrics? ›

What are KPIs? KPIs or Key Performance Indicators are the metrics by which you gauge business critical initiatives, objectives, or goals. The operative word in the phrase is “key,” meaning they have special or significant meaning. KPIs act as measurable benchmarks against defined goals.

How do you create a KPI list? ›

Setting SMART KPIs

Specific: be clear about what each KPI will measure, and why it's important. Measurable: the KPI must be measurable to a defined standard. Achievable: you must be able to deliver on the KPI. Relevant: your KPI must measure something that matters and improves performance.

What are other examples of metrics KPIs? ›

Examples of Financial KPIs
  • Growth in Revenue.
  • Net Profit Margin.
  • Gross Profit Margin.
  • Operational Cash Flow.
  • Current Accounts Receivables.
  • Inventory Turnover.
  • EBITDA.
11 May 2021

What is a good conversion rate? ›

What's a good conversion rate? A good conversion rate is above 10%, with some businesses achieving an average of 11.45%. Earning a good conversion rate places your company in the top 10% of global advertisers, which makes your conversion rate two to five times better than the average conversion rate.

What is a KPI for brand awareness? ›

Brand awareness tracks your brand's visibility and sentiment across social media platforms and search engines. Digital marketers may set a brand awareness KPI to track how their brand is perceived over a specified period of time. You can track your brand awareness KPI with a number of metrics.

What is a benchmark conversion rate? ›

Conversion rate benchmarks tell us on average how many leads convert into opportunities. For example, one important conversion metric for us at Chili Piper is the conversion rate from form-fill to qualified-held meeting.

How do you track business outcomes and KPIs? ›

One of the most effective ways to track your progress is to use a dashboard like those that can be built in modern BI platforms like Domo. A dashboard can provide a high-level overview of your business performance, including how well you're meeting your KPIs and goals.

Which indicators do a business need to watch out for? ›

Key Performance Indicators Examples
  • Revenue per Employee. “As a company grows, it's easy to see opportunity on the horizon and often, new resources are needed to go after it. ...
  • Revenue Growth Rates. ...
  • Repeat Business. ...
  • Value. ...
  • Profitability. ...
  • Client Satisfaction. ...
  • Employee Happiness. ...
  • Month-Over-Month Growth.
9 Apr 2018

What is one strategy your business could use to increase conversion? ›

Third-party signup bypassing. Many businesses request customers to create customer accounts on their sites. One of the best ways to do this is by asking your audience to sign up using another account such as Google or Facebook. Opting for this type of customer account registration boosts your conversion rates even more ...

What are the key variables that determine conversion rates? ›

There are six common factors in each improvements established in a website to improve the conversion rate.
  • 1) Value proposal. The value proposal, that is to say, what your site offers to its visitors, is the base to optimizing the conversion rate. ...
  • 2) Relevance. ...
  • 3) Clarity. ...
  • 4) Anxiety. ...
  • 5) Distraction.

Which are the standard lead conversion metrics that you track regularly? ›

1 – Revenue Contribution of Converted Leads. 2 – Opportunity Win Rates from Converted Leads. 3 – Average Opportunity Size from Converted Leads. 4 – Win Rates by Opportunity Owner.

What are the 3 types of KPIs? ›

Types of KPIs include: Quantitative indicators that can be presented with a number. Qualitative indicators that can't be presented as a number. Leading indicators that can predict the outcome of a process.

What is the best way to track KPIs? ›

The most common tool for tracking KPIs is web analytics. Google Analytics is able to track a myriad of data, from website performance to new subscribers, to sales.

What is the best KPI dashboard? ›

Some of the best KPI dashboard software for KPI tracking are Datapad, Klipfolio, Geckoboard, Databox, Mixpanel, Arena Calibrate, Zoho Analytics, Mode, InetSoft, Tableau, Praxie, Smarten Augmented Analytics and DashThis.

What is a good KPI? ›

Good KPIs:

Provide objective evidence of progress towards achieving a desired result. Measure what is intended to be measured to help inform better decision making. Offer a comparison that gauges the degree of performance change over time.

What are KPI tools? ›

WHAT ARE KPI TOOLS? KPI tools are a business reporting solution used by companies to track, monitor, and generate actionable insights from key performance indicators specific to the company's business objectives to achieve sustainable business development and, ultimately, profit.

What are KPI metrics? ›

What are KPIs? KPIs or Key Performance Indicators are the metrics by which you gauge business critical initiatives, objectives, or goals. The operative word in the phrase is “key,” meaning they have special or significant meaning. KPIs act as measurable benchmarks against defined goals.

Is conversion a KPI? ›

The conversion rate is a crucial KPI not only for your PPC campaigns but also for your website and landing page performance. Here's all the information you need about this KPI, what it is, why it's important, how to calculate it, and way more!

What metrics should a small business track? ›

The most important metrics for small businesses and startups are sales, operational, and customer service metrics.
...
Customer service and customer relationship:
  • Customer lifetime value.
  • Customer retention rate.
  • Customer satisfaction (NPS or CSAT)
  • On-time delivery rates.
  • Shipping accuracy.
2 May 2022

What is simple KPI? ›

A simple, easy-to-use dashboard that takes complex data and turns it into accessible and understandable visuals. Create top-level summaries of your KPIs to share across your organization. Choose from various charts, graphs, league tables, and widgets that help communicate an accurate understanding of your data.

What is a KPI scorecard? ›

A KPI scorecard is a term used to describe a statistical record that measures progress or achievement towards a set performance indicator. It gives decision-makers the ability to combine specific metrics in order to gain an overview of a complete performance scorecard.

How do you make a good KPI? ›

Steps to follow to write effective KPIs
  1. Step 1 – Identify your organization's strategic objectives. ...
  2. Step 2 – Define the criteria for success. ...
  3. Step 3: Develop key performance questions. ...
  4. Step 4- Collect supporting data. ...
  5. Step 5: Determine what to measure and how frequently you should measure. ...
  6. Step 5: Develop the KPIs.

What are KPI reports? ›

A KPI report allows business leaders to quickly and easily review and analyze key performance indicators (KPIs) and thereby know how their organization is performing against specific strategic goals.

What should a KPI always contain? ›

Business KPIs: 5 important characteristics to be effective
  • Simple. A KPI should be simple, straightforward and easy to measure. ...
  • Relevant. ...
  • Aligned. ...
  • Actionable. ...
  • Measurable. ...
  • Choosing the right BI solution to measure your business KPIs.

How many KPIs should you have? ›

Try not to have too many KPIs: the optimum number for most areas of a business is between four and 10. Just make sure that you have enough to measure how your team or organization is performing against your key objectives.

How do you find KPI targets? ›

Here's a process for setting actionable KPI targets:
  1. Review business objectives.
  2. Analyze your current performance.
  3. Set short and long term KPI targets.
  4. Review targets with your team.
  5. Review progress and readjust.
5 Jul 2017

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