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Marketing 360® Blog

This is Why You Need to Put KPIs Before ROI

Post By Scott Yoder | Paid Search | Social Media Marketing

Before you can get ROI (return on investment) from your marketing, you must target the KPIs (key performance indicators) that will get you there.

Many business owners new to marketing give in to temptation. They want to make money, so they target profits – without considering all the steps needed to generate a profitable event.

When we talk to people about marketing, they always ask about ROI. It’s not uncommon, in fact, for a business owner to ask us for proof (or a guarantee) that a marketing tactic will produce ROI – before we’ve even started.

Their thinking reveals a fundamental fault. They’re putting ROI before KPIs.

The Key to Return

There are a lot of acronyms in marketing – so many it can get annoying.

However, the one for key performance indicator is not superfluous. KPI is an acronym you should be using all the time when you discuss marketing.

A KPI is a data metric. In any given campaign you’re running, you’ll probably have one central KPI. This data metric is the main evidence for the effectiveness of your tactics. You measure these KPIs at time benchmarks you set when you create the campaign.

For example, we did a website redesign for a client. We wanted to measure conversion rates, comparing the 180 days before the redesign to the 180 after. Here’s the data:



Conversion rates went from 3.30% to 6.36% after the redesign. This KPI tells us the new design is doing a better job of motivating people to act, which was the goal of the redesign.

What’s the Difference Between a KPI and a Goal?

A campaign goal is connected to an outcome you’re trying to achieve. It’s an action you want to generate that moves someone closer to becoming a customer.

A KPI may be the same as the goal, but a KPI is analyzed in the context of the advertising collateral that produced the action.

For example, with the web page design, the goal is to get more conversions, which was also the KPI.

But to have this as a KPI, we had to isolate the page and make sure other factors weren’t influencing the data. We had to track the traffic to make sure it was statistically equal on both the treatment page and the original.

You might achieve ROI goals because of multiple factors. But a KPI is directly tied to the collateral used in a campaign for a specific period of time.

Broad Level KPIs

Individual campaigns have targeted KPIs connected to a certain result, but there are also many broad level KPIs that indicate that your marketing efforts are working overall.

In Marketing 360®, you can run top line analytics and period reports that show you long-term trends which are broad-level KPIs. Increases in website traffic, clicks, keyword rankings, and of course conversions indicate that your overall marketing efforts are working.

In fact, we’ve noted a brand awareness KPI that’s also an important ROI indicator, which is an increase in brand or business name searches.

This is a great example of a KPI which demonstrates broad marketing campaign effectiveness. If ready to hire/spend customers are searching for you online by name, it’s a key indicator that your marketing campaigns are working.

This is also a KPI you can connect to ROI. You can track search queries for your brand name and directly connect them to sales or conversions that result in revenue.

For example, this roofer gets conversions from leads doing an exact match search on their name:

This is a significant KPI that tells the business their brand awareness efforts are paying off.

What ROI is Made Of

The purpose of this article is to get you to refine your approach.

It’s normal, as a businessperson, to start your marketing and advertising thinking about profit-generating events. We want leads and sales that directly contribute to revenue, which – in turn – we measure as ROI.

But this approach leads you away from a vital understanding about modern consumers.

It’s very likely that your customers are going to be on a shopping journey that precedes actually spending money. Online consumers research information and make personal connections with brands. They check reviews and get a sense of the types of people who buy your product.

They want to trust you and feel your product is a fit for how they view themselves. They’re methodical, researching their options carefully in an effort to avoid buyer’s remorse.

KPIs measure important steps people take on this buying journey. They target actions and events that signal the person is moving in the right direction.

Consider that’s it’s a viable tactic to create an ad campaign with a target KPI that actually loses you money. Your direct return on ad spend is a net loss.

That doesn’t sound good at all for ROI. However, there are many advertising tactics, including social media ads, that taken by themselves don’t generate revenue.

However, they do generate awareness, which is the KPI you measure for that specific campaign. In time, you look for these campaigns to increase actions like direct brand name searches which you can measure in terms of ROI.

You goal with marketing is to get a return on your investment, but don’t make the mistake of starting with that measurement.

Instead, understand and target the key actions which indicate you’re generating the right kinds of responses from people.

ROI is made up of a bunch of KPIs. Don’t make the mistake of planning your marketing as if that wasn’t true.