Key Performance Indicators for marketing are essential to gauge the success of your marketing strategy. If you are an app developer keep reading to learn more about KPIs marketing and how it can help you.
What is Marketing KPIs?
Key Performance Indicators are commonly referred to as KPIs. They reveal how much progress is being made in reaching your goals.
If they show little to no progress you know it’s time to make a change. Check out the 5 pillars of the most successful apps to get help with improving KPIs.
It’s important not to confuse KPIs with metrics. These two terms are often used interchangeably, but not all metrics are KPIs. Although all KPIs are metrics, some metrics are simply numbers that are used within KPIs.
Marketing KPI Examples
There are many different metrics digital marketers can choose to track and analyze. Here are some of the best KPIs.
Cost Per Thousand Ad Impressions (CPM)
This calculation requires the total campaign cost and the total number of impressions. Divide the former by the latter, then multiply the resulting number by 1,000.
(Total Cost/Total Impressions) X 1,000 = CPM
Click-Through Rate (CTR)
Use this when you want to know how often an ad was clicked after being shown. This percentage can be calculated by dividing total clicks by total impressions.
Total Clicks/Total Impressions = CTR
Cost Per Click (CPC)
Keep an eye on your advertising expense with this metric. Divide the total expense of the campaign by total clicks to figure out how much each click is costing you.
Total Expense/Total Clicks = CPC
Customer Acquisition Cost (CAC)
Simply divide your advertising expense for a certain period by the number of new customers acquired within the same period. This will tell you how much you are spending to get each new customer.
Total Advertising Cost/New Customers = CAC
Don’t look at this KPI by itself. Compare it to each customer’s lifetime value.
Customer Lifetime Value (CLV)
Make sure the cost of your customers doesn’t exceed their contributions to your profit.
To calculate this KPI, you will need the average price of a single customer’s transaction, the average number of transactions per year for a single customer, and the average number of years a customer continues to purchase from you.
Next, multiply these three numbers to get the average CLV.
Average Payment X Average Transactions Per Year X Average Years = CLV
In order to make a profit, CLV should be higher than CAC.
This rate shows how many users stopped using your app. To get the monthly rate, add the number of new users acquired in that month to the number of current users at the start of the same month.
Then take the number of users you lost by the end of the month and divide it by the sum calculated from the first step.
Users Lost By End Of Month/(Users At Start Of Month + New Users Added That Month) = Monthly Churn Rate
What Digital KPIs should you track?
The answer to this question definitely depends on what type of app you are marketing.
Here are a few examples:
- Game app developers benefit from focusing on increasing the average session length.
- Average content shares are important for apps that belong in the social category.
- Average order value and average transactions per user and helpful KPIs for E-Commerce apps.
Your current goals also factor into your decision about which KPIs to track. Maybe you want to improve user retention. In that case, work on decreasing churn rate. Or maybe you want to cut costs. CAC might be an important KPI to help meet that goal.
Your goals are likely to change from time to time, so remember to periodically compare your goals to your KPIs to ensure you are still tracking the right metrics that will help you achieve what you want.
Digital marketing KPIs should be analyzed in order to get the best results for your app. If you haven’t started keeping track of them already, why not start today?
But don’t do it alone! If you need more help with your app, contact a specialist at RankMyApp.