As marketers, we thrive off performance metrics. It’s crucial to understand your campaign’s overall performance and how you can make adjustments along the way to improve the outcome. But how do you utilize data during and after a campaign? When it comes to calculating ROI (return on investment), many marketers automatically start to measure KPI (key performance indicator) metrics in the first month of a campaign. The problem is that it is too fast to begin gathering data and isn’t providing an accurate measurement of your ROI.
According to a study conducted by LinkedIn, 63% of digital markets aren’t confident in their ROI metrics. That is such an easy fix.
So, what is the difference between KPI and ROI, anyway?
KPI is more of a micro measurement that calculates how a campaign is doing along the way. ROI is the big picture, the final result. KPI looks forward, and ROI looks back. KPI is crucial because it guides goals and helps you stay on track to reach the desired result. In the same LinkedIn study, 78% of digital marketers start measuring ROI within the first month of a campaign’s launch; thus, they aren’t getting a reliable representation of the performance metrics. Many business sales cycles take much longer, likely six months to a year.
This is how KPIs can help marketers drive the success of their campaigns. Instead of jumping too quickly to provide ROI reports to sales and finance teams, utilize KPI metrics to show how the campaign is currently performing.
Slow down. Look at current performance.
KPI metrics allow you to assess the short-term impact and don’t give an accurate reading of the big picture. This is extremely helpful in the initial stages of a campaign and can help improve the outcome. Digital marketers should regularly measure performance metrics to adjust as needed to improve the result. These metrics are a more forward-looking predictor, whereas ROI metrics mark a campaign’s conclusion and look back at the overall performance.
The key takeaway is not to move too fast. We know that digital marketers are often under pressure from outside players to provide proof of performance to secure future budget asks, and because of that, they’ll measure ROI too early. Measure KPIs and let those metrics guide you to a better result.
Need help using KPI and ROI metrics to drive growth? Contact the GROWL team and start utilizing performance metrics to calculate valuable and accurate information for your business’s marketing efforts.