KPI: what are the different types of performance indicators for marketing
KPI: what are the different types of performance indicators for marketing. Quality management should use data that effectively show how your business is doing. For this, it is important to know how to choose the best Key Performance Indicators (KPIs) for each strategy. KPIs are performance indicators that track the key processes of a company’s actions. Their number strongly influences the success of an action: due to their specific analytical nature, changes based on these indicators can promote the growth and strengthening of the company.
Return on investment (ROI)
Return on investment (ROI) is one of the most important metrics for your business. Basically, ROI calculated the affirmation of investment and can be applied in different situations. Its formula is given by:
ROI = (Profit after investment – Initial investment) / Initial investment
Thus, the higher the ROI, the more assertive the action and the better the investment. A zero return on investment indicates an investment that has no effect, and a negative return on investment indicates a bad investment.
The average ticket
The average ticket is a fundamental key indicator for any strategy. It calculates, on average, how much each customer spends with your business over a given time period. Its formula is given by:
Average ticket = Revenue / Number of customers over a given period
But be careful: before analyzing this KPI, you must keep in mind the average cost of your product. After all, if you have more expensive products, it is natural that the average ticket will be higher.
The customer acquisition cost (CAC)
CAC shows how much your business has to spend to get a new customer. Its formula is calculated like this:
Customer acquisition cost = Customer acquisition costs / Number of new customers in the period.
The turnover index
Turnover rate = [(Number of dismissals + number of admissions) / 2] / Total number of employees
Which increases costs with selective processes and project continuity. Generally, the higher this index, the greater the need for appreciation and motivation programs.
Net Promoter Score (NPS)
The Net Promoter Score (NPS) is both a methodology and an indicator. It shows how satisfied customers are with your business, based on two main questions:
From 0 to 10, what are the chances that you sponsor the company?
The higher your company’s NPS, the higher the care and service quality index, and the greater the chances of loyalty.
Receiving indicator
Some entrepreneurs confuse receiving and invoicing, but they are very different from each other. It is even possible for a company to have good invoicing even when it is not able to receive all its due payments.
This happens if she sells on credit, for example. A trick to achieving this result is to avoid granting credit to those who are in default.
Another solution is to invest in after-sales, so that the consumer values the relationship with the company, choosing to honor their debts to avoid exhausting the company and to be able to buy again.
In addition, investing in the efficiency of the collections sector can allow the company to recover values that it already considered lost.
PMR: (Total Accounts Receivable/Total Sales Revenue) X 360
