Marketing KPIs vs Marketing ROI – What’s the Difference?

Every marketer I know tracks multiple KPIs, but they struggle to answer the question, what is the return on our marketing investment? This article will help make sure that never happens to you.

KPI stands for key performance indicator, a quantifiable measure of performance over time for a specific objective. KPIs provide targets for teams to shoot for, milestones to gauge progress, and insights that help people across the organization make better decisions. There are many marketing KPIs for example:

    • Awareness:
      • Impressions
      • Reach
      • Brand awareness Lift
      • Share of Voice
    • Consideration:
      • Social Engagement
      • Company Followers
      • Website Visitors – Time Spent, Page Views, and/or Bounce Rate from Website
      • Email open Rate
      • Cost per Click – Click-Through Rate
    • Conversion:
      • Leads Created
      • Web site to lead conversion rate
      • Cost per Lead
      • Lead quality Score
      • Lead to MQL rate
      • MQL to SAL conversion rate
      • SAL to SQL conversion rate

Many of these KPI are helpful and can be leading indicators of future success. But none of them help you simply explain to your CEO whether your marketing program is sufficiently contributing to pipeline and revenue objectives at reasonable cost. Return on investment (ROI) refers to the amount of money you make that can be directly tied to an expense or series of expenses. Here are the 6 metrics you must focus on to demonstrate ROI to the business:

    • Total number and dollar value of marketing sourced opportunities vs goal: This metric focuses on how many leads become an opportunity vs your goal.
    • Marketing sourced and total pipeline coverage vs. revenue goal: This measures the ratio of the dollar value of marketing sourced and total opportunities in the pipeline to an upcoming revenue target. It is a great way to see if you’re on track to meet your goals. Since you will not close every opportunity, I’ve found that the only way to consistently hit revenue targets is if your open pipeline is at least three or four times higher than the current goal.
    • Marketing sourced revenue vs. revenue goal: This measures the ratio of the dollar value of marketing sourced revenue to your revenue target.
    • CAC: CAC is calculated by dividing all the costs spent on acquiring customers (marketing and sales expenses) by the number of customers acquired in each period. The lower the CAC, the higher the profit.
    • ROAS: Return on Ad spend is calculated via the following formula revenue from ad campaign / cost of ad campaign.
    • MROI: Marketing ROI is calculated via the following formula (current value of investment – cost of investment) / cost of investment] x 100