Understanding KPI metrics
Every business has their own definition of success. For some, it’s about achieving a specific turnover, while for others it’s about being able to reach clients from across the country or even internationally. But whatever your business goals are, and whatever success means to your firm, there are some metrics every accounting firm should be measuring.
KPI reporting is a way of keeping track of several ‘key performance indicators’ – those metrics that measure success in relation to your business goals. KPIs are important because they show where your accountancy marketing strategy could do with some improvement, and where it is working well.
What does a KPI report look like?
A KPI report can be tailored to your needs, but here at Whitefish Marketing, our reports are comprehensive enough to give you a clear picture of your marketing performance in relation to your goals, without being a lengthy read.
The executive summary provides an at-a-glance overview, with the following pages going into more detail. Using visuals such as graphs, tables and charts, our reports show you quickly and concisely how all the elements of your digital marketing are performing – including summaries for PPC, SEO, and email marketing.
Essentially your KPI report should give you the key facts and an overview of your conversion performance, so you can understand which channels, website landing pages and keywords are working for you. How you choose to present it will depend on your preferences and those of your management team.
What should my KPI reporting include?
No matter what your business goals are, there are some marketing KPIs you should always track. Let’s take a look at those now.
Conversion rate
Focusing too much on web traffic can lead to an erroneous understanding of your site’s performance. Instead of simply trying to drive users to your site, it’s important to think about their intentions, and whether your site is offering what they need. Your conversion rate shows how many of the visitors to your site are completing a transaction. This is a hugely valuable metric, as it shows if your marketing and your website itself are really working. If you’re attracting lots of visitors, but very few are then converting, you might want to rethink aspects of your marketing, such as the user experience on your site, or the keywords you’re using in your PPC campaigns.
It’s also useful to check what the average conversion rate is for your industry. This helps you to understand whether your marketing might be performing better or worse than competitors. Conversion rate also has an impact on other metrics that you’ll want to measure – the higher it is, the lower your cost per conversion, for example. Let’s take a look at cost per conversion now.
Cost per conversion (CPC)
Cost per conversion is among the most important marketing KPIs for accountants to track. This metric, alongside conversion rate, shows where your spending is most effective. It essentially measures how much you have to spend in order to get customers to complete a transaction. This may be engaging a service, requesting a consultation, or even something as simple as signing up to a newsletter.
Calculating your cost per conversion gives you an indication of how profitable your marketing efforts are. To calculate it, you’ll need to divide your marketing spend – for a particular channel, such as PPC or direct mailing, for example – by the number of clients that converted during the period you are measuring. For PPC this can be done on a monthly basis. With a print ad or mail drop, you might want to change the parameters slightly if, for example, you send a follow up mailing or have bought advertising space for three months.
Customer lifetime value (CLV)
Determining a customer’s lifetime value is helpful for gauging the efficacy of your marketing too. Spending a lot of money to get business from a client who then engages a one-off service at low value doesn’t make much sense, so you’ll want to focus your spend on channels or audiences that are more likely to take out a contract for regular bookkeeping or payroll services, for example. Those, in other words, that will bring in more income, or consistent income on a regular basis.
Armed with CLV data, you can revise your marketing strategy accordingly, so that you spend efficiently for the best return on investment.
Return on investment (ROI)
That brings us on to our final must-have KPI: return on investment. As an accountant, you’ll be familiar with ROI and its importance to any business. From a marketing perspective, your ROI shows you which channels and campaigns have proved most successful, and helps you to understand where your efforts should be focused. It also helps you make decisions on strategy moving forward, and can contribute to wider financial decisions.
Additional marketing metrics
In terms of your website and digital marketing performance specifically, there are several metrics that are worth measuring. Traffic is all well and good, but if users are leaving your site after only a few seconds, it’s an indication that something needs to be changed.
With that in mind, two metrics that are worth tracking in relation to your online efforts are the average session duration and the bounce rate. These are metrics that we always include in our KPI reporting for accountants. The average session duration tells you, on average, how long users from a particular channel are spending on your site.
If it’s several minutes, that’s great – it means they’re finding useful information that helps them with a query or requirement. If it’s only a few seconds, perhaps you need to rethink some aspects of your strategy – such as which page your PPC adverts are linking to. In tandem with bounce rate – a metric that tells you if consumers are looking at any other pages on your site during their visit – this can tell you a lot about the user experience your website is offering.
Marketing services for accountants
If you need help setting up regular KPI reports, or would like assistance with your marketing, contact Whitefish Marketing today. We specialise in marketing services for accountants and can provide comprehensive support for KPI reporting, analysis, marketing strategy and more.
