An Insider Guide to the Best Marketing KPIs that Measure Agency Results

If you’ve ever worked with a marketing agency, I’m sure you’ll agree that KPIs make a huge difference in figuring out your return on investment.

But understanding exactly what you should be measuring can be pretty confusing, right?

Sure, agencies often put together beautiful reports with tons of data for you to review.

(And don’t get me wrong, that’s very helpful.)

But if you’re wondering which marketing KPIs actually reveal insights into agency results, you’re going to love what I’ve prepared for you here.

This post gives you an agency insider’s perspective on exactly which KPIs matter most when measuring your return on investment with an agency partner.

Intrigued? Then let’s get right into it.

It’s About More Than Money: Here’s How Measuring KPIs Helps Your Business (and the Agency, Too)

On the surface, measuring KPIs may appear to be all about the financial return.

And of course, that’s an important measurement of success.

But marketing KPIs also help your business in some less-obvious ways, too:

They Clearly Define Goals and Expectations

I’m sure you have a good idea of what “success” looks like when partnering with an agency.

But the problem is, you might not be clearly communicating those goals and expectations to your contact at the agency.

So they think you’re pleased with their work, when the truth might be the complete opposite.

And that’s precisely why agencies appreciate refined, measurable goals – they cut out all the gray area on what’s expected to deem the partnership a success.

They Reveal Where (and When) You Should be Investing More

I recently wrote a post on measuring your customer acquisition cost (one of the primary KPIs I’ll discuss below).

The great thing about CAC is that it doesn’t just tell you when your acquisition cost is too high.

Your CAC also reveals when you’re not spending enough.

And that could mean you’re missing out on opportunities to bring in more business.

So, when an agency has a positive impact on your CAC, you gain valuable insight about the whitespace in your target audience.

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They Make Agencies Better

You know that KPIs create accountability.

But when partnering with an agency, they can actually do much more than that.

Marketing KPIs not only ensure agencies hold up their end of your agreement, they also allow agencies to better tailor their services to your business.

Here’s an example:

You might partner with an agency to try and drive more leads to your sales team.

That’s a pretty broad goal, and so an agency could take any number of different approaches to make it happen.

But if you’re using KPIs to measure success, the agency knows exactly which parts of their team need to get involved to maximize results.

And there’s one additional benefit to agencies –  KPIs identify weaknesses (either in process or personnel) that can help make their business better.

Sure, that may not help you today, but it may help create a better partner for the long-term.

So when you consider the positive impact on your partnership with an agency, setting KPIs becomes a no-brainer.

But which KPIs should you focus on specifically?

Let’s take a look.

These are the 7 Marketing KPIs You Should Start Measuring Today

1.  Lifetime Customer Value

I’m sure you’d agree that lead generation is only one piece of your larger marketing strategy.

And as a result, that the primary measure of customer value isn’t just their initial purchase, but the total amount of revenue they drive over their lifetime as your customer.

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Adam Toporek explains it well on his blog, Customers That Stick [Note that the bold is my own]:

“Customer Lifetime Value attempts to determine the economic value a customer brings over their “lifetime” with the business.  At the heart of understanding [LTV] lies the recognition that a customer does not represent a single transaction but a relationship that is far more valuable than any one-time exchange…if you don’t know what a client is worth, you don’t know what you should spend to get one or what you should spend to keep one.”

That’s exactly why measuring lifetime customer value can be such a valuable marketing KPI.

An increase to LTV often means your agency is not only bringing in quality leads for new business, but also uncovering opportunities with existing customers.

And that’s an easy way to see the return on your investment in an agency partner.

But there’s an additional benefit – a higher LTV can then actually help improve the next metric:

2.  Customer Acquisition Cost

Customer acquisition cost (CAC) should be a primary KPI for your business whether you’re working with an agency or not.

After all, CAC tells you a lot about your business, including:

• If your product or solution can actually turn a profit

• Which marketing campaigns work best for you
• As mentioned earlier, whether you’re missing opportunity to be doing more with your marketing

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And when it comes to working with an agency, CAC can tell you whether the partnership yields positive results.

If your CAC is going down, that means more leads are converting at a cheaper cost (and/or delivering more LTV) to your business.

As budget frees up, reinvesting in more campaigns can help your business bring on more leads or penetrate new markets.

3.  Email Click-Through Rate

I’m sure increasing your email click-through rate is a big challenge facing your business.

In fact, 53 percent of marketing teams claim low click-through rates are the most challenging obstacle to email marketing success.

But I’m sure that’s exactly why you’ve hired an agency expert, right?

It’s completely reasonable to expect that any agency you hire has the expertise to increase click-through rates with better targeting and improved content.

And that’s precisely why email click-through rates make complete sense as a marketing KPI.

4. Site Traffic to Lead Conversion Rate

And the exact same thing goes for website conversions.

Of course, agencies should have a significant impact on your site traffic, page views and click rates.

But a word of warning: don’t get caught up in those vanity metrics.

You can have site traffic increase 20x, but if you’re not getting more leads in the pipeline, then it begs the question…

Who cares?

The only site metric that ultimately matters is how many of your site visitors actually convert into new leads for your sales team.

Measure it compulsively and make sure your agency partner knows you don’t really care about the fluff.

5. Social Media Engagement

When it comes to measuring content quality, social media engagement on Twitter, Facebook and LinkedIn should be a simple metric that tells you a lot.

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If follows, likes, comments, shares and retweets are up, naturally that means the agency is putting together quality thought leadership that resonates with your audience.

6. Inbound Link Building

And you could say the same for inbound link building.

As reputable sources link to quality content, your site gets a boost in Google’s search ranking.

And that means more traffic (and a boost to brand reputation).

Sean Si over at SEO Hacker explains a bit more on his blog:

“It’s simple, really – the more links you have coming into your site just means that more people are referring you for something you’re good at…Your number of links is the only way Google can see how valuable your site is to other people.”

So if an agency is creating quality content, you should be able to measure success based on the number of inbound links to that material.

And of course, the most important measurement of all…

7. Are you making money?

I’ll admit it seems like a simple question.

But at the end of the day, all of these metrics only matter if you’re not investing more into an agency than you’re making from their efforts.

So be sure to constantly keep an eye on the impact on your revenue above all other metrics.

Agencies know that’s what matters most to you and should do everything the can to help you see that ROI.  

That leads to my last point…

One Final Note

You don’t need to do this all on your own.

A great agency will happily talk through KPIs with you and incorporate the numbers you care about the most into their weekly reports.

But you need to know what to ask for.

And now, after reading this post, hopefully you feel confident in the metrics that reveal the biggest insights into your agency’s results.