Know Your Accounting Marketing Jargon
Chris O'Day, ALL CPAs
Your managing partner surprises you with a 15-minute meeting to get a marketing update. You begin to regale him with recent triumphs; you tell him about a LinkedIn tax post that received 300 impressions, how a tax manager had a quote in the local paper, and that a client gift was well received. However, instead of being enthralled, he seems annoyed and gives you a look conveying, “What does this have to do with the price of tea in China?”.
He does not have time to care about every little marketing detail (even though we think everyone should!). He wants to know the bottom line: how well are your KPIs performing and are they helping the firm achieve its goals.
What is a KPI?
A KPI is not just the initials on your friend Kyle Patrick Ingersoll’s LL Bean backpack. In marketing, and business in general, a KPI stands for Key Performance Indicator (KPI). According to Klipfolio.com, “A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives.”
- The KPI is the metric you deem most important to track towards an intended result. Imagine your firm is putting on a tax seminar and your overall objective is to have 300 people register. Your KPI would be the number of registrants. Tracking the KPI will allow you to measure if you are on course to reach your goal.
- KPIs are used to improve performance and achieve goals. If your partners decide marketing’s overall role is generating new leads, then an important KPI would be number of leads generated. That will give you clear goals to develop and go after. For example: We need to develop x number of leads in a quarter and beat the previous quarter.
- KPIs provide evidence to informed decision making. If the KPI for your firm’s annual year-end tax seminar is number of registrants and they have been decreasing for years, that may indicate it is time to sunset or revamp the event. Also, if your objective is to generate leads and you see some tools generating more leads than others, it will give you evidence of where you should spend your time and money.
What makes a good KPI?
Good KPIs allow marketers to focus on what matters most. When your managing partner asks about progress towards a key business objective, you are able to give them a quick and definitive answer because you have well defined and tracked KPIs.
Good KPIs should be:
- Be well-defined and measurable.
- Be communicated throughout your firm and marketing department
- Be objective and actionable
- Be crucial to achieving your goals
Let’s say your firm is launching a redesigned website. The goal with the website is to drive more traffic to your site and convert them into leads. Two crucial KPIs you would want to track are number of website visitors and number of conversions from the site.
How should I develop my KPIs?
When setting your KPIs, start with your firm’s strategic goals, for both your firm and your marketing department. Then decide what variables are crucial to achieving those goals. If you are trying to hire more staff, then you may want to track where and how many applicants you receive from different sources (career fairs, online job postings, recruiters). If your firm is trying to generate new business, you will want to track leads and where they are coming from.
Note: It is important to be on the same page with management when setting your KPIs. That way when your partner calls you in for that 15-minute meeting you can report on mutually agreed upon goals and KPIs.
When setting your KPIs, try to stay away from vanity metrics like number of impressions on a LinkedIn or likes of an Instagram post, if they do not correlate to your business goals (if they do, than yes, pay close attention to them!). You should focus your time and energy on KPIs that help you reach your firm’s goals.
Examples of KPIs Accounting Marketers Can Use:
- Number of prospects
- Number of leads generated
- Cost per lead
- Conversion rate
- Average conversion time
- Number of prospects by source
- Average client value
- Customer Lifetime Value (CLV)
- Customer Acquisition Cost (CAC)
- Customer satisfaction & retention
Well defined and thoroughly tracked KPIs make your job as an accounting marketer easier. Setting your KPIs will allow you to focus your time and energy on what really matters. You can clearly track how close, or far away, you are to achieving your firm’s goals. It will also allow you to cut through the fat and report to management on crucial metrics. So, go ahead, review your goals, set your KPIs, and start to manage what really matters.