KPIs for live marketing

Conventional wisdom has it that many metrics of live marketing activities (experiential marketing, outdoor/indoor activations, etc.) cannot really be measured. However, digital technologies from the area of footfall analytics allow companies to gather a lot of data about their live marketing activities and therefore many additional KPIs become available to them – and if they can measure it, they can improve it.
KPIs

Trusting your gut/instincts is great as long as everything is going well. If you want to be able to base your decisions on more than pure gut feeling, however, it is important to combine instincts with hard facts and consistent data.

In today’s digitalized world, companies have more access to digital tools that help them collect data than ever before. Key Performance Indicators (KPIs) are clearly defined and quantifiable metrics that allow a company to assess its performance. Generally speaking, KPIs focus on topics like sales, growth, customer satisfaction, etc. Depending on the type of company and the type of business activities, different KPIs are relevant to them. Overall, KPIs should allow business owners to monitor performance (in real-time), identify weaknesses and make informed decisions on future business activities.

 

KPIs are important metrics for companies from a big variety of sectors for both, their digital as well as their offline activities.

 

As an example, important KPIs for the retail sector include amongst others:

  • sales per employee
  • sales per square meter
  • average transaction value
  • Gross Margin Return on Investment (GMROI).

 

These KPIs are rather easy to calculate as all the necessary numbers (e.g. number of sales, number of employees, gross profit, inventory cost, etc.) already exist in the accounting.

 

Conventional wisdom has it that many metrics of live marketing activities (experiential marketing, outdoor/indoor activations, etc.) cannot really be measured. Thanks to today’s digital technologies, brands, marketing agencies or event organisers can collect a variety of data that allows them to calculate many additional KPIs. In this article, we are focusing on these KPIs and the ways the necessary data can be collected.

 

KPIs, goals, and measures of success

 

Before starting to collect and analyse KPIs, the objectives of a live marketing campaign, as well as the strategies to reach those objectives, should be defined.

Of course, absolute numbers regarding sales, number of visitors, etc. are important and good to know. However, standing alone, they lack context and don’t provide the information that is really relevant to a company.


Conversion rate

Conversion rate refers to the proportion of users who have completed the desired action (that are converted to leads, transactions, sales, etc., depending on the type of activity). For example, a retail store would focus on the number of visitors that purchased something at a store whereas a brand owner at a roadshow is probably more interested in the number of visitors that turn into leads. To give a numerical example, if there are 1000 visitors at a roadshow, and 50 of them turn into leads, the conversion rate is 50/1000 or 5%.

 

Why your conversion rate is important?

The conversion rate indicates how good a company is at converting visitors to leads, transactions, sales, etc., so it is a good measurement of success. In terms of offline marketing activities, it measures the effectiveness of a specific activity. While it is nice to attract a big number of visitors to your store/event/roadshow, etc., this is only the first step. The main challenge is converting those visitors in order to generate profit.

 

How to use the data about your conversion rate?

If you want to improve your conversion rate, you will have to make some changes in your live marketing activities – such changes could include layout adaptation, more staff, special sales promotions or a change of location.

If you compare the conversion rate before and after a change in marketing activities, you get a good sense of how successful a certain campaign was.  

Footfall traffic

Footfall refers to the number of people that entered a specific area/location. (Find out more about footfall analytics). Footfall traffic is a major part of any successful physical marketing activity. Getting more people to come to your store/roadshow/trade show/sampling increases the chance that they can be converted.

Given the importance of this KPI, it is essential, that it can be measured in a reliable and consistent way. You can use people counting sensors to measure footfall. There is a broad variety of different technologies on the market of people counters, however, the more advanced people counting sensors offer a high accuracy as well as a variety of additional data that can be gathered.

 

Why footfall traffic is important?

By using people counters to measure footfall, a company gets important insights into the success of certain marketing activities (e.g. promotions, samplings, roadshows, etc.). As an example, if you set up a stand in a shopping mall where you organize a sampling of a new product, you want to measure how many people entered the area around your stand. While this doesn’t give you data on how many people have sampled the product, measuring footfall is a good measurement to see if such a product sampling has an adequate number of potential customers.

Further, footfall traffic data is necessary to calculate the conversion rate – (see above).

  

How to use footfall traffic data?

Footfall traffic data provides important information to draw comparisons of the total number of people that entered an area over time as well as over different locations.

In the case of a retailer, for example, people counting sensors give you an overview of if more people visited your store after you have launched specific marketing activities (advertisements, sales promotions, etc.) Such comparisons give you a good indication if a marketing campaign has been successful or not.

On the other hand, if your company organizes a roadshow, footfall traffic data allows you to compare how many people have been attracted and thus how many potential customers/leads there are at each location.

 

Dwell Time

Dwell time refers to the amount of time a visitor spends in a certain area/location. It is a particularly important metric for the retail sector, but other sectors can also gain important insights from it. In order to determine the average dwell time of your visitors/customers, the arrival time, as well as the exit time of each person, has to be measured. Some of the advanced people counters used to measure footfall can also gather reliable data about the dwell time of visitors. Amongst them, WiFi sensors or optical camera sensors are best suited to do so – WiFi sensors can anonymously track the signal sent out from a visitors’ smartphone and determine the time of entry/exit, and camera sensors can determine when a person has entered/exited the field of vision.

Why dwell time is important?

In general, it is agreed that if visitors decide to spend more time at an activation/in a store, the chance of converting a customer (e.g. making a sell) is higher, so the goal is usually to increase the dwell time.

However, there are cases for which a low dwell time is a goal, like for example coffee shops/fast-food restaurants or stores where you pick up specific goods that are focusing on high turnover. In such cases, a high dwell time is usually an indicator for issues with the queue management or with the store layout (e.g. customers are not finding the items they are looking for).

For marketing activities like promotions or samplings, the metric of dwell time is rather irrelevant as people usually don’t stick around the activity but it’s rather more of a grab & go concept.

Thus, the significance of the metric dwell time and the question if it should be high or low depends on the kind of live marketing activity a company is pursuing.

 

How to use the data about dwell time?

Depending on your goal being a high or a low dwell time, data about the dwell time of visitors can be used differently.

If high dwell time is the goal, a company can take different measures in order to increase the dwell time of its customers. Examples could be a sales promotion for a retail store, a game to engage customers at a roadshow, or the option to test several different products at a product launch event. Comparing the average dwell time before and after the implementation of such measures provides a good overview of the effectiveness of these measures.

On the contrary, if low dwell time is the goal, a company has a different set of measures it can take to achieve said goal. For example, increasing staff to support customers or better placement of specific products.

 

Conclusion

Digital technologies from the area of footfall analytics allow companies to gather a lot more data about their live activities and therefore many additional KPIs become available to them – and if they can measure it, they can improve it. By measuring and comparing KPIs focusing on customer engagement like overall footfall traffic, dwell time or conversion rate, companies get important insight that allows them to determine the effectiveness of their live marketing campaigns and to optimize them in the future.

 

To get a full understanding of such metrics, it is important to not only collect the relevant data but to have access to a software solution that processes the data for you and visualizes them in a comprehensible manner. livealytics provides its customers with an end-to-end solution that includes the collection of data with a variety of different people counters as well as with access to the livealytics platform where the relevant data and KPIs are visualized according to the individual customers' needs.

 

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If you would like to find out how your company can benefit from footfall analytics, have a look at the livealytics website or book a call with us