With so many metrics available across various analytics tools, how do you know which ones are important for the overall ROI of your business today?
When it comes to reporting on marketing, there are key metrics that really matter, and then there are those that are just there for show.
Before we can dig into the metrics, it’s important to understand what marketing metrics are. Marketing metrics are specific values used by marketing teams to determine or demonstrate the success of your marketing strategy, by measuring the results of your campaigns across all relevant channels.
As marketers, we need to remember the real reason anybody markets a product or service is to ultimately sell what they’re offering. Spending money getting people to simply give you a “thumbs-up” is hardly worth the effort if they’re not going to at least show interest in what you’re selling and either immediately or at some point convert to leads and closed deals.
Why use metric measurements to gauge the success of your marketing?
Running successful marketing campaigns is like baking a cake, you have to add a bit of this, a bit of that, watch it rise and sometimes watch it flop before it becomes the perfect product. No marketing campaign has ever just succeeded by throwing out a message and hoping to sell a product (the “spray and pray” approach).
According to Lead Forensics, a turbo-charged lead generation software tool, “When properly measured and analyzed, metrics can offer your team advanced insight into your target audience, what they need and how they respond to your brand messages. This helps you adapt everyday processes and plan future strategies to best fit your ideal buyers, and gain exceptional new business results to boost sales success.”
Avoid placing too much value on ego or vanity metrics
According to Forbes Magazine, “If you’re still counting email opens, page views and ad clicks, your days in marketing may be numbered. Vanity metrics like these aren't enough. Today’s marketers need to do more than measure something that has already happened. They need to know why it’s happening and track that impact through the sales funnel to tie their marketing campaigns to customer lifetime value.”
There is a plethora of metrics lying at marketers’ fingertips that give real, useful data. Make sure that you aren’t just reporting on the shallow views, such as the number of likes, retweets, open rates or delivery rate – those won’t tell you whether you sold any product or why not. Rather look at conversion rates, leads generated, purchasing behaviour referrals – that’s where the gold sits and that’s what ultimately influences your business ROI.
Here’s a list of the marketing metrics that really matter nowadays
1. Customer Long Term Value (LTV)
A customer’s long term value is a very critical metric to monitor, evaluate, optimise and help drive essential business decisions. It is the total revenue a business can on average expect from a single customer.
Mailchimp, a marketing automation platform, says, “You can estimate your Customer Lifetime Value with the following steps:
- Forecast a customer’s lifecycle with your business
- Estimate future products purchased to forecast future revenues
- Estimate the costs associated with producing and delivering future products
- Calculate the current value of those revenue amounts.”
2. Cost Per Lead (CPL)
Lead Quizzes, an online quiz platform, says, “In the simplest of terms, CPL is the amount of money you spend in order to generate a single new lead for your business. It’s used to measure and monitor the effectiveness of marketing campaigns. If you’re spending more money on acquiring a new lead than you’re earning from having that particular lead become a paying customer, you must be doing something wrong, right?”
Qualified leads are those that maintain interest and keep coming back for more. These are the ultimate leads that will or should be converted to closed deals. Mapping their journey from lead to customer also helps you measure what actions they took to convert and then apply those learnings to other customers. Every lead has a cost associated with it, but it is up to each marketer and business to determine this particular value.
3. Marketing attributed value
This is the actual rand value that it cost to market to the lead, and this is an extremely important metric. Here you have to honestly look at the channels you are using, the audience you have selected and the amount of money you’re spending on them. Constantly evaluate whether you are using the right channels, or if you could be spending less money marketing to where your audience “hang-out” more frequently. Spending a fortune on Twitter lead generation cards may not be the right platform for your brand; consider whether your market spends more time on Instagram for example and whether your content will be better received there. Rather be in the right places - even if that’s less places - than trying to be everywhere all at once.
4. Conversion rates
How good is your content at attracting users? You have to look at the content you’re sending out, and then how many of the people you’re marketing to are actually interested enough to click through, complete a form or engage with you. Really think about what will convert a lead into a customer before launching any campaign.
5. Your average monthly database growth
Database management and growth is the process of keeping your contact database as clean as possible, keeping the data up to date and growing your database by attracting more leads and customers.
Analyse your database all the time to determine whether the data you are collecting is clean. And if your database is filled with hard bounces and unsubscribes, make sure a massive scrub is done so you don’t waste efforts on money on uninterested prospects. It’s also extremely important to know what you want to do with the data you’re collecting, and that it’s the correct data.
HubSpot believes, “You want to create an engaging, personalized experience for leads and customers. Unreliable data undermines those efforts, so having a resource that provides solid visibility into your contact records and the means to consistently maintain them is central to successful contact management.”
6. Average time spent on your website (dwell time)
If you’re directing people to a website, this is a key stat to look at. This will determine whether your initial interaction (like your ad or PPC advertising) has had the right impact and if people are interested in your product. So consider what keywords are driving visitors to your site and focus on those users. If your keywords are not transparent and direct enough, you may need to consider dropping them. Remember, the aim of this is to get users to read your content and consider making an action – sign up, buy, read more, share.
Metric measurements are crucial to determine whether you are spending your money and efforts in the right place. Learn from your audiences, from your successes and your flops. Metrics are the only way to get honest answers. As our sister company, Spitfire Inbound, says, “Always measure what matters!” Now, go and improve your ROI – you have the metrics to guide you!
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