As marketers, we have many resources available for accessing data and measuring success. Most of these cost a small fortune to purchase, not to mention the investment time needed to learn each platform.
With the abundance of information at our fingertips (often in real-time) courtesy of great tools like Google Analytics, Facebook Insights, Twitter Analytics, or platforms like HubSpot and HootSuite, we have an excellent idea of what is working and how we can continue to improve our marketing plan.
However, not every business should use the same metrics to determine the success of its marketing strategy. Different industries, target demographics and business objectives require tailored key performance indicators (KPIs) that align with your specific goals and priorities.
Whether you’re overseeing your marketing as a business owner, employing a marketing team or hiring a marketing agency, it's crucial to carefully select metrics that accurately reflect your company’s desired outcomes and that effectively measure progress toward achieving them.
.
There are a variety of marketing agency metrics you or your team may use to help improve your marketing and day-to-day performance. In fact, each marketing
campaign may call for different metrics depending on the audience you’re trying to reach and the marketing strategies you are using.
Some common examples of marketing metrics include:
It’s important to note that there is a difference between marketing metrics and KPIs. In the context of marketing, KPIs are specific metrics that indicate the performance of various marketing activities and initiatives. They provide insights into how well a marketing strategy is working and whether it is helping to achieve the overall business goals.
Marketing metrics, on the other hand, are the specific data points or measurements used to assess the performance of marketing efforts. These metrics can include various indicators like the ones we listed above.
KPIs and marketing metrics are closely related in that KPIs often consist of a selection of key marketing metrics that are most relevant to measuring the success of a marketing strategy. KPIs help marketers focus on the most critical aspects of their efforts and track progress toward achieving broader business objectives.
By analyzing marketing metrics within the context of KPIs, marketers can gain actionable insights into the effectiveness of their campaigns and make informed decisions to optimize future strategies.
Marketing metrics and KPIs play a crucial role in driving decision-making. They provide actionable insights and objective data that can help guide any adjustments in your marketing strategy and how you allocate your resources.
Critical KPIs will vary based on your industry, what stage your business is in and your strategic objectives, but here are six that can help drive your decision making:
Customer Acquisition Cost is the metric used to determine the total average cost your company spends to acquire a new customer.
CAC is calculated by taking the total Sales + Marketing Costs and dividing by the number of New Customers in that time period.
Sales & Marketing Costs = program and advertising spend + salaries + commissions and bonuses + overhead in a month, quarter or year.
New Customers = number of new customers in a month, quarter or year.
Let’s look at an example:
CAC illustrates how much your company is spending per new customer acquired. You want a low average CAC. An increase in CAC means that you are spending comparatively more for each new customer, which can imply there’s a problem with your sales, sales team or marketing efficiency.
The Marketing Percentage of Customer Acquisition Cost is the marketing portion of your total CAC, calculated as a percentage of the overall CAC.
This metric is important because it helps businesses understand the efficiency and effectiveness of their marketing efforts in acquiring new customers relative to the total cost of acquisition. This enables you to optimize marketing spending and improve overall profitability.
By tracking this metric, companies can ensure that their marketing investments are generating a positive return and adjust strategies as needed to maximize their acquisition efficiency.
The Ratio of Customer Lifetime Value to CAC is a way for companies to estimate the total value that your company derives from each customer compared with what you spend to acquire that new customer.
The time to pay back the CAC shows you the number of months it takes for your company to earn back the CAC it spent acquiring new customers. This metric is significant since it provides insight into the financial health and sustainability of a business, indicating how long it takes for the revenue generated from newly acquired customers to offset the cost of acquiring them.
Monitoring this metric enables you to assess the effectiveness of your customer acquisition strategies and make informed decisions regarding resource allocation and investment in marketing initiatives.
The marketing originated customer percentage is a ratio that shows what new business is driven by marketing. This determines which portion of your total customer acquisitions directly originated from marketing efforts.
The marketing-influenced customer percentage takes into account all of the new customers that marketing interacted with while they were leads during the sales process.
By tracking this, businesses can better understand the contribution of marketing activities in converting leads into customers, allowing for more informed decisions regarding marketing strategies and resource allocation to optimize overall sales performance.
Determining which key metrics are best suited for your marketing strategy requires a thoughtful and strategic approach tailored to your specific business goals,
industry, target audience and resources.
Here are some tips to help you identify the most relevant metrics, as well as how to get the most out of these metrics:
Start with your business objectives. Understand your overarching business goals and objectives. Whether it's increasing brand awareness, generating sales qualified leads, increasing website traffic to your landing pages, ranking on search engines, driving sales or improving customer retention, your key metrics should directly align with these objectives.
Identify your target audience. Gaining a deep understanding of your target audience's behavior, preferences and needs is critical for increasing your number of leads. Choose metrics that reflect their engagement with your marketing efforts and their progression through the buyer's journey.
Consider your industry and competitive landscape. Analyze industry benchmarks and competitive insights to benchmark your performance against peers and identify areas for improvement. Look for industry-specific metrics that are commonly used to measure success.
Evaluate channel performance. Assess the performance of each marketing channel (such as social media platforms, email marketing, SEO or PPC) based on relevant metrics like traffic, engagement, conversion rates and cost per acquisition. Determine which channels are most effective in reaching your target audience and driving desired outcomes.
Prioritize actionable metrics. Focus on metrics that provide actionable insights and indicate areas for improvement. Avoid vanity metrics that may look impressive but don't directly contribute to your business objectives.
Consider the entire customer journey. Track metrics throughout the entire customer journey, from initial awareness to conversion and beyond. This includes metrics related to brand awareness, lead generation, conversion rates, customer retention and satisfaction.
Utilize data analytics tools. Leverage data analytics tools like Google Analytics, CRM systems and marketing automation platforms to collect, analyze, and interpret data effectively. These tools can provide valuable insights into customer behavior, campaign performance and overall marketing ROI.
Regularly monitor and adjust. Continuously monitor your chosen metrics and KPIs to track progress and identify areas for optimization. Regularly review and adjust your marketing strategy based on data-driven insights to ensure alignment with your business objectives.
Stay flexible. Marketing strategies and goals may evolve over time, so be prepared to adapt your key metrics accordingly. Stay agile in your approach, experimenting with different metrics and strategies to find what works best for your business.
By following these steps and tailoring your metrics to align with your unique business needs and objectives, you can effectively measure the success of your marketing strategy and make informed decisions to drive growth and profitability.
If all of this business analytic information sounds confusing or challenging, you’re not alone. As a business owner or marketing manager, you have a lot on your plate. Knowing which marketing metrics and KPIs to monitor can be a challenging process.
A marketing agency can play a pivotal role in helping your business navigate the complexities of determining and implementing key metrics for your marketing strategy. A top digital marketing agency will:
Working with a marketing agency provides access to a strategic partnership and collaborative relationship. They serve as an extension of your team, working closely with you to understand your business goals, address challenges and achieve measurable results through a shared commitment to success.
Partnering with a marketing agency can also offer your business a wealth of expertise, resources, and support to optimize key metrics for your marketing strategy effectively. Whether you're looking to increase brand awareness, drive conversions or improve customer retention, a marketing firm can provide the strategic guidance and tactical execution needed to achieve your goals and drive sustainable growth.
Bill Walls : Nov 16, 2020 3:30:00 PM
If you are searching for ways to generate more leads for your business, it’s more than likely that you’ve come across the term “inbound marketing.”...
Bill Walls : Jun 30, 2021 3:41:37 PM
Marketing professionals know it’s more important now than ever to find a suite of tools that helps their businesses grow. Many are turning to inbound...
Bill Walls : Jan 20, 2021 4:00:00 PM
It’s never too early to start planning, especially since 2020 has been a year many are glad to leave behind.
Bill Walls
