Marketing is often more an art than a science, but without metrics, you can’t tell whether your efforts are bearing fruit.
Unfortunately, the number one challenge marketers face is not being able to attribute revenue to a specific campaign, especially in today’s world of multiple marketing channels and complicated digital marketing campaigns.
This requires analysis of all of your marketing efforts to work out what marketing metrics matter to your business. So, let’s go through some of the things which really matter to marketers.
Here are the key marketing metrics that matter the most to marketers seeking to demonstrate ROI and properly manage their campaigns.
Conversion rate is a vital metric for your website. It’s the percentage of visitors to a website or ad that then go on to complete the desired action.
This is not always making a purchase. For some campaigns, it might be signing up for a mailing list, downloading an ebook, or asking for a quote.
Conversion rate is often seen as a measure of how well your website encourages people to buy, but it can also be seen as a measure of how well your ads are targeted. If the wrong people are coming to your website, then your conversion rate is going to be low.
For brand awareness campaigns, a low conversion rate may not be an issue — at least not initially.
This one is often a better measure of the quality of your website. The bounce rate is the number of people who leave your website quickly.
A high bounce rate is often raised by issues with your website, and the most common reasons include:
- The page is loading too slowly.
- The title or description is misleading.
- Technical errors. A sudden increase in bounce rate is a reason to check and make sure your landing page is working.
- A misleading link from another website. Unfortunately, if somebody links to your site incorrectly, by accident or even on purpose, this can increase your bounce rate.
- Poor quality or uninteresting content.
- An ugly or “eye bleeder” website that is driving people away.
- Excessive ads, popups, subscribe buttons, etc.
However, the bounce rate may also be high because you actually have things set up so people don’t have to spend a lot of time there.
For example, a high bounce rate is good for affiliate referrals, where you want the person to go straight to another site.
It can also be a good sign if you are directing people to a simple landing page for, say, newsletter signup. In this case, you should look at the conversion rate.
A high bounce rate is therefore not necessarily an issue, but a sudden increase in bounce rate can be an indication of problems with your site.
Oh, and let’s not forget the other bounce rate you want to keep low — the number of emails that bounce when you send out your newsletter. Make sure to regularly purge addresses that are resulting in a permanent failure.
Open rate is a vital KPI for email marketing. It’s the number of people who receive your email who actually open it.
If your open rate is low, then you may have one of these issues:
- Boring or uninteresting subject lines: Subject lines are an artform and you need to make sure that they are interesting and instill a sense of urgency. Also, make sure not to use overly generic subject lines, which can be mistaken for spam.
- Too many people on your mailing list: A lot of people who sign up for mailing lists aren’t that interested but can’t actually be bothered to unsubscribe. This results in a low-quality list population.
- Poor timing: You need to do research for your specific audience, but there really are days and times when people are more likely to bother looking at your email.
- Emails are being caught in spam filters: In addition to generic subject lines, avoid certain words. There are a lot of words to avoid, but likely issues are “buy” and “money.”
If you say it isn’t spam? People will assume it’s spam. When a telemarketer calls and says “This isn’t a sales call,” how do you react? Right. We can hear everyone tapping their “end call” buttons from here.
The best way to keep your open rate high is to send interesting, well-timed emails with well-written subject lines and to curate your list frequently.
How many people unsubscribe each time you send out an email? As previously mentioned, unsubscribes aren’t necessarily a bad thing.
You don’t want uninterested people to stay on your mailing list, dragging down your open rate and increasing the risk of your emails being marked as spam.
However, a sudden flurry of unsubscribes in a given time period can indicate that something is going on. If this happens, you need to carefully study the last email you sent to see if anything in it was scaring off your customers.
This is a very simple, but important metric. It’s just how many people are viewing each page on your website.
However, deeper analysis of page views can tell you more than just how many potential customers are looking at your site. It can tell you which pages are attracting attention.
Now, using this information combined with bounce rate, you can find out which of your blog posts or white papers are actually being read.
Google Analytics is a good basic tool for page views, but most marketers are going to want to go beyond it at some point. Welcome can help you track these and all of your other website and performance metrics easily.
Want to increase your page views? You can do so through SEO optimization and by providing interesting and useful content people are going to want to read.
Page views are one way of measuring website traffic, which can tell you how your different campaigns are doing. Measuring views on a marketing campaign-specific landing page is vital to teasing out whether your ads are working and establishing which of your campaigns is most effective.
Unique Website Visitors
The other way to measure your website traffic is by tracking unique visitors.
Tracking website visitors tells you how many people you are reaching. Keep in mind that this metric may count people twice if they, for example, check your website on their phone while out and about and then again on a laptop or desktop computer.
However, it can give you a good idea of how wide a net you are spreading and help you track those juicy conversion rates. It can also tell you something about how your search engine optimization tactics are working.
This is the percentage of people who see your ad who are actually clicking on it. A low CTR can indicate any of the following:
- You are not targeting your ad to the right people.
- Your ad is boring or uninteresting.
- Your ad is annoying or obtrusive. Annoying ads don’t turn people away from clicking on them, they’re why people use adblockers.
- Your ad has a poor position on the page due to not bidding enough. Balancing bids on pay-per-click ads is a challenge.
- Your ad is showing up at the wrong time. As with email newsletters, there are days and times when people are more likely to click. Also, if your ad is primarily showing up when people are at work then it’s less likely to get clicks.
A poor click-through rate generally means you need to look at how you have your campaign set up.
Be sure to research what a good CTR is in your industry before worrying. It can be highly variable, and you need to know what the benchmarks are for the specific product or service you are trying to sell.
Cost Per Lead
How much does it cost your sales team to get a good lead? You want to keep your CPL as low as possible, although with the understanding that it can vary by industry.
And, of course, if you are selling high ticket items your ideal CPL is going to be higher. However, an excessive cost per lead indicates that you are, somewhere, wasting your time and money.
The quick and dirty way to calculate this is to take the total cost of the campaign and divide it by the number of qualified leads you obtained. Don’t forget to include the time you spent as well as direct costs such as advertising spending.
Cost per lead should be compared to other metrics to establish whether it’s reasonable.
Also, make sure that you work with sales to coordinate your lead generation activities and make sure that new leads are properly attributed. Sometimes a lead might be obtained from multiple sources, which can complicate things a little.
Customer Acquisition Cost
The next step after cost per lead is customer acquisition cost. This is the amount each new paying customer actually costs you to obtain.
So, instead of dividing by qualified leads, you divide by people who actually made a purchase. Like cost per lead, you want to keep this as low as possible without underbudgeting.
CAC is a major measure of your return on marketing investment. However, like cost per lead, it also needs to be combined with another measure, which brings us to:
Lifetime Value of a Customer
So, you know how much it costs to get a new customer. How much does that customer bring you? The lifetime value of a customer is a measure of how much your customers typically spend.
This means that it helps measure the ROI on your marketing campaigns, but also the key factor of customer retention. Never forget that it costs less to keep an existing customer than to find a new one.
Depending on what you are selling, lifetime value can be variable.
If you are selling cars, then even if your customer never comes back you are seeing a lifetime value typically into five figures. If you are selling books, then the lifetime value is going to be a lot lower.
(Yes, this means that the lower the price of the thing you’re selling, the more important customer retention actually is, especially as you need a higher number of customers to make a profit).
The harder to measure part of lifetime value is customer referrals. These can be hard to track, but encouraging customer referrals is a great way to keep your marketing budget low.
Welcome can help you track all of these metrics and establish the ROI of your marketing efforts.
So, there you have it. Some metrics marketers really care about and some ways to track your ROI and help convince stakeholders that the money you are asking for advertising is worth spending.
Tracking all of these metrics can be a pain, but Welcome can help you with this. If you are ready to take your marketing performance to the next level, get a free account today.