When it comes to marketing, it can be challenging to know which strategies are working best. Are the social media posts you’re creating effective? Do your email blasts have a high open rate or a low one? What type of content drives more traffic to your website? Unfortunately, many marketers still operate without a clear understanding of how their various marketing efforts are affecting their business. A lot of marketers focus on smaller details like what copy works best for ads or whether they should use an image of a cat or dog. The challenge is that these smaller details don’t help marketers understand the big picture. Are we reaching the right audience with our marketing efforts? Is there a better way we could spend our marketing budget? These questions and more can be answered with the five essential marketing metrics we’ll dive into in this blog post.
ROI (Return on Investment)
The first metric to measure is ROI (return on investment). This metric is one of the most straightforward metrics you’ll find. It helps you determine how much your investment in marketing is yielding profit. The amount of profit can be determined in a few different ways, including customer lifetime value, sales per customer, or profit margin. Let’s say you’re creating a campaign that costs $10,000. You want to know how much the campaign will make and how much profit it will bring in. When it comes to marketing, there are two main categories to track ROI: advertising ROI and lead generation ROI. We’ll break down each below.
Conversion rate is a metric that measures how many visitors turn into leads or sales. The conversion rate calculates the percentage of visitors who take a desired action, such as making a purchase or filling out a lead form. For example, say you’re an e-commerce business. You want to track the conversion rate of your website. You create an ad that gets 1,000 clicks. From those 1,000 clicks, 100 people end up on your website, but only 10 of those people purchase your product. The conversion rate for this ad would be 10%. This means that for every 1,000 people who visit your site, 10 purchase your product. Keep in mind that conversion rate is different from click-through rate (CTR). While a CTR indicates the number of clicks you receive compared to the number of times your ad is shown, a conversion rate indicates the number of visitors who complete the desired action compared to the number of people who see your ad.
Visitor to Lead or Sales-force Qualification
If you’re trying to make your sales process more efficient, you should track the number of people who visit your site and decide to leave without taking any action. This metric will help you understand how many people are dropping out of your sales process. For example, let’s say you’re running a lead generation campaign. During the campaign, you have an offer that’s set to expire in seven days. You want to track how many people are viewing the offer and deciding not to take action. The number of people who leave without taking action is your visitor-to-lead ratio. Visitor-to-lead ratio is helpful when you want to understand why some people are dropping out of your sales process. It will help you determine whether your offer is too difficult to understand, or if there is a flaw in your sales process (such as your contact form). Visitor-to-lead ratio can also be used to track the sales-force qualification metric. The sales-force qualification metric is the number of people who visit your site and complete a lead form but are not ready to buy.
Similar to the sales-force qualification metric, cohort analysis measures the number of people who visit your website and complete a lead or sales form. The difference between the two is that cohort analysis groups people based on when they visit your website. Cohort analysis is helpful when you want to understand how your marketing efforts affect your core metrics in the long term. It allows you to compare your marketing efforts over time to see what is working and what isn’t. Let’s say you’re running a lead generation campaign. During the campaign, you have a lead form that asks people to select their industry. You have four options: manufacturing, construction, retail, and healthcare. If you have the same lead form but add a drop-down menu for the people to select their industry, you can track the number of people who select each industry over time. You would then compare the data from the same period of time in the previous month to see if a certain industry has more people selecting it. This would indicate that your lead form is prompting people in that particular industry to select it.
Social Media ROI
Lastly, let’s talk about social media ROI. Social media is a great way to build connections with potential customers, but it can be tricky to track your return on investment. Luckily, there are a few key metrics you can measure to determine how your social media efforts are affecting your business. The first metric you can use is engagement. Engagement includes likes, comments, shares, and retweets. The more engagement your posts receive, the more likely people are to see your posts. If your posts get a high amount of engagement, they are more likely to be seen by a larger audience. The number of followers and the number of new followers are also good metrics to track. If the numbers are increasing, this indicates that your social media efforts are working. Not all social media platforms measure engagement and followers the same way, so make sure you know how to track those metrics on each platform you are using.
At the end of the day, it’s important to remember that marketing metrics shouldn’t be treated like a science. Every business is different, and metrics will vary from one business to the next. What works for one business may not work for another. That being said, it’s important to track these metrics to understand how your business is doing and where you can improve. If you’re not tracking your marketing metrics, it can be difficult to understand how your marketing efforts are affecting your business.