Importance of Marketing Performance Metrics
Marketing performance metrics are a crucial part of any company’s growth strategy, and here’s why you should follow them. Before we dive into the complex details of why marketing metrics are so important, let me introduce you to some of them that organizations employ most commonly.
What Are Marketing Metrics?
Companies map these measurable and objective values to discover how productive their marketing campaign is across a variety of channels. There are many marketing domains, across which a corporation needs to determine which is most effective. These are a few examples.
In email marketing, a business may be tracking down the click-through, open, and unsubscribe rates. On social media, you should see how many people are engaging with your company through ‘likes’ and ‘comments’. Moreover, you can check the number of social media users you manage to convert into customers.
Then there’s also your website, on which you’ll be seeing how many people are visiting (traffic) and making purchases on your store. This also involves checking where you land on SERPs and if your brand trends on search engines.
Why Are Marketing Metrics Important?
For starters, you need to understand that marketing is quite unpredictable and people’s responses to your brand are subjective. By using metrics, your business can have something objective to make marketing decisions by. Hence, you’ll know what works and what doesn’t. Every success and failure is a valuable insight, and metrics enable you to leverage them for an effective campaign.
There isn’t one sure way of knowing that your business is a success, there are multiple markers. But by tracking down metrics and Key Performance Indicators, you’ll learn whether your customers are promoting you or not.
Which Marketing Metric Do I Track?
There are numerous KPIs and metrics that you can track. You don’t need to track down all of them to gain greater insight. However, looking at a few metrics will give you a better overview and deeper perspective.
Marketing Originated Customers
This metric determines the number of customers attracted to your business as a direct result of your marketing campaign. Usually, they click on an advertisement on a webpage or social media site. The site leads them to your page, earning you a potential customer.
You then calculate how many sales directly come from to click-throughs on an advertisement. When you learn how many customers your brand is acquiring through advertisements, it becomes easier to know whether you should invest more or cut costs in marketing solutions.
Cost of Customer Acquisition
This figure is how much it costs to acquire a single customer. Once you sum up all of your marketing expenses for a specific campaign and divide it by the number of sales made by new customers, you learn how much you spent in marketing efforts while trying to gain one customer.
This number is never zero, but it’s always much higher than how much it costs to retain a customer. Sometimes, companies make the mistake of trying to acquire many new customers, while neglecting the ones they already have. By learning how much you’re spending on acquiring new customers, you’ll know whether you’re dividing efforts equally or if there’s a need for improvement.
Your business is losing customers at this rate, and while you can’t ever be sure if you’ve lost a customer, there are ways to find out if they no longer interact with you. You can learn how many customers you’re losing by the number of people who unfollow your pages, unlike your social media accounts, and unsubscribe from emails.
Divide the number of customers your business has lost in a period by your total number of customers, and multiply the fraction with 100. The resulting figure is the percentage of customers you’ve lost. There’s no fixed way as to how you should respond to this. But, the key here, is knowing whether the number of marketing originated customers is higher than the number of customers you’ve lost. Based on this, you’ll know if the brand should focus on customer acquisition or retention.
Of course, you can also see how popular your brand is across different marketing channels like social media platforms. The number of retweets, likes, and shares are an indicator of how popular your company is and if other people are talking about you with their friends and family. This suggests a brand awareness and gives people the chance to learn about your business.
While these metrics may look like the sole factors to rely upon for marketing statistics, there are various others. As your marketing team dives further into analytics and insights, you’ll come across multiple metrics that you can track to know whether your marketing efforts are effective.