- ROI (Return on Investment). ROI is the most common formula and probably the easiest to understand. …
- CPA (Cost Per Action). …
- ROAS (Return On Advertising Spend). …
- CLV (Customer Lifetime Value). …
- Customer Retention Rate. …
- 3 Ways to Avoid Creepy Marketing Practices and Build Trust With Your Customers.
Measurement is what makes marketing a science, rather than a superstition. For many business owners, marketing is a superfluous expense—something to spend money on only when the budget is flexible enough to accommodate it. This is because the return on investment on marketing is, in many cases, unpredictable. Your ad could be a resounding hit, flooding you with thousands of new interested customers, or it could be a seeming dud, wasting your time and money.
Solid metrics give you the insight to overcome this hurdle of unpredictability. If you’re just starting out or you need to overhaul your existing marketing strategy, make sure to familiarize yourself with these 10 marketing metrics:
1. Total Visits. Your main website should be a primary target for your customers and potential customers, but you can also measure total visits to any location relevant to your strategy, such as a landing page for a pay-per-click campaign. Measuring your total number of visits will give you a “big picture” idea of how well your campaign is driving traffic. If you notice your numbers drop from one month to the next, you’ll know to investigate one of your marketing channels to figure out why. In a healthy, steady campaign, you should expect your total number of visits to grow steadily.
2. New Sessions. A metric found in Google Analytics, the total number of new sessions will tell you how many of your site visitors are new and how many are recurring. It’s a good metric to understand because it tells you whether your site is sticky enough to encourage repeat customers as well as how effective your outreach efforts are. For example, if you change the structure or content of your site significantly and your ratio of recurring visitors to new visitors drops, it could be an indication that your website is losing effectiveness in warranting multiple visits.
- “direct,” which will tell you how many people visited your site directly;
- “referrals,” which include external links from other sites;
4 “social,” which includes visitors who found you through social media. It’s an excellent way to gauge the strengths of your SEO, social media marketing, content marketing, and traditional marketing campaigns.
4. Bounce Rate. The bounce rate shows you what percentage of visitors leave your website before further exploring your website. For example, if a potential visitor finds your homepage after searching for you and leaves the page before clicking any other links, they will be considered to have “bounced.” Generally, you want the bounce rate to be as low as possible because the more time someone spends on your site, the more likely they are to convert and perform meaningful action. However, a high bounce rate isn’t necessarily a bad thing, as I outlined in my article, “Bounce Rate: 6 Questions All SEOs Need to Be Able to Answer.”
5. Total Conversions. Total conversions is one of the most important metrics for measuring the profitability of your overall marketing efforts. While it’s possible to define a conversion in many ways (such as filling out a lead form, completing a checkout on an e-commerce site, etc.), conversions are always seen as a quantifiable victory in the eyes of a marketer. You can measure conversions on your site directly, depending on how it’s built, or you can set up a goal in Google Analytics to track your progress. Low conversion numbers could be the result of bad design, poor offerings, or otherwise disinterested visitors.
6. Lead to Close Ratio. This is less a measure of your marketing efforts and more a measure of your sales success, but it’s important to understand in the context of your total return on investment. Without an efficient and successful sales follow-up, any leads you get from marketing could be useless. This metric is easy to define: simply divide your total number of sales by your total number of leads, and you’ll get a ratio that defines your sales success independent of your marketing efforts. If your close rate is low, any drop in revenue or overspending could merely be a symptom of inefficient final sales strategies.
7. Customer Retention Rate. Customer retention can be difficult to measure if your buy cycle is long or if your business revolves around typically one-time-only sales. However, subscription-based services, e-commerce platforms, and most conventional businesses can measure customer retention by calculating what percentage of customers return to your business to buy again. A low customer retention metric can be a symptom of a product or service that isn’t sticky, or an indication of lacking outreach programs. Customer retention is also an important factor for calculating the average value of a customer.