With all of the advances that have occured in the Digital Age, there is hardly any branch of human activity which hasn’t benefited from it. The same...
The Five Marketing Metrics You Must Know Even if You’re Not in Marketing
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Marketing is full of buzz words and metrics that often don’t make sense to anyone outside of the industry. Even inside the marketing world it can seem like some of the jargon is made up at times. That being said, we want to highlight the five metrics that every business owner, sales leader, or head of marketing must track closely to maintain a healthy business:
Visitor to Lead Ratio
This metric incorporates two separate metrics that every company must be measuring: website traffic and leads. This ratio is simply the overall (can be weekly, monthly, or annually) amount of visitors on your website divided by the number of leads generated from your site.
Why this is important: Getting people to come to your website is important, but what’s even more important is having them convert. A site with high traffic but no results is almost as bad as no website at all. The goal of your website may differ by industry, but ultimately you want them to take some action. This could be downloading an eBook, scheduling a consultation, or signing up for a trial. Every business owner must watch this very carefully to understand if their website is performing or not.
Click-Thru Ratio on Emails
Click-thru-ratio represents the percentage of people that took action (clicked) on an email that you sent them. This can be calculated by dividing the amount of clicks by the total number of opened emails. An opened email is determined by if the email made it into an individual’s inbox and they opened the email, letting all content and images load.
Why this important: As with your website, the goal of emailing someone is to communicate a message and generally to get them to do something. Low click-thru ratios are a sign that your emails aren’t resonating with the individuals you’re trying to reach. If this occurs, it can lead to either them unsubscribing (worst case scenario), or mentally associating your company with white noise. As with all marketing, focus on the quality of your message as opposed to the quantity.
Social Media Engagement
Social media engagement varies from platform to platform. On Facebook, it can be a like or share. On Twitter, it could be a favorite or re-tweet. The bottom line is this metric measures the number of individuals actually engaging with your brand. This can be calculated by adding up the amount of people who engaged with your brand across all platforms.
Why this is important: Social media can be an incredibly effective tool for your company if used correctly. Where companies get into trouble is they start posting junk just because they feel like their need to post something. It’s crucial for your social content to speak to your target customers. Little social engagement means that you either aren’t engaging, or the material you’re posting simply isn’t resonating with them.
Lead Acquisition Cost
Lead acquisition cost is the overall cost it takes to acquire one lead. This can be calculated by the overall cost of a campaign (labor and investment) divided by the number of leads obtained from this campaign. This should be viewed at a campaign level and an all up level for the company.
Often, leads are measured by the cost per lead by channel. However, a solid inbound marketing strategy is about an integrated strategy and not a one-off tactic. It is important to understand what channel conversions actually occur, but we recommend that the cost per lead is measured on an overall basis as opposed to by channel.
Why this is important: If a company is looking to grow, they need leads and prospects. A business must understand what the cost is, both from an investment and time standpoint, to acquire new leads. For a company that sells a $50,000 product, a lead cost of $2,000 might be okay. But if you’re selling a $100 product and a lead cost you $60 or $70, then you have a bit of a problem on your hand.
Customer Acquisition Cost
Customer acquisition cost can be defined as the cost it takes you to acquire a new customer. This can be calculated by the overall investment (including sales & commission) divided by the number of new customers acquired. As with lead acquisition cost, this should be looked at on a campaign and overall level.
Why this is important: This is a no-brainer… If you want to grow, what are going to need to invest in order to reach your goals? Marketing is certainly not a science, but data can help businesses make very informed decisions about where to spend their marketing dollars. By monitoring this metric closely, it also gives you line-of-site as to how effective your marketing is. If it costs more to acquire a new customer than their lifetime value, then you obviously have a big problem on your hand. More companies end up in this situation then you would imagine, which is why it’s crucial to monitor this on an ongoing basis.