The key to automating business processes is using marketing metrics. Marketing metrics are numbers that reflect the current state of the company and the effectiveness of its activities. Their calculation is usually quite simple, sometimes even intuitive. However, the interpretation and ways of using these metrics may not be so obvious.
In this article, we’ll tell you which metrics to track, their benefits and challenges in practical application, and how to effectively combine metrics for your company.
What are Marketing Metrics
Marketing metrics are quantitative indicators that demonstrate the effectiveness of strategies, campaigns, or even specific business promotion tools. They engineer database are used to diagnose and analyze a company’s activities. These indicators allow you to quickly make the right management decisions and adapt to changing market situations, competition, and consumer sentiment.
From the definition of metrics in marketing, it is clear that they are used to optimize tactics and strategies for promoting a business. Having a clear set of quantitative indicators, you can experiment and identify the best ways to develop the company, while avoiding all the pitfalls and obstacles.
To determine the marketing metrics that will benefit you the most, consider the following factors:
- company business model;
- characteristics of the target audience;
- level of competition in the market;
- product life cycle;
- communication channels.
7 Marketing Metrics Worth Tracking
Each company should build its own analytical system using the best marketing metrics that perfectly describe its activities. However, there are also universal metrics that will be useful for any business. Let’s take a closer look at examples of marketing metrics.
This key performance indicator will show how successful your current marketing campaign is compared to previous ones. ROI is also often compared to industry standards and the closest competitors to assess the company’s position in the market.
For example, you spent $100,000 advertising a new car model. The campaign resulted in $1.5 million in sales, with a 20% margin. Your profitability would be:
2. Conversion Rate (CR)
This is a universal marketing metric. A sale, subscription, call, etc. can be considered a conversion. The higher this level, the more accurately you understand the needs of your target audience. CR will also be informative in comparison with previous periods, competitors’ indicators, or industry standards.
For example, your website attracted 50,000 visitors in the last month, and 3,500 of them signed up for your newsletter. The conversion rate is:
(CPA)
The list of marketing metrics should also include cost indicators. By comparing the average investment with the potential profit, you can understand the financial success of the campaign. If the overall result is negative, you need to change your approach to advertising.
For example, if you spent $2,000 on social media activity that brought 98 new users to your SaaS service, that means your CPA is:
4. Customer Lifetime Value (CLV)
This metric should also be included in your marketing metrics template to evaluate financial performance. You can use it to compare it to your customer acquisition cost. By analyzing the components of CLV and understanding how you can influence them, you can increase your business’s revenue and profits.
Continuing with the previous example, let’s add that the average subscription period for a SaaS service is 14 months, billed monthly, and the rate is $9.99. The lifetime value of a customer would be:
This figure is higher than the cost of acquisition, which is $20.41, so the marketing campaign can be considered successful.
5. Click-through rate (CTR)
This is another marketing metric that is easy to interpret. The higher the score, the more targeted your online advertising is and the more compelling your message. You can easily find benchmarks published in industry studies and available in public analytics systems such as Google Analytics. It is also important to compare CTR with conversion: if your ad is significantly more effective than your sales pitch, it is likely misleading.
For example, you launched a contextual ad that received 15 clicks out of 121 impressions. The key performance indicator is:
6. Retention and Churn Rates
This is another fairly simple but effective example of marketing metrics. A sharp increase in churn or a decrease in retention can signal problems in customer communications. It is important to compare these metrics to industry standards, as in some segments, consumers tend not to be very attached to brands.
For example, you had 35,000 subscribers to your tech review channel at the start of the period. Over the course of the month, you gained 5,000 subscribers and lost 3,500. This allows you to calculate the following metrics:
7. Widget Conversion Rate (CR)
In general, sites with widgets have a conversion rate 4 times higher than sites without them. But at Claspo , we know that achieving a high level is only possible with constant performance monitoring and A/B testing of widgets. That’s why our built-in analytics show the conversion rate of each widget, which is calculated using the following formula:
For example, if your widget was shown to 1,000 website visitors, and 100 of them completed the target action (made a purchase, signed up for a newsletter, etc.), your conversion rate would be:
Claspo allows you to track the conversion rate of widgets over different periods of time — from one day to the entire time they are displayed on your site. If you see that the conversion rate does not meet your expectations, it may be time for A/B testing. Only conduct it after careful analysis and hypotheses about why your widget shows a certain result. This may depend on its design, message, location, time of appearance, etc.
Our analytics will show you the key performance indicators of both A/B testing variations, help you understand whether your hypothesis was correct, and provide a solid foundation for optimizing your widgets’ conversion rate. With our simple builder, you can easily make any necessary changes to the design or display rules to achieve maximum results.
Benefits of Using Marketing Metrics
The main advantage is the ability to make management decisions based on data. Practice shows that in most cases, numbers evaluate the business environment better than the intuition of a manager or businessman. Quantitative metrics of marketing campaigns have other advantages, which we will consider in more detail.
Budget optimization
Using an intuitive approach, it is difficult to determine how much money to invest in advertising. If you invest too little, it will not reach the desired audience; if you invest too much, it will be annoying and ineffective. To solve this problem, you need an analytical system based on specific numbers. You will always know how much profit each dollar spent on advertising will brin vietnam data g you.
Accelerated growth
In the 21st century, most markets are already highly application of aida model in marketing competitive. Therefore, creating a profitable commercial offer for business development is not enough – you will still be in the shadow of large companies. However, key marketing metrics will help you determine which promotion methods are most effective, which segments of your target audience love your product, and which communication channels give the best results. If you can’t be the strongest player, implement the most effective marketing strategy.
