Marketing Metrics – They Will Make You or Break You
Your business’ lifeblood is its customers. In order to gain enough customers to keep your business growing, you need to attract people’s attention; this requires a solid marketing campaign. However, we regularly see marketers making the mistake of thinking that a “good” marketing campaign means flooding various channels with clever advertisements. In truth, though, good marketing begins when you look before you leap into any action. In other words, you need to use marketing metrics to guide your marketing campaign’s direction. Here is why how you use — or ignore — marketing metrics can make or break your business:
Why are Marketing Metrics so Important?
While marketing is an invaluable tool for customer acquisition, it is also an investment. Every dollar that you invest into marketing is an expense. If you invest unwisely, then you will waste many of your resources — or even lose ground with consumers. Without marketing metrics, every marketing effort that you made would effectively be a shot in the dark that could succeed or fail. For example, if you try engaging a group of people via Twitter, but they spend most of their social media time on LinkedIn, then you won’t see very strong results. In this case, you can use marketing metrics to identify which channels your target audience uses most often.
Metrics also help you continue doing what works and cut back on what hasn’t been so successful. For example, metrics will allow you to see what types of topics are most engaging on your blog.
What Marketing Metrics Matter the Most for my Campaign?
Cost Per Lead (CPL)
Although your marketing campaign will sometimes create sales directly, this is not its purpose. Marketing exists to create interest in your company so that you have an opportunity to close the sale. This is also known as lead generation. Optimizing your marketing investment means minimizing the average cost for each lead generated. The formula for CPL is simple:
Total Marketing Spend / Leads Generated = CPL
So if you spent $1,000 on marketing and generated 20 leads as a result, then your CPL would be $50. If your typical closed sale generates $100 in revenue in this case, then your CPL is resulting in a profit; if your typical closed sale only generates $40 in revenue, then your marketing campaign is actually costing you money.
Percentage of Customers that Started as Marketing Leads
This shows how often your new customers start out as marketing leads. To figure this out, simply divide the total number of new customers acquired in a given time span by the number of customer generated via marketing. This is important because marketing should play an important part of your business’ growth.
Customer Lifetime Value (LTV)
You don’t want a customer to stop by once. You want them to invest in all of the accessories they need; when their product is used up, you want them to come back to your company for more. How much a person spends over a period of time defines their LTV. In addition to generating new leads, your marketing campaign should be nurturing current customers as leads. If your lead nurturing endeavors are successful, then your average LTV should be high. If it isn’t, then you know that you need to make adjustments in your lead nurturing endeavors (there are metrics that will guide you here as well).
Don’t Approach Marketing with a Blindfold on
You cannot achieve marketing success without knowing what road your campaign is headed down. With the right metrics, you will have all of the information you need to keep your campaign on track and show your marketing return on investment.
Robin Emiliani has been helping companies generate quality leads for almost 20 years. She enjoys teaching companies how to achieve results by utilizing technology. When she’s not marketing, she’s playing with her 3 spirited boys – usually on a court, on a field or on a mountain.