Most Important Marketing Metrics Explained

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There are hundreds of thousands, if not millions of pages describing how you should run your marketing campaigns. There are also hundreds of thousands of videos describing exactly the same.

But when we look at the most important marketing metrics you should keep a track on, there aren’t that many articles. At least not that many good ones.

Some of them are trying to describe it from the perspective of the big corporations.

Which might actually have resources to track 70+ or 100+ marketing metrics. Don’t know about you, but I can’t afford it. I can’t afford it time-wise and money-wise.

Even if it would have been the only thing in my calendar I just wouldn’t be able to keep up! Not to even mention I cannot afford it to pay someone to do it for me.

I just believe it would be a terrible waste of time. I mean, why would you do it?

Wouldn’t it be so much better to just focus on 10 or 11 most important metrics? And you got my word it’s more than enough. Anything more than 15 is an overkill for a small business owner.

Besides, it’s completely unnecessary. Even for companies hiring few people. Heck, I’d even risk a statement that it’s probably more than enough for 95% of businesses and entrepreneurs.

Remember, the goal is to get the information. Not to just measure everything for the sake of measurement.

But I know it can be confusing to figure out what you should pay attention to. Especially when you are busy enough with regular day-to-day business.

So here’s my gift to you fellow hustler, treat the below list as your personal marketing cheat sheet.

7 Marketing Metrics You Should Track

Click-through rate (CTR) – essential measurement for every paid marketing and email marketing campaigns. It tells you how many people clicked the link in your ad or email, and indicates that you have been able catch the attention and ignite certain curiosity. In case of PPC high CTR will result in low Cost Per Click (CPC).

Cost per lead or conversion (CPL / CPCon) – for marketers lead is someone who is not a customer yet, but has the potential to become one. For salespeople on the other hand a lead is someone who has expressed great interest so has a potential to qualify as a prospect.

Generally speaking a lead can be also seen as conversion. That all depends what is your campaign objective. Cost per conversion would just represent how much you had to pay for single conversion.

Landing page conversion rates – it represents the percentage of people that have taken the desired action on your landing page. It can, but doesn’t have to be a purchase. Depending on the objective it can be email list subscription, app download or anything else you have prepared your landing page for.

It’s worth to mention that this page is a subject to optimizations. You can try different colors, headings, pictures, and so on. Just remember to test one thing at a time.

Sales revenue – I believe this one is pretty self-explanatory. It’s simply the amount of money your marketing campaign brought to your company. It might be very simple, but it’s very important at the same time.

This, however, doesn’t tell yet anything if the campaign was profitable or not. Of course it can be only additional indicator for non-money-generating campaigns. If you’ve made money on campaigns that were supposed to generate leads or awareness you already won.

Marketing ROI – nothing else than marketing return on investment, in simple mathematical equation it’s the (sales growth – marketing investment) / marketing investment. Seems complicated?

You can calculate ROAS (Revenue On Ad Spend) instead. It’s nothing else than revenue driven by ad divided by marketing costs. It gives you clear information how much money you’ve made on every dollar.

Cost per acquisition (CPA) – this is slightly different than just conversion, since conversion can mean anything. Cost per acquisition represents how much money you had to spend to gain a paying customer. This is probably the most important marketing metric of them all.

It has to be on reasonably low level to stay profitable. How low? You have to know what is your KPI (Key Performance Indicator) on this one. What is the maximum amount of money you are willing to spend to get someone to use his or her credit card?

Customer lifetime value (CLTV) – this metric is not directly associated with marketing efforts, but will help you to determine the budget that you can spend on one customer. This is essential especially for any business selling low ticket items. It’s hard to run a marketing campaign with $5 dollar budget.

But CLTV allow you to see wider picture. Starbucks may earn only few bucks on single cup, but their average customer lifetime value is $14,000 – let’s be honest, that’s pretty impressive. Such approach gives you quite a lot of edge to acquire new customers.

4 Additional Metrics That Will Help You Grow

Additionally there are also 4 more metrics that can be really helpful on your way to the top. They are more informative than the decision-makers, but it’s still worth to keep an eye on them from time to time.

  • Traffic-to-lead ratio – the amount of people that were qualified as leads compared to overall traffic to your website. Low ratio indicates problems with your website and / or landing page and / or sales funnel.
 
  • Lead-to-customer ratio – similarly to the above ratio it represents the amount of people that were converted to customers compared to the ones qualified as leads. Low ratio indicates issues with conversion process.
 
  • Organic traffic – amount of people visiting your website organically, so through going straight to your website or through search queries in Google.
 
  • Social media traffic – amount of people generated by your social media marketing efforts, other than paid ads. It became so popular that it’s worth to have a look on that separately.
 

That’s it, 11 most important marketing metrics explained. Of course you can and maybe even should add a bunch of other metrics that you will feel can be beneficial. Just don’t overload yourself. The business world doesn’t end on marketing.

More to explore

Most Important LinkedIn Metrics Explained

Most Important LinkedIn Metrics Explained

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