There are many marketing sceptics out there. And we get it. All this talk of brand narratives and buyer personas can sound like a fad Madonna is currently promoting. But behind the fluff is a serious attempt to grow businesses by driving sales. Your boss might not care about the "art of marketing", but they will certainly care about the cold, hard numbers that reveal whether they will likely get a bonus or shown the door.
But with so many different types of metrics to track, it can be challenging to know which ones your boss actually cares about. Here are six key marketing metrics that provide real insight into your company's performance.
But first, what are marketing metrics?
Marketing metrics are an essential part of any business's success. They help measure how effective a company's marketing efforts are and can provide valuable insights into where improvements can be made. Marketing metrics show how effective campaigns and strategies are, helping companies to identify areas that need improvement or where to allocate further resources. Data-driven decisions allow for more informed strategies with tailored solutions.
1. Conversion rate
Conversion rate is an important marketing metric as it measures the effectiveness of your inbound marketing efforts in converting website visitors or leads into customers. It is a ratio that calculates the number of conversions (such as sales or signups) divided by the number of website visitors or leads—an objective measure of success that can be used to compare different campaigns, channels, and messages.
A high conversion rate means that you are turning many of your website or landing page's visitors into customers—a positive indication that your marketing efforts are working. Conversely, a low conversion rate can indicate an issue with your website or landing page—perhaps poor user experience or a lack of relevant content.
Understanding and tracking your conversion rates over time can reveal trends and help you make data-driven decisions about how to improve your marketing efforts—as well as where to spend money for maximum return on investment. Additionally, comparing conversion rates across different marketing channels can show which of these are the most effective.
2. Return on investment (ROI)
ROI is a crucial marketing metric that gives companies an insight into how effective their campaigns and strategies are.
ROI is calculated using the net profit generated by a marketing campaign or strategy divided by the cost of that campaign or strategy. It provides insight into which campaigns or strategies generate the most profit relative to their cost—allowing you to make marketing adjustments if necessary.
Calculating your ROI helps determine the value your marketing efforts provide, showing which activities are producing positive returns and which are not. This helps to ensure that resources are being allocated efficiently and effectively.
Tracking ROI also provides insights into which campaigns or strategies may need improvements, allowing you to focus your efforts on areas that promise the most success.
Moreover, ROI can be used to evaluate the performance of different marketing channels, such as email marketing, social media marketing, or search engine optimisation—so you can determine which channels are most effective at driving conversions and generating revenue.
This metric is crucial as it will show your boss how effectively your company is using your marketing budget—allowing you to make data-driven decisions. It will give you a clear understanding of what is working and what is not, which is vital for your long-term success.
3. Customer lifetime value (CLV)
CLV is essential as it quantifies the total value a customer is expected to generate for a company over their lifetime. This metric provides a long-term perspective on the value of your customers. It can help with many strategic decisions, including adjusting pricing strategies, assessing customer loyalty, predicting future revenue growth, identifying attractive markets for investment, and understanding how to best engage with customers.
The CLV metric will reveal your most valuable customers, who are the ones that should be targeted with personalised marketing campaigns. It can also show profitable customer segments; for example, if a specific customer segment has a high CLV, you may prioritise targeting new customers in that segment. And this will potentially have an impact on product development, pricing strategies, and sales efforts.
You can also assess the effectiveness of different marketing channels and campaigns by comparing the CLV of customers that came to you through different channels and campaigns. This evaluation will help shed light on the most useful methods to acquire high-value customers.
All in all, understanding CLV is essential for any business looking to maximise efficiency and profits. You can even use the metric to predict future revenue and make strategic decisions that will maximise the value of your customer base over time.
4. Customer Acquisition Cost (CAC)
CAC measures the amount of money spent to acquire a new customer. This helps businesses understand their costs related to gaining customers and adjust spending accordingly.
By tracking CAC, you can understand how much you are spending on marketing and sales efforts in relation to how many new customers you have. This information can be used to optimise marketing campaigns and allocate budget more effectively. Having an understanding of CAC can also help inform decisions on where best to invest resources and which strategies are most effective in acquiring new customers or retaining existing ones.
Ultimately, CAC enables businesses to make informed decisions regarding their marketing budget and ensure maximum ROI from different campaigns, marketing channels, and tactics, which helps companies make data-driven decisions about where to focus their efforts.
5. Engagement rate on social media platforms
Engagement includes interactions such as likes, shares, comments, and other forms of engagement on your social media posts. Engagement rate on social media platforms provides insight into the level of engagement customers and potential customers have with your content. It helps businesses understand the reach and effectiveness of their campaigns and strategies, as well as how successful they are in connecting with their target audience.
Knowing the engagement rate can help you understand how your audience responds to your content. And this is useful as it can inform your future content strategy, help identify which type of content resonates well with your audience, and identify which key thought or industry leaders it could be beneficial to work with.
Moreover, you can benchmark your engagement rate against other contract manufacturers, making comparisons with your competitors. The rate will provide insights into their level of brand awareness and how actively involved their audience is in their brand—particularly useful as many contract manufacturers ignore brand positioning. A high engagement rate is likely a sign of having a strong and loyal audience—useful for increased brand loyalty, word-of-mouth marketing, and long-term customer retention.
6. Website traffic
Measuring traffic to your website gives insights into how many people are visiting your website, which pages they are visiting, how they interact with the site, and the success of your digital campaigns and strategies. You even gain insight into your audience.
Knowing how many people are visiting your website can help you assess which marketing channels and campaigns successfully raise brand awareness, generate leads, and convert customers. This can help you know where to allocate your marketing budget and how to administer it more effectively.
Website traffic data will also show how individual pages perform. With this information, you can optimise the website design and user experience, hopefully leading to increased conversions and more sales.
Last, data on website traffic can provide indications on how well you are doing with SEO (search engine optimisation) and search visibility. High traffic numbers indicate you are visible, whereas low traffic indicates you might need to optimise your website content. Monitoring traffic over time will allow you to identify positive patterns or worrying drops in traffic, which could result from a technical problem or search engine algorithm change.
Marketing metrics are essential for any business to maximise efficiency and profits. By tracking these six key marketing metrics, companies can assess their marketing plan's success, adjust pricing and content strategies, identify attractive markets for investment, measure ROI, and pinpoint where best to allocate resources. Ultimately, understanding these six marketing metrics will help you stay ahead of the competition.