While creative copy and an attractive design can draw attention, and perhaps appreciation, it is data that helps you turn this attention into measurable value, say a purchase or signup.
With businesses and customers going digital, there’s an abundance of data available to marketers from various sources. Defining and measuring the right marketing metrics make it possible to drill down to what data says about your marketing efforts’ effectiveness.
Marketing metrics are values marketers can monitor to measure the performance of their campaigns. These values can tell how effectively your marketing efforts are leading audiences to take actions that generate value. But blindly measuring any metric can present a partial or skewed picture of how things really are.
Marketing metrics tell marketers what data to collect and analyse. The marketing metrics you measure should differ based on the channels, goals, and formats of your campaigns. This will reveal finer nuances of the engagement and revenues generated from each campaign over time.
Marketers are trying innovative ways to engage rapidly evolving digital-first audiences. This also drives them to adopt a wider range of metrics to measure their marketing efforts’ success. Salesforce’s 7th State of Marketing report says 78% of marketing organisations have reprioritised or changed their marketing metrics in the last year or so. But the marketing function's underlying goals will always be the same – spread awareness, gain new customers, continue to engage the existing ones.
Metrics like revenue, funnel performance, and customer satisfaction are still the most popular. But KPI-conscious metrics like customer referrals, acquisition costs, engagement with content, etc., are increasingly tracked as well.
Since marketing is more strategic now, its metrics must be in line with overall company goals. 70% of CMOs today align their KPIs and metrics with their CEO's. There are various intelligent marketing tools today that are helping marketers become more efficient and targeted in their approach.
As more consumers go online and follow intricate journeys, it becomes harder for marketers to know how they can positively impact their experiences at every touchpoint.
Measuring the right marketing metrics helps marketers know how consumers react to their campaigns and communications. Based on these insights, marketers can amplify the efforts that reap the most benefits, and adjust the ones that are not producing the desired results.
Metrics also help marketers prove the value their efforts add to the organisation. This helps them get bigger budgets and better resources to create a greater impact.
The significance of specific metrics and their benchmarks differ from industry to industry. But there are a few marketing metrics that marketers across industries keep a close eye on at different stages of their customers’ journeys.
Some marketing metrics you can measure at different stages of the marketing funnel and on different channels include:
Here are some common marketing metrics you need to know about:
1. Impression share: Marketers can use this metric to determine how much visibility their brand is getting on a particular channel compared to the larger potential audience it can engage. An increase in impressions can lead to higher sales.
2. Click-through rate (CTR): CTR is the number of times an ad or link is clicked on as a percentage of the impressions. Since ads are “push” campaigns, their CTR is generally low. About 4% or higher CTRs generally indicate that your messaging is relevant and compelling. But to ensure audiences’ journeys progress from here on, it is important to provide experiences that align with the expectations you set. There are many marketing tools that can help you monitor CTRs, some even in real-time so you can optimise campaigns on the go.
3. Lead generation metrics: AI-powered solutions like Marketing Cloud can help marketers track leads generated from multiple marketing channels in a single, unified dashboard. These leads get prioritised automatically based on the likelihood of their conversion. Popular lead generation metrics include Visitor-to-Lead and Lead-to-Opportunity that measure the conversion of page visitors into ‘warm leads’ and ‘warm leads’ into ‘hot leads’ respectively.
4. Marketing qualified lead (MQL) to sales qualified lead (SQL) ratio: MQLs are those that have shown the intent to buy, and SQLs are prospects that sales teams consider ready for direct contact. Your assets and ads may get several signups or clicks but not all these leads would have a purchase intent.
Before you send your leads to the sales team, follow these steps to ensure they are ready to buy:
A good MQL to SQL ratio shows that your sales and marketing teams are well-aligned. It reflects a healthy pipeline and how effectively your marketing teams can qualify leads.
5. Cost per lead (CPL): CPL is the amount you spend on gaining a new lead from a campaign or channel. This metric can help you measure the ROI of your campaigns and allocate budgets where you see better results. Ensure that the amount you spend on measures like paid ads and monitoring social media is as low as possible while maintaining high acquisition rates.
6. Lead-to-customer conversion rate: While gathering leads is important for your marketing and sales teams, measuring the number of leads that actually convert into paying customers is also important. This can help you determine whether your sales team needs a greater number of leads, leads of higher quality, or the right content to help them close deals faster.
7. Cost per acquisition (CPA): CPA is the amount you spend to get a new customer. If the CPA is less than the revenue the customer brings in over a period, then your marketing efforts are on the right track. You can calculate the overall CPA of all your marketing efforts or for individual channels to inform budget allocations.
8. Customer lifetime value (CLV): CLV is the amount a customer is expected to spend on your company during the time they are with you. It can include license renewals, product plan upgrades (upsell), and buying your other products (cross-sell) depending on your offerings and pricing model. You can predict CLVs based on similar customer profiles and journeys seen in the past.
CLV is important for proving how often quality is better than quantity in marketing. To maximise revenue, some of your campaigns should always be aimed at better engaging existing customers.
9. Return on investment (ROI): Marketing ROI can be calculated by dividing CLV by CPA. If your CPA is high but CLV is low, you need to tweak your campaign strategy to increase the revenue generated from it.
10. Action completion: Check if your audiences are taking the actions you are leading them towards. It could be actions like entering contact details, subscribing to newsletters, or clicking on a CTA. Action completion for different channels will be measured basis different actions. So, if the action is subscribing to a newsletter, you would measure how many people are subscribing.
11. Multiple touchpoint attribution: Not many people complete a purchase the first time they go browse online. Usually, buyers prefer checking their options and coming back to make the final purchase. To better understand the impact of your marketing efforts at different touchpoints in your customer journey, you can use tools like the W-shaped attribution model. This model attribute 30% credit to first clicks, 30% to clicks that convert leads, 30% to clicks that create opportunities, and 10% to other interactions.
12. Company-focused metrics: Lastly and importantly, knowing how marketers contribute to the company's business growth and profits is crucial. Company-focused marketing metrics help measure and assess how much of the company's new or repeat customers, business opportunities, revenue, and profits - can be attributed to the marketing initiatives. Examples of such company metrics include Marketing Originated Customer Percentage, Customer Acquisition Cost recovery time, Return on Marketing Investment (ROMI), etc.
There are also metrics specific to measuring the performance of campaigns on different channels or platforms:
Website conversion rate: It is not enough to only measure the number of people who visit your website. To make the most of your marketing efforts, measure where these visitors are coming from and how many complete intended actions – like making purchases, subscribing to a service, requesting a meeting, etc.
Once you have identified the actions you want to measure, set up custom landing pages that only converted audiences will be taken to. Ensure there is no other way to arrive at these pages, so your calculations stay accurate.
Emails continue to be one of the best ways to reach and engage your audiences. Measure the performance of your email marketing campaigns with metrics like:
Social media is a great platform for building customer engagement and deeper relationships. But having thousands of followers is no use if they don’t engage with your brand’s content. Indicators like shares/re-shares, likes, comments, pins, etc. are a great way to determine audience engagement rates and sentiment. Social media engagement is one of the most accurate indicators of brand awareness, the other two being brand mentions and branded search.
Let’s look at these metrics in a bit of detail.
Then, there are metrics that are used to measure success post-sales.
To raise your CLV, it is important to dedicate some marketing campaigns towards engaging existing customers. Here are three marketing metrics you can measure to ensure your customers stay connected, loyal, and happy:
Once you are familiar with common marketing metrics, it is time to determine which ones your marketers can start measuring.
The marketing metrics you choose to measure should be relevant to your business, industry, preferred channels, and campaign types. To determine the right marketing metrics to measure your campaign success, follow these two simple steps:
1. Identify your goals: Know what you want to achieve through marketing – whether it is finding more leads, raising CLV, or anything else. Marketing metrics should be directly related to the results you seek.
2. Stay focused: It is natural to want to know all the ways your marketing efforts affect your business. But when you want to see specific outcomes, stick to the metrics that help you measure marketing performance on those lines.
Remember, a lot of your marketer’s time and effort can go into measuring and monitoring marketing metrics. It is best to focus on the essentials, instead of spending time on activities that may not be useful for you at a given point.