Every week, we answer a common question about marketing or business. This week, our question comes from a fan who entered our giveaway contest for a Fire 7 Tablet. Today, we will answer the following question: “which marketing metrics are most useful?”
What are marketing metrics and why do they matter?
Marketing metrics are data used to track the success and efficiency of marketing initiatives. Metrics can be anything from sale figures to the number of clicks on an advertisement. Other metrics include pageviews, email sign-ups, and nearly anything else you would want to track. Understanding marketing metrics can help you see your business in an objective way, giving you the information you need to make good decisions.
Marketing metrics are the hard facts and figures needed to measure your marketing performance. These metrics are essential to your business, because without them, you don’t have an objective standard to measure your business against. Objective data lets you see which channels and which content are providing value to your audience and it can help you find areas to improve.
Let’s say you want to increase your web traffic. To see if you are getting more views, you must be able to track both past and present data. Using different metrics such as pageviews or number of unique users per page lets you know whether or not your content is reaching your audience. You can then make more of what works and less of what doesn’t.
But remember: the goals are more important than the metrics! Metrics just happen to be great for helping you achieve your goals.
Having a clear image of what you’re looking to track is critical for success. In our tech-savvy society, it is easy to get caught up in just how much you can track. But data is useless without context. Understanding your business’s short-term and long-term goals will help you to see what metrics are most useful to track.
Using AIDA to Choose Meaningful Goals
But how do you know which marketing metrics are useful? There are so many!
We’ve made it clear that to understand your data, you have to understand your goals. Yet this is where people get stuck. It’s sometimes difficult to see which goals matter when it comes to getting people to care about your business enough to buy from it. For that reason, let’s revisit AIDA.
AIDA stands for Attention, Interest, Desire, and Action. This model shows the different steps in the purchase process that a customer takes.
- Attention is when the customer becomes aware of what you are offering, whether that be a product, service, or content.
- Interest is when the customer begins to gain interest in what you have to offer.
- Desire is where the customer starts to want your product.
- Action is where the customer purchases your item.
How AIDA Can Help You Pick Metrics
Working through the steps in AIDA, you can select metrics that are applicable to each step. For example, getting people to pay attention is often one of the most challenging aspects of marketing. Thankfully, through tools like Google Analytics, you can track everything from who your ads are reaching, to how many people are viewing your page.
What are good metrics for measuring attention? You can look at the overall reach of your advertisements (impressions) or the number of users on your website. All you need to measure for is people seeing your company’s name. Whether or not they care is a different story.
So how do you gauge interest? You can use social media to track number of followers. Alternatively, you can use email sign-ups as a proxy for interest.
Desire is more complicated, but web, email, and social media analytics provide ways to measure that too. You can measure likes, retweets, Facebook reactions, and more to see if people are truly interacting with your brand. You can monitor Google Analytics to see who has visited the shopping section of your website. You can monitor your emails to see what percentage of your mailing list opens every single email.
It doesn’t stop there. Tracking desire can be anything from looking at your ad clicks and landing page views. Seeing which ads have the highest click-through rates can let you see which ads are best at stoking desire.
Finally, measuring action is relatively straightforward. When someone does what you want them to do, that’s a conversion. A sale is a conversion, as is a request for a quote. So action metrics are often as simple as tallying up conversions!
Our Favorite Marketing Metrics
There are no marketing metrics that work for every business. There, are, however, some that we pay a lot of attention to ourselves.
Our favorite two metrics are lifetime value (LTV) and customer acquisition cost (CAC). LTV is a measure of how much revenue each customer brings over the entire lifetime of their account. CAC is a measure of how much it costs to earn a new customer. Ideally, you want LTV to be multiple times greater than CAC.
Getting straightforward measures for LTV and CAC is not easy, though. If you’re just getting started with marketing metrics, don’t get hung up on choosing the fanciest ones. Start with the basics.
Here is what we recommend if you’re just starting to pay attention to marketing metrics:
- Financial: Revenue, Expenses, and Profit
- Conversions: Number of Sales, Number of Quote Requests
- Web Metrics: Number of Unique Users, Bounce Rate, Time on Site, Top 3 Traffic Sources
- Email Metrics: Number of Subscribers, Open Rate, Click Rate
- Social Media: Number of Followers, Engagement Rate
Picking the right marketing metrics for your small business may seem intimidating. With a careful focus on the goals that matter to you most, though, metrics will clarify rather than confuse. That way, you can answer the age-old question of “do people really care about what I’m saying?”