4 Valuable Marketing Metrics to Track and Measure Your Business Performance
June 23, 2021
June 23, 2021
If you're a marketer, especially in the digital marketing space, then you know that it can be incredibly difficult to track your marketing efforts and measure how successful they are. You can't just rely on one tool, like Google Analytics, to measure your conversion rates, or social media analytics for measuring customer sentiment, and expect to get the full picture of your performance. That is why any business with a digital marketing strategy should be closely monitoring the following 4 metrics. Let’s hop right in!
The customer lifetime value (or LTV) is the total amount of money that a client spends with the business during their lifetime. The LTV can be calculated by taking all revenue generated from an individual client and subtracting any costs associated with providing them the product or service required. When creating and implementing a marketing strategy, it's important to remember which potential clients to focus on specifically. The industry rule of thumb is that a marketer should spend 80% of their time on the 20% most valuable leads, as they will generally be generating at least half the revenue for a freelancer or agency.
Besides knowing who to focus on, it can also be valuable to try and increase a customer's LTV, through strategies such as upselling or cross-selling. The higher you are able to get this number, the more picky you can be when choosing your clients.
Customer Acquisition Cost (or CAC), measures the cost to acquire a new customer. This metric doesn't just include marketing costs, but also includes research and development, sales costs, etc. It's important to keep an eye on this number as it could be a determining factor for how much you spend on your digital campaigns in order to reach your desired number of conversions.
In order to make sure that you are not spending too much time and money trying to generate these new conversions, it's important to calculate your Customer Acquisition Cost early on and make sure that the number is in alignment with your desired customer acquisition ROI. This will allow you to set goals for yourself early on, and revisit your strategy as needed if you’re not reaching them.
Cost Per Lead (or CPL) is another important marketing metric that calculates the total cost to generate a lead. Leads can come in many different forms, and can vary greatly in quality. A lead can be an email address, phone number, or even a scheduled discovery call. Every lead, however, gives you some sort of opportunity to generate new business in the future.
Similar to CAC, it's important to keep track of this number, as digital marketers can know exactly what kind of usable information they are generating for their client, and at what cost.
This is perhaps the most important metric in any type of business endeavor; Return on Investment (or ROI) is the return in value from any specific investment over a specified time period. For marketers, ROI is calculated by dividing the amount of money earned from a digital marketing campaign, by how much was spent in order to generate that revenue.
ROI should always be tracked for digital marketing campaigns, because if your digital marketing strategy isn't generating enough leads and conversions, then you may need to modify the amount of money you're spending, or optimize that money to focus on more efficient and effective strategies that will increase return without necessarily increasing your investment.
When it comes to business, every company is different, and as such, will need to rely on their own unique set of KPIs and metrics to track their performance. Even the digital marketing metrics that are relevant to your business will vary greatly, depending on what you're trying to accomplish. StratDev Digital Marketing recognizes the unique and individual nature of every client, and works with your business to help develop a custom strategy that is designed to bring you the highest success possible, on your terms.
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