Marketing metrics exist for a reason. Metrics give you the ability to track your progress and measure your success.
However, most small businesses don't really track marketing metrics. My goal in this article is to show you why they are important to track and give you an idea of some of the metrics you should keep an eye on.
Did you know...
When people leading their industry are doing something, there's usually a good reason.
Marketing metrics can help us improve the tactics we are using to help grow our business.
In today's article, I want to highlight a few benefits of measuring and tracking marketing metrics.
Here we go!
The Benefits of Tracking Marketing Metrics
1.Creates a Competitive Advantage
Using marketing metrics creates a competitive advantage.
Why? Because most of your competitors aren't doing it!
Here are a few reasons your competitors aren't focused on measuring marketing metrics:
- Lack of time:
Most businesses do not have the human resources to measure marketing performance systematically. Even if they do, there's an apparent lack of skill set and experience to use marketing metrics to their advantage.
- Lack of technology:
Believe it or not, some businesses do not have access to efficient and effective data measurement and analytics software even in this day and age. Measuring results isn't their priority.
- Lack of knowledge:
Some businesses are still unsure of which metrics are worth measuring. Furthermore, there are some who measure too many parameters which can lead to a marketing metrics train wreck.
How do you use marketing metrics to become more competitive? Here are simple actions you can take right now:
Measure the right metrics:
A social media marketing agency might focus on metrics such as likes, comments, shares, follows, etc. while a website development firm might focus on traffic and conversion.
Now, let me reiterate:
Measuring too many or too few marketing metrics is a huge NO NO!!!
You have to find the right balance of numbers that give you enough data to make decisions without being overwhelming.
Also, some business owners pay closer attention to secondary metrics (e.g., web traffic) than primary ones (lead conversion).
These mistakes often lead to a misunderstanding of marketing performance, where the campaign revolves around the wrong KPIs (key performance indicators) like vanity metrics.
Take note, the importance of a key metric depends on the type of business or industry, but it is imperative to choose the ones that matter to your company.
Find the time:
As a business owner, I play multiple roles in my company. I manage, I do sales tasks, I do marketing functions, and then I come home to my family to be a regular person.
My point is, it's hard to find the time. Do you have the same problem?
When it comes to marketing metrics, I suggest you use marketing software, apps, and tools to measure and track them.
Take the right action:
Identifying the right KPI and having enough time to measure marketing metrics is sometimes not enough.
It's a frustrating reality that many small business owners face.
Many of us end up not identifying the weaknesses or failing to harness the strengths of our marketing campaigns. It's very frustrating.
What's the best action in this case? Eliminate the weaknesses you identify and amplify the strengths.
“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.”― H. James Harrington
What a quote right? It's a long one, but it makes a whole lot of sense if you think about it.
The idea is straightforward:
When you measure you can improve, improvement means better results.
Marketing metrics, when tracked and measured correctly, can result in a high return on investment. It answers the question "Was it all worth it?".
Check out the related articles below to better understand how marketing metrics can improve ROI.
3. Save Money
According to a 2018 survey conducted by Rakuten Marketing:
Marketers estimate they waste 26% of their budget on marketing.
That's a quarter of marketing money that goes to the abyss! That's a lot of money!
Most business owners who waste money on marketing do it because they have ABSOLUTELY NO IDEA what works and instead throw money at different tactics with little to no results.
Here's where the use of marketing metrics comes in. Metrics can help you understand how, where, and when you should be spending your marketing budget, so you don't frivolously spend your marketing dollars.
Measurement is all about improvement!
When you have a competitive advantage and a better return on investment, you will undoubtedly grow faster than you would have otherwise.
Your business growth will be much faster when you track the right metrics and use the information to your advantage.
5.Know What Works
Measuring brings clarity to what is working and what is not.
The numbers don't lie. When you track the right metrics, you will know whether specific marketing campaigns were effective. Without the numbers, you'll just be guessing
The Marketing Metrics You Should Measure Now
Now that we have shed light on the benefits, it's also important to give you a few examples of marketing metrics you may want to measure and track. I've kept this list short on purpose.
There's no need to overcomplicate things. As you get more sophisticated in your marketing, you can always add KPI's to the list. Here's where to start...
1. Customer Acquisition Cost (CAC)
Add up all your marketing expenses for a given period and divide it by the number of new customers.
This is important to know because if you spend too much to acquire customers, you can go out of business. On the flip side, if you don't spend enough acquiring customers, you might be limiting your business growth.
Here's a great resource that will help you dig further into how much you can spend to acquire a customer.
2. Conversion Rate
This is the total number of people who took the requested action over the total number of visitors. Marketing is all about testing and making incremental improvements from those tests.
By comparing conversion rates you can easily determine winners and losers, and keep testing new versions against your winners.
3. Return on Investment (ROI)
This is the gain or loss on an investment relative to the amount invested. ROI will help you determine whether a particular marketing campaign made money or not.
You can also use ROI to compare different marketing channels to determine your most profitable channels.
4. CLV (Customer Lifetime Value)
This is the total profit you make on the average customer for the entire time they do business with you. For most businesses, the money they make on the first sale isn't everything.
Knowing LTV can give you an idea of how much you can spend to acquire customers.
5. Sales Revenue
Isn't this the number we all really want to know? There are a lot of broad contributors to this number, but it can give you a good indication if your marketing is working as a whole.
There you go! Those are the most significant benefits of measuring and tracking marketing metrics as well as some metrics you should start tracking now.
So what do you think about this article? What other benefits did I miss? What marketing metrics are you focused on?
Let us know in the comments section and feel free to SHARE this article if you learned something valuable from it.
Creating a solid marketing strategy is a must for effective marketing? Check out our Ultimate Guide to Marketing Strategy to learn more.
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