The shift toward digital marketing arms marketers with more data than they’ll ever need to make campaign decisions. We no longer need to make marketing decisions based on intuition alone.
This data overload has presented another challenge, however. With so many metrics available to us, how do we choose what to track? Not every company has a massive marketing team that can track every metric available. We have to prioritize the data most relevant to our goals.
In this post, we cover 7 essential marketing metrics you should track.
What are marketing metrics?
Marketing metrics are measurable values marketers use to identify the effectiveness of their campaigns. Marketing metrics are used for digital marketing and traditional marketing. There are many marketing metrics to choose from. The specific metrics you track will depend on the marketing channels you use as well as what metrics are most relevant to your company.
The marketing metrics you need to measure
Marketing qualified leads
Marketing qualified leads (MQL) is a must-track metric. An MQL is a website user who’s proven to be interested in your product or service and therefore qualified for follow-up with a salesperson. These website visitors tend to convert more than others and are more engaged overall.
The first step to tracking MQLs is defining what a marketing qualified lead looks like for your company. You can refer to your buyer personas and analytics to inform this definition. Next, analyze demographic and behavioral data, engagement factors and create a lead scoring system to identify MQLs.
Here are some actions that can signal an MQL:
- Online form submissions
- Using software demos
- Adding items to cart, a wish list, or favoriting them
- Repeat site visitors who spend a lot of time on the site
- Downloading freebies from your site
Tracking MQL metrics provides insight into where certain users are in their buyer journey, which can help your marketing team learn how to nudge them down the funnel.
Brand awareness indicates how potential customers perceive your brand. Tracking brand awareness can show you how recognizable your brand is to your target audience, as well as how your potential customers feel about your brand.
Tracking brand awareness is critical to a brand’s success because people are more likely to purchase and engage with brands they recognize and feel positively about. In fact, brand affinity can increase click-through and conversion rates by 3 times. Building brand awareness also boosts customer loyalty.
Tracking brand awareness helps you influence how customers perceive your brand. Once you’re aware of how customers feel about your brand, you can work them in your favor through content creation, social media, online advertising, and referrals.
Tracking brand awareness can be tricky, but it’s doable with the right KPIs.
First, examine your website traffic. The more people who search up your site, the more people are aware of your business.
The second KPI you can use to measure brand awareness is social shares. Take a look at how people are engaging with your brand on social media. Are they liking and sharing your content? If so, your brand awareness strategies are probably effective.
Lastly, your overall sales are a good indicator of whether or not your brand awareness efforts are working. If your sales are going up, your efforts are likely contributing to this spike.
Customer engagement describes the emotional connection customers have with your brand. Engaged customers are more likely to purchase from your business. An engaged customer produces 23% more revenue than an average customer.
Monitoring customer engagement shows you how customers are responding to your marketing efforts. Tracking this metric allows you to course correct, adjusting your content strategy to boost engagement.
Here are some key performance indicators you can use to track your customer engagement.
First comes social media engagement. How customers engage with your content on social media is a good indicator of how they’re engaging with your brand as a whole.
App download and usage is another metric you can use to track customer engagement. This KPI is an especially effective indicator of mobile customer engagement. Go one step further by looking into how often customers use your app.
You can also analyze your bounce rate, time on site, and return users frequency. If your bounce rate is too high, that could mean customers aren’t engaging with your site enough. The average time users spend on your site will give you similar results. The more time users spend on your site, the more engaged they are. Additionally, your engagement is likely high if you have a high return users frequency. The more users return to your site, the more they engage with your brand.
Cost per acquisition (CPA)
Cost per acquisition is one of the most effective marketing metrics to track the general success of your marketing efforts. This metric gauges how much it costs to acquire a single paying customer on the campaign or channel level. Ultimately, cost per acquisition judges the cost per conversion during a marketing campaign.
Tracking the cost per acquisition is important because it reveals the overall cost of successful advertising campaigns. Understanding your CPA helps prevent overspending on customer acquisition.
You can calculate CPA using this formula: CPA = total campaign cost / total number of conversions
Calculating CPA can help you lower the overall cost of future campaigns.
Return on marketing investment
Return on marketing investment is a metric that measures how much revenue a campaign is yielding compared to the cost of running the campaign. This metric shows marketers how effective their time, energy, and money is when it comes to growing the overall company.
Here are the two most common formulas for calculating marketing ROI:
The first is (sales growth-marketing cost) / marketing cost = marketing ROI.
This is the most simple formula, but it assumes all sales growth is the result of your marketing efforts. The second formula is (sales growth-organic sales growth-marketing cost) / marketing cost = marketing ROI.
This formula takes into account organic sales and is more realistic.
You can use return on marketing investment to justify your marketing spend and budget allocation for future campaigns. Track this metric for a specific time period or on a per campaign basis.
Return on marketing investment is also used for competitive analysis. Tracking the marketing ROI of competitors shows you how your marketing team is performing in comparison to others in your industry.
This metric can also be used to distribute marketing budgets across various channels. Calculate marketing ROI for individual channels to see which are most effective.
Customer lifetime value
Customer lifetime value shows how much revenue a company can expect from a single customer. This metric compares a customer’s potential revenue value to their predicted lifespan as a customer.
Customer lifetime value can be calculated using this formula: customer lifetime value=customer value X average customer lifespan
This is a valuable marketing metric to track because it allows you to identify the customer segments that provide the value most valuable to the company. Identifying the customers who contribute most to your company’s revenue gives you the opportunity to nurture them further with targeted products and services.
Optimizing customer lifetime value boosts customer loyalty and retention as well. Customer loyalty can result in increased referrals, positive reviews, and sales. Tracking customer lifetime value can also reduce customer acquisition costs.
Customer retention measures your ability to sell to pre-existing customers. Measuring customer retention is all about increasing your ability to convert new customers into repeat customers.
Retaining customers boosts revenue. Returning customers spend 67% more than new customers on average.
To calculate customer retention rate (CRR), you need three pieces of data: the number of existing customers at the start of the period (S), the number of total customers at the end of the time period (E), and the number of new customers within the time period (N).
The formula goes like this: [(E-N)/S]x100=CRR
Measuring your customer retention rate is important because new customers are 5 to 10 times more expensive than existing customers on average. Plus, loyal customers offer their continuing support via word of mouth referrals. A high customer retention rate is key to increasing revenue overall.
Tracking your customer retention rate arms you with the data you need to triage the happiness of your customers. You can track the CRR for specific segments of your customers, then brainstorm ways to nurture non-repeat customers into returning.
Where to go from here
Now that we’ve covered the 7 essential marketing metrics you need to track, it’s up to you to prioritize which ones are most important to your team’s success. Every company is different. Depending on your products, services, and user experience, the most effective marketing metrics to track will vary from company to company.
While you may not be able to track every metric you have access to, keeping up with a few key metrics and applying what you learn to your marketing strategy is enough to improve your brand awareness and boost sales.