Do you spend hours upon hours on marketing your business every week? Do you still find yourself wondering why none of your hard work seems to be paying off?
If you’re struggling with marketing, the solution might not necessarily be to put in more hours. You might need to work smarter instead of harder.
Part of working smarter is measuring the effectiveness of your marketing strategies so you can determine what’s working and what isn’t. Here are the seven marketing metrics you should track:
1. Customer Acquisition Cost
How much money do you have to spend to bring in a new customer? To calculate your customer acquisition cost, start by tallying up all of your marketing-related expenses in a given time period (quarterly, yearly, monthly, etc.).
These expenses include the following:
- Content marketing
- Website development and maintenance
- Contracts with marketing technology vendors
After you’ve added all of these up, divide them by the number of new customers you’ve brought in during the same time period.
2. Customer Lifetime Value
Calculating customer lifetime value helps you figure out how much money, on average, your customers are going to spend throughout the duration of their relationship with your brand.
To calculate customer lifetime, start by determining average customer value. To get this number, multiply your average purchase value by the average purchase frequency rate.
Once you’ve found your average customer value, multiply that number by the average customer lifespan (the amount of time they stick with your business).
3. Ratio of Lifetime Value to Acquisition Cost
By calculating the ratio of customer lifetime value to customer acquisition cost, you can get a better idea of the relationship between customer growth and marketing spending.
To calculate this, simply divide customer lifetime value by the customer acquisition cost. As a general rule, it’s best if your customer lifetime value is higher than your acquisition cost.
4. Retention Rate
How good are you at keeping customers around long-term? Calculating your customer retention rate will help you find out.
Here’s how you can calculate customer retention rate:
- Add up the number of customers you have at the end of a specific period (PE)
- Add up the number of new customers you acquired during that same period (PN)
- Identify the number of customers you had at the start of that period (PS)
- Subtract PE from PN, then divide that number by PS
- Multiply that number by 100
5. Paid Advertising Metrics
If you use paid advertising as part of your marketing strategy, make sure you’re also paying attention to these ad metrics:
- Click-through rate
- Conversion rate
6. SEO Metrics
Your SEO metrics also help you to get an idea of how effective your SEO strategy is. Here are some of the top ones to monitor:
- Organic web traffic
- Conversions from organic traffic
- Revenue from organic searches
- Traffic from branded and non-branded keywords
7. Lead Source Attribution
Lead source attribution helps you to identify your most powerful lead generators (email, social media, paid ads, etc.). You can monitor lead source attribution in a few different ways, including these:
- First-touch (the first channel or campaign with which a lead engaged)
- Last-touch (the last channel, campaign, or piece of content with which a lead engaged)
- Multi-source (all of the channels or campaigns that a lead engages with on their journey)
Start Tracking These Marketing Metrics Today
Start tracking these seven marketing metrics today to get a better sense of how effective your marketing strategy truly is.
Are your metrics painting a grim picture of the effectiveness of your marketing efforts? Fill out the form below and a Baam team member would be happy to chat with you about potential marketing improvements.