Determining the marketing metrics that matter is the cornerstone of effective campaigns, regardless of whether you’re just getting started or need to update your present approach.
After all, it is impossible to choose the best course of action without knowing your objectives. Effective marketing requires collecting figures, analysing data, and assessing outcomes since it is a science, not an art.
But first, let’s define what marketing metrics are. Marketers track, document, and evaluate development throughout time using marketing metrics. The measures themselves are diverse and subject to variation between platforms. Marketers must be clear about their objectives and select the measures that will be used to gauge their success and failure. Even if there are several functional metrics you may monitor, you need to focus on the ones that are most important for each campaign.
Too many marketing initiatives base their efficacy assessments on simple indicators like lead numbers and website traffic. While it is crucial to address these fundamentals, neglecting to go further results in the loss of significant information about your marketing strategy and worthwhile prospects for development.
Google research conducted in collaboration with MIT found that 89% of top marketers assess the success of their campaigns using strategic measures like CLV, gross revenue, and market share. The following are some advantages of utilising these and other metrics:
• Having the information necessary to assist well-informed decision-making
• Being aware of the channels that offer the best return on investment
• Justifying marketing expenditures and overall budget allocations
• Improving outcomes across the board
• Focusing on where and how to maximise lead conversions
Therefore, marketing metrics not only assist you and your team in improving, but they also effectively convey to stakeholders the value your department brings to the organisation as a whole.
Use these 15 cutting-edge marketing metrics to improve your campaigns, increase consumer conversion, and boost marketing ROI.
Top 15 Marketing Metrics
1. BRAND AWARENESS
Brand awareness can be described as how easily the target audience can recall or recognizes a product or a company by its name, logo, or tagline.
Example:
BMW ran a campaign featuring Instagram influencers, where 50 million followers of @sincerelyjules and 1 million followers of @thatsojack were exposed to BMW.
2. TEST-DRIVE
The term test drive refers to an opportunity of using a product that a potential customer gets prior to a potential purchase. Trying out a product often increases the probability of purchase.
Example:
Netflix provides a free 1-month trial and enjoys a 33.3% test drive conversion rate.
3. CUSTOMER CHURN RATE
Customer churn rate is one of the important marketing metrics the percentage of existing customers a business loses because the customers opt to stop purchasing a product or renewing a service.
Example:
Reliance Jio has the lowest churn in the industry, at just 0.75% per month while also adding 120 million new customers in 2019.
4. CUSTOMER SATISFACTION (CSAT)
Customer satisfaction as a marketing metric quantifies how well a business is doing in terms of reaching or surpassing a customer’s desired expectation.
Example:
Based on the survey conducted by The American Customer Satisfaction Index of just under 16,000 consumers, or 15,881 to be precise, it seems like Apple is the most popular smartphone company of all in terms of consumer satisfaction. Apple Achieves an 81% Customer Satisfaction Rating, higher than any other smartphone company.
5. TAKE RATE
Take rate refers to the number of potential customers that use the ‘call to action’ resulting in a visitor-to-lead conversion that can be potentially further converted into a sale.
Example:
Amazon and Etsy email their customers daily/weekly offers with a CTA, which a customer can click through to be led to a landing page. The percentage of people who click through would be the take rate.
6. PROFIT
Profit is one of those marketing metrics that determines if a business is successful. Profit can be calculated by subtracting the total cost incurred from the revenue generated.
Example:
Coca-Cola’s annual gross profit for 2022 was $25.004B, a 7.32% increase from 2021.
7. NET PRESENT VALUE (NPV)
NPV helps in capital budgeting which in turn helps in taking important investment decisions for the business. It also helps investors in evaluating the profitability of a future possible investment or project.
NPV = Present Value of Future Cash Flows – Project’s Initial Investment
Example:
Net Present Value (NPV) at 6% for Kraft Foods Inc. and Cadbury PLC is 2635972.
8. INTERNAL RATE OF RETURN
The internal rate of return exhibits how beneficial a project or investment can be for the business. If the IRR value is bigger than the value of a company’s required rate of return, then that project is considered attractive.
Example:
For a pizza place, estimate all the costs and earnings for the next two years, and then calculate the NPV at various discount rates. At 6%, an NPV is $2000.
But, to get zero as NPV, you need to use a higher discount rate, say 8% interest: At 8%, your NPV calculation gives you a net loss of −$1600. Now it’s negative. So you try a discount rate in between the two, say with 7% interest: At 7%, you get an NPV of $15.That is close enough to zero so you can estimate that your IRR is just slightly higher than 7%.
9. PAYBACK PERIOD
Payback period as a marketing metric refers to the duration it takes to recover the initially invested money. This calculation considers projects with quick returns to be more attractive rather than long-term success.
Example:
Project A and B costs 1 million each with an increment of 100,000 and 75,000 respectively each year and the initial investment is recovered in 5 and 3 years respectively.
So based solely on the payback period method, the second project is a better investment.
10. CUSTOMER LIFE TIME VALUE (CLTV)
CLTV is a metric that discusses the total worth of a customer over the entire course of his/her relationship with the business.
CLV = Total customer revenue – the costs of acquiring and serving the customer
Example:
Amazon focuses on keeping the prices low and satisfying the customers now to get massive returns over a period of time.
11. COST PER CLICK
CPC as a metric talks about how much an advertiser is charged each time audience clicks through an online advertisement. Each click is considered to be an interaction with the business which costs the business money.
CPC = Total cost of clicks / total number of clicks
Example:
As a SEO executive at Aditya Group, the budget for each online campaign was set by me and each time someone clicked through the ad Aditya Group was charged from the already set budget.
You can get an average CPC in Ahref’s Keywords Explorer while doing keyword research
12. TRANSACTION CONVERSION RATE
Transaction conversion rate is the percentage of clicks or interactions that gets converted into a sale. This can be easily calculated by using the following formula:
Example:
An ad campaign I ran during my time at Baqalo India received 127 interactions/clicks but the number of purchases done through these interactions where just 17 over the period of 1 week.
TCR= 17/127 = 0.13%.
13. RETURN ON ADVERTISING
Return on Ad Spend (ROAS) is the sum of money a company earns on the sum of money spent on advertisements. The revenue should be high enough for an ad campaign to be considered a good investment.
Example:
Lego giant saw a 3.4X return on ad spend for its bot for Messenger campaign that offered people gift suggestions.
14. THE BOUNCE RATE
Bounce rate is the percentage of people who refused to take any further action after visiting a website. Bounce rate = Total one-page results/ Total entrance visits.
Example:
If the landing page receives 2,000 visitors in a month, and only 1000 of those visitors visited other pages of the website or took any other action then the bounce rate would be 50%.
Read More: Impact of Slow Website Loading Speed on User Experience
15. WORD OF MOUTH
Modern word of mouth describes both intentional efforts and instances that take place naturally where users share their experience with a brand.
This metrics can be measured using surveys and social listening also online tools that shows engagement rate etc.
Example:
Most You-tubers use the comments on their videos as the qualitative data that enables them to measure word of mouth as a metric.
Conclusion
Even if anything can be measured, it’s crucial to know what you’re monitoring and why.
Don’t, however, spend too much time on the laborious manual data input work. When firms place an excessive amount of emphasis on rules, procedures, and measurements, employees may not be able to perform at their highest level, claims corporate transformation expert and TED speaker Yves Morieux.
You may focus on the creative aspect of your marketing initiatives by automating these procedures when you can.
Metrics are useless if they’re not put to creative use in your next initiatives, therefore you should continually be asking yourself, “How can this data help our team to make something great?”
