Working with clients and agencies for the past 10 years has driven home the importance of using data for strategic decision-making and growth.
Instead of well-visualized data, my clients have typically been sent reports with number-filled tables that show no conclusions, or incomprehensible multi-colored graphs that don’t prove anything. These reports fail to convey, in just a few seconds, the meaning of the data. And without good data analysis, clients and senior leaders don’t know how to make smart business decisions.
Depending on the type of marketing you’re doing, these key metrics are helpful in being strategic for the business. If you’re not calculating all of these now, put strategies into place start looking at these, going forward.
- What are the Key Performance Indicators (KPIs) for each marketing campaign?
To gauge the success of your marketing campaigns, it’s vital to establish clear Key Performance Indicators (KPIs) before you even begin. These might be:
- increasing website traffic 20%
- growing the number of leads by 50%
- improving conversion rates by 10%
- enhancing brand awareness 25%
KPIs serve as well-defined targets; moving towards them or hitting them shows progress. Marketing teams should track and report these KPIs monthly or quarterly, to demonstrate the impact and success of their efforts.
2) What are my Conversion Rates?
Whether it’s a sale, a lead, or an email signup, tracking conversion rates helps you understand how well your marketing tactics translate into tangible actions. Your data should show, very clearly, what the conversion rates are across different channels and campaigns.
You might have more than one conversion rate, such as:
- Content downloads
- Video views
- Product sales
No matter what these conversions are, it’s important to track them and see if you can improve them over time.
3) What’s my Customer Acquisition Cost (CAC)?
Understanding the cost of acquiring a new customer is essential. The Customer Acquisition Cost (CAC) is the average spend required to attract and convert a prospect into a paying customer. By analyzing your CAC, you can identify the most cost-effective marketing channels, to optimize your marketing budget.
It often takes time to calculate a CAC, but this doesn’t mean it shouldn’t be done. Once you’ve established your current CAC, you can work on ways to bring that cost down.
4) What’s my Return on Investment (ROI)?
At the core of every marketing campaign lies the question, “Is it worth it?” Your Return on Investment (ROI) is the most fundamental metric quantifying the effectiveness of marketing campaigns.
Your ROI is simply the revenue generated by your campaigns (or the number of leads created) versus the price of the campaign(s). Looking at your ROI over time shows you the profitability of your campaigns. Trying new marketing tactics (such as using AI) can help you find ways to lower your ROI.
5) What is the Lifetime Value of each Customer (CLV)?
It’s critical to acquire new customers, but it’s just as important to foster long-term relationships with existing customers. Your Customer Lifetime Value (CLV) quantifies the revenues generated over the long term for each customer.
Looking at your CLV helps you identify high-value customers, and helps you tailor your marketing strategies to prioritize customer retention initiatives. Your CLV should increase over time, not decrease.
Are you able to understand each of these five metrics? If not, it’s time to start. Not sure where to begin? Contact me and let’s talk.