Our friends from down the hall (literally down the hall of the same building) recently published a blog post that we loved and really wanted to share with you guys. They hit the nail on the head with these 5 marketing metrics. After you’re done, head on over to their site and check out the rad things Volano is doing for businesses and their work flow solutions.
No matter where you go or what you read, you will have differing opinions on where your marketing resources should go, how to use keywords, or what SEO strategy you should use. Honestly, at the end of the day you have to develop the marketing strategy that works for you, your industry, and your audience. How do you find that strategy? Metrics!
You cannot approve upon what you don’t measure. You have to keep a constant finger on the pulse of your metrics. Well, that could be about 78 different metrics. We have boiled that down to the following five that we believe hold the most weight in determining the success of your marketing strategies…
-How much does it cost us to get one customer? (Customer Acquisition Cost: CAC)
Getting this number is easier than you think, but you have to be thorough and probably ready for a surprise. Start with your spend on sales plus marketing in any given duration -week, month, quarter, year, whatever. This will include overheard on these departments, salaries, incentive programs, advertising spend, commissions and bonuses. Then find out how many new customers you’ve acquired over that same time period. Divide the two numbers and there you have it, the cost behind snagging each new customer.
-How many qualified leads are we generating?
Qualified leads are more than contact information, they are potential customers that we know are in need or want of your product or service. Qualified leads pass the BANT test as explained by MVFGlobal:
Budget: do they have enough money to buy the product?
Authority: can they make a purchase decision?
Need: do they have a need that the product or service in question can fulfil
Timescale: do they have a specific time when they wish to make their purchase
-What is our conversion rate?
Tracking your conversion rates is a really simple way to measure the success of just about any online campaign, whether you’re running site ads, adwords, social media ads, or retargeting, you can set up simple trackers to measure how many people took any kind of action that started at what ad including the most important action, sales.
-What are the numbers behind our latest campaign engagement?
Campaign success isn’t just about conversions, although that is a very, very important campaign metric. Campaigns can be ideal for collecting qualified leads, getting someone to sign up for your newsletter or to download a whitepaper, click through on an ad, visit your website or follow any other CTA you’ve incorporated. These are vital engagement points that open doors and start the conversation.
-What is our CLV to CAC ratio?
We already covered what your CAC is and how to find it, now let’s cover CLV and how these two metrics work together. CLV stands for Customer Life Value and it is the total financial value of a customer over the lifetime of your relationship. Remember when we talked about the 80/20 rule, here on the blog, and how 80% of revenue typically comes from 20% of your customers? Well, the meeting of the CLV and CAC are a big part of it.
When we take into account the total life spend of that 20%, we start to think more strategically about our CAC. Instead of strategies aimed at acquiring as many customers as possible in the cheapest way, we start to consider optimizing our acquisition spend to target value rather than volume.
Marketing efforts are difficult to measure, but without the right software in place to determine the success of these campaigns, you can’t effectively manage and refine on what works. Volano can help put quantitative data to work for your marketing efforts. Combined with a little ingenuity, your marketing efforts will build greater engagement with your audience, giving them value in return for their time.