Marketing Metrics That Matter
Metrics are for planning. Metrics are for execution. Metrics are for growth.
Hey there!
How was January for you? Hope you’re back on track with your business goals and plans. Speaking of goals, the next important thing that often happens to be a grey area for small businesses is the kind of metrics to track.
During my consulting assignments with startups and small businesses, I have observed the ambiguity around metrics ranging from one end of the spectrum to another. The ones who are too busy to track any metrics and rely on their intuition only, some that only have a barebone version of metrics tracked sporadically, and then the groups that track every single metric because a consultant asked them to.
Metrics are the holy grail of clarity but could lead you astray if not dealt with carefully.
So, how do we go about figuring out the metrics that matter? The answer: it depends. It depends on your business category, its goals, and marketing objective.
It also depends upon the stage of your marketing funnel for which you are running a campaign - awareness, interest, consideration, intent, evaluation, purchase, or loyalty. Each of these stages requires different metrics to be tracked.
At a broader level, here are some of the key marketing metrics that a small business or a solopreneur may track:
Visit to conversion rate: Of all the people who visited your landing page, how many of them converted? And conversion doesn’t necessarily mean a purchase. It can be any conversion goal that you set. E.g., capturing leads, signing up for the newsletter, etc.
Qualified leads per channel: This is something crucial for small businesses or solopreneurs. Most of them do not have a large pool of resources to manage multiple marketing channels. It’s always good to try out different channels. But it’s equally important to analyze the high performing ones for leads/conversions and focus your efforts there.
Customer acquisition cost: Customer acquisition cost or CAC is how much you spend on average to acquire a new customer. As a business, CAC is one of the most important metrics to track. Additionally, it helps to understand if the CAC varies by the marketing channel, seasonality, money, message type, or any other parameter relevant to your category.
Average revenue per user: It’s the total revenue earned during a period divided by the number of users acquired during that period. This is more relevant when you are selling different products at different prices. Knowing your average revenue per user (ARPU) also helps you understand how much to budget for customer acquisition in your future campaigns.
Return on marketing investment: What kind of return are you getting on all our marketing spend? It need not be only in terms of revenue, it depends upon your marketing goal. For example, did the latest email campaign lead to more clicks or downloads? Did my social media posts increase the sign-ups?
Churn rate: The number of customers lost in a specified period divided by the number of customers that you had at the beginning of that period. This one may not be relevant for all small businesses but very important for the ones who are running subscription businesses like monthly newsletters, licenses, etc.
Referrals: How happy are your existing customers and how many referrals do they bring in? Word of mouth, when done right, helps new brands immensely. We are often so focused on acquiring new leads that we tend to miss out on nurturing our relationship with the existing customers.
These metrics are beyond the vanity metrics like - daily visitors, organic traffic, time spent on the site, bounce rate, pages per session, daily install/uninstall in case of apps, and more. You must track these and any analytics tool can help you get these numbers. My favorite recommendation still remains Google Analytics. In case your marketing effort is heavily dependent on social media, then you must also check the insights section of each channel. Instagram. Facebook, LinkedIn, almost all of them have their own robust insight tools now.
There are hundreds of free templates on the internet to track marketing metrics. You may pick any one of your choices or just rely on the good old spreadsheet. For me, Google sheets still serve the purpose, for small to midsize businesses.
A quick note, before I wrap up - tracking these or any number of metrics will mean nothing if you don’t act on them. You may track some or all of these. But these metrics only matter when you use the insights to understand your areas of improvement and growth.
Cheers to growth,
Kanupriya
*This post is the 8th post in a 10-post series of “Marketing Fundamentals For Solopreneurs and Small Businesses”. If you would like to read the earlier posts, you may find them here. The ninth post available here.
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Know more about ‘Connecting The Dots’ here. Looking forward to connecting the dots together :).