Best Marketing Metrics to Track
As analytics are huge for us and every other business, marketing is also essential for success. In this article, we will combine marketing and analytics together and give you the top 10 most important marketing metrics to track.
1. Time spent on site
Marketing, especially content marketing, is all about value. If you believe that you can give value and people engage with your content see value in it, then you are on the right track. The best way to track this is time spent on site. If your visitors see the value, they will spend more time on your site.
2. Bounce Rate
In short, a bounce happens when someone sees your home page and just leaves. Your goal should be to keep your customers as long as possible. To achieve it you can add links to other articles on your content. If your users click on the article you link on your content, the bounce rate will decrease while time spent on site will increase.
Churn is the number of SaaS customers that cancel their recurring revenue services. People are hiring experts to measure churn and their reasons nowadays. It is really important because according to statistics: It will cost you 16 times more to bring a new customer up to the same level as an existing customer. As a matter of fact, the more customers a business retains, the more revenue it makes!
For example, the Harvard Business School report claims that on average, a 5% increase in customer retention rates results in a 25% - 95% increase in profits - 65% of a company's business comes from existing customers!
To calculate the churn rate, you can take the total number of customers you lost in the month you’re reporting on. Divide that by the number of customers you had at the beginning of the reporting month. Then, multiply that number by 100 to get the percentage. For example, if you lose one customer in a month that you started with 100 customers, that would equal a churn rate of 1 percent.
4. Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is the average amount of money that your customers pay during their total time of engagement.
To calculate CLV, first, you will need to calculate your Average Customer Lifetime. To do this, take one divided by the customer churn rate. For example, let’s say your monthly churn rate is 1%. Your average customer lifetime would be 1/0.01 = 100 months.
Then you need to multiply Average Customer Lifetime by your average revenue per account (ARPA) over a given period. To do this, take your total revenue divided by your total number of customers. For example, if your company brought in $100,000 in revenue last month off of 100 customers, that would be $1,000 in revenue per account.
Finally, this brings us to CLV. You will now need to multiply customer lifetime (100 months) by your ARPA ($1,000). That brings us to 100 x $1,000, or $100,000 CLV.
5. Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the amount of money that costs for you to acquire a customer.
To calculate CAC, you need to calculate all your marketing spending and divide it by the customers you acquired during that period. If you spent 250 Dollars on marketing and acquired 10 new customers then your CAC is 250/10 = 25.
6. CLV:CAC Ratio
The CLV:CAC ratio shows the lifetime value of your customers and the amount you spend to acquire them in one, single metric.
You can use this number to measure the health of your marketing programs, you can decide to invest in programs that work well or change when campaigns aren't working well.
We already calculated our CLV and CAC. To calculate this ratio simply divide CLV into CAC. Research shows that most healthy businesses have 3+ CLV: CAC ratio.
7. Qualified Leads
Leads are gained contact information from potential customers. A good marketing campaign often results in a low number of leads but a high percentage of qualified leads. Quality over quantity.
Many companies measure a marketing campaign's success off of leads. You need to have somebody to individually contact your qualified leads and treat them like royalty.
8. Monthly Recurring Revenue
Revenue, revenue, and revenue. A successful business must have the revenue to continue. The best metric to track your revenue is Monthly Recurring Revenue (MRR). MRR is the income that your company will receive every month. This income typically comes in the form of monthly subscriptions.
9. Traffic by Source
This useful metric shows you which websites you are engaging with drives organic traffic to your website and which link they click on. If you track it properly, you can always know which sites work and which content on which site work. For example, if you are posting your blog articles on Facebook and a lot of people read them then click on the link, you can continue to engage with your audience on Facebook.
10. Conversion Rate
The best comes last. The conversion rate is the most important metric on this list. It is the percentage of visitors that your website turns into a customer. You can calculate it by dividing conversions into total visitors and multiplying it with 100. For example, if you have 10 conversions and 200 visitors: 10/200 = 0.05 then multiply it with 100: 0.05 * 100 = 5. Your conversion rate is %5.
In this article, we talked about 10 important metrics for your marketing strategy and the overall success of your business. Please track them carefully. Here is the list:
- Time spent on site
- Bounce Rate
- Customer Lifetime Value (CLV)
- Customer Acquisition Cost (CAC)
- CLV:CAC Ratio
- Qualified Leads
- Monthly Recurring Revenue
- Traffic by Source
- Conversion Rate