Month: August 2018

Marketing metrics can be considered key performance indicators (KPIs) that marketing teams measure and track to determine how well their marketing strategies are doing.

You may have overall important marketing metrics that you need to report to your CEO as well as those specific to certain marketing channels such as email marketing, social media or organic search.

Let’s take the example of  a small digital marketing agency with clients both locally and nationally and see what kinds of marketing metric might be important to them.

Average Revenue per User (ARPU)

This is a fairly straightforward metric and it just measures how much each average user tends to spend with your company. Just divide your total revenue by the total number of customers. By calculating and monitoring this number, you can decide if you want to find more customers while maintaining your current ARPU or should you focus your energy on increasing spend among your existing customers.

Lead -to-Sales Conversion Rate

Getting leads is great – that’s what your marketing team is for. At the same time, you need to ensure that your leads turn to actual revenue. That’s where the money is. You first need to first establish a baseline number to understand how well you are doing at converting your leads. Then, put in strategies to increase this number over time. For some companies, small improvements in the lead-to-sales conversion rate can mean as much as two to three times their current revenue.

Percentage of business by referral

How much of your business is generated by referrals from past customers? This is a good gauge to understanding how well your customers perceive your brand. Are they referring your friends and family or do they not care enough?

Customer Acquisition Costs

Your business needs more new customers all the time. This is a given. However, most companies do not even know how much each new customer is costing them. This is important because you want to ensure that your customer acquisition costs stay below your customer lifetime value. If your CAC is higher, then you are losing money for each new customer you are bringing in.

Net Promoter Score

Net Promoter Score or NPS is a very common metric being used in a variety of industries to measure overall customer satisfaction. It’s not surprising to find big service-based businesses such as banks valuing NPS over other metrics.

Calculating NPS is relatively simple – you send out a survey to your customers and ask them, from a scale of 1 to 10, how likely they are to recommend your company to their friends or family. A high score means that you’re doing well while a low score means that you have much room for improvement.

Research has suggested that companies with high NPS tend to succeed over the long run while those with low NPS will start to suffer not long afterward.

Other Marketing Metrics

These are some of the more common marketing metrics and KPIs that companies use to measure their marketing effectiveness. Do you have any more that you would like to share with us? Put them in the comments section below!

 

 

Some of you may know what it is, some may not and some have heard of it before but are not sure what it is. I’m talking about Cohort Analysis.

If you have been in the data analysis field for any period of time, you would know that cohort analysis is a very common data analysis method that entails you examine segments of users based on their sign on or acquisition date.

A cohort means a subset of users based on a date. So you can use different variables as the start date. For example, a common type of cohort analysis used in ecommerce companies is to analyse the behaviour of customers that made a first purchase during a particular promotion. This gives them an idea of how well the promotion performed, above and beyond the first sale. Did the customers continue to purchase after the promotion or did they churn? How does their spend compare with others?

Cohort Analysis in Google Analytics

If you’re new to cohort analysis, then Google Analytics is a great place to get your feet wet. It wasn’t too long ago that they implemented cohort analysis reports.

Cohort Analysis on Google Analytics is somewhat limited though in the sense that it can only measure a cohort based on the date of first session. That is the only Cohort Type they have at the moment, but we can still use that to learn more about cohort analysis.

Based on the screenshot above, you can see that 17.01% of the visitors that were acquired on Jan 27 came back again the next day. However, on Day 2, only 7.54% of that cohort came back.

The 17.01% of people that came back on Day 1 from the Jan 27 cohort is much more than the other days. Why is that the case? Now this is where you get the chance to do a deep dive on your marketing activities to find out what was working for them.

One of the good things about Google Analytics’ cohort analysis is that you can still segment the cohorts by certain variables. In the screenshot above, you can see that the previous cohort was segmented even further by the types of devices that they use to visit the site. Mobile and tablet traffic was especially high that day, accounting for most of the spike in traffic.

How you are going to use cohort analysis will depend on various factors. One of those is the type of website you are running or industry your are in.

If you are in ecommerce, you would want a better understanding of which sales drove traffic and sales, and what happened after that. If a customer that bought a promotional item on Day 1, did they return to buy anything else within a given time period? Or did they churn?

If you are a publisher, you want to better understand engagement over time such as how long visitors spent on your website or the bounce rate. This way, you can plan and create much more engaging content for your visitors.