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!