“In the time it took you to read this sentence 20m emails have been sent.”
– John Watton
A successful marketing strategy is about identifying the goals, researching the market, understanding the audience, targeting a particular section of customers, making a SWOT analysis based on the opportunities, weaknesses and potential competitors. It is not that simple.
In the current scenario where there is so much competition between brands and each one is trying to get the maximum market share. Making the right strategy is not everybody’s cup of tea. One needs to focus on all the aspects. Implementing the strategy successfully is yet another ordeal.
Fulfilling the demands of the target audience is every company’s aim. Companies often use tools to measure the traffic and volume on their website. These are the basic tools and are called metrics.
What are marketing metrics?
To ensure success of any marketing campaign the team of marketers need to focus on marketing metrics. Now, what exactly is marketing metrics? It is a method by which the companies can track how successful their marketing campaign has been.
It is a quantifiable method to ensure the effectiveness of the campaign. A campaign needs to reach people to ensure that their brand and product is known to all.
The concept of marketing metrics is used by the marketers to understand the success of the marketing strategies. It will act as a basis to plan the future campaigns and effectively optimize the current one.
(Check out our blog on Marketing Analytics)
Basics about KPI
KPI is also called as the key performance indicator. We know that after adopting and implementing a market strategy we need to measure and analyse the results. Comparing the results with the previous one’s help us to identify the areas in which the marketing strategy lacked.
Marketing metrics and KPI are the most useful and advanced tools (quantifiable measure) with which the strategists can see whether the resources were effectively and efficiently utilised or not.
Marketing is done to promote the product or service. In order to see if the expenditure on marketing was worthwhile or not, marketing metrics come into picture. A popular study done by Google and MIT reveals that almost 89% of the companies use strategic metrics like gross revenue, market share or CLV.
Let us look at what the basic research says about the marketers:
Can you see the difference in the percentage? Only 4% use the metrics to analyse their returns whose cycle is greater than 6 months. The rest all rely on metrics. Knowing the ROI is important as the stakeholders of the company will get help in understanding the company’s performance better.Thus, using metrics is important.
Take the case of Amazon which is a leading e-commerce website. Their amazon advertising facility provides help to various metric based options.
Their latest tool known as the Amazon Attribution (beta) is the perfect solution to track all your non-amazon marketing channels like search, audio, visual, video. This tool is useful for all the start-ups and established companies to track their marketing methods.
(Recommended blog - How Amazon uses Big Data)
Different types of marketing metrics and their uses
Here is a basic example to understand offline and online metrics in marketing. Suppose a retailer that conducts business offline conducts a study to know about the minimum purchase value of customers, their brand knowledge, traffic during the peak times of the day this would count as traditional metrics or offline metrics.
On the other hand a businessman that does online business or digital marketing might adopt an metrics system designed online using artificial intelligence to understand the various parameters.
Here you will see various types of marketing metrics that companies can apply along with their uses and some examples.
Categories of Marketing Metrics
Retention rate of customer
Companies always keep a track of their old customers. Old customers implies the ones that always come back to them instead of opting for the competitor brands.
Retention rate plays a significant role in service sector industries as their profit and revenue depends on it. It is the most important metric for digital marketing companies and service providers.
Incremental rate of subscribers
Blogs, YouTube, Facebook, Twitter, Instagram and all such methods of marketing that companies use have to be checked frequently to see the growth of subscribers.
Increase in subscribers is important to promote the product and ensure proper communication to masses. Nowadays these sources account for major areas of promotions. It is an important metric for channels and media sources.
Per lead cost
Whenever a company organises a marketing campaign, cost per lead is the most effective way to find the average cost that is paid for a successful lead. Companies can rationalize their budgets of marketing by calculating the lead price.
(Recommended blog - Marketing Communication Mix)
CAC stands for customer acquisition cost. Companies target new customers to promote their products and services. While preparing the marketing strategy and analysing it, it is important to calculate the CAC.
It helps the companies to find out which portion or segment is most profitable for them and which one is least. They can categorize the customers and prepare a marketing budget according to it. This metric has also proven to be very important in cases where investors are trying to find potential clients.
Reviews and Testimonials
Now most of the businesses deal online. Reviews and testimonials help them to understand the customers. How credible their products and services are? Whether they have properly dealt with the issues and complaints?
Are customers happy? Why is the feedback positive or negative? All these questions can get answers through this marketing metric.
You must have seen the reviews on Amazon. Reviews are about how the customer felt after using the product. They give stars as ratings.
People always look for reviews before buying any product. So, the review metric is significant for e-commerce websites like Amazon, Flipkart, Fern and Petals and others.
Testimonial is the experience of the customer after using a product that they describe on the site. Most sites do not have the time to maintain testimonials of all the customers. So, they rely on views, clicks as an alternate measure.
Have you ever seen any site that shows the number of visitors? You can check out and see the bottom portion of the home page. You can see the number of people that have visited the site. It is an important metric too.
Most businesses use Google Analytics for this. Marketers can figure out the pages and links that are visited more often and optimize those that have been visited less.
It is one of the most important marketing metrics for a company. Calculation of ROI is done to compare the cost incurred during the campaigns with the revenue that is generated by it.
This metric helps to oversee the efficiency of the company. With AI, there are a lot of automatic ROI calculators. Computing ROI on a sheet of paper can be quite challenging as there are so many different campaigns that need to be clubbed and various ratios to be kept in mind.
It is a method of advertising opted by the companies. Lead is the way through which the companies can provide information to the customers.
Customers' basic mindset about the product and their willingness to make a purchase is the main point in lead generation. Based on the behaviour we can divide leads into 2 types:
Market qualified leads
People who can be the customers are the leads companies look for in market qualified leads. Marketing metrics can check those leads based on their website clicks, website visits, time spent on the site.
Sales qualified leads
SQL is used by the sales teams for potential customers. It is also a way to find out the potential clients a company can make.
The basic marketing metrics tools like email marketing, digital marketing are used by every business big or small. One needs to understand the reason for combining different strategies in marketing and the success rate of them.
Some famous marketers that have been successful are Sorav Jain, Prateek Shah, Pradeep Chopra. Using the tools effectively can thrive the digital marketing business in today’s time.