If you don’t know where to start, here are some key metrics to track. These are key metrics that will help you assess how people are responding to your brand, whether they are engaged, and how your spending and revenues compare.
- Lead Generation.
- Conversion rate.
- Retention
- Attraction
- Customer Acquisition Cost (CAC)
- Return On Ad Spend (ROAS)
- Return on Investment (ROI)
Lead Generation
This can include metrics such as cost per lead (CPL), click-through rate (CTR), qualified leads for sales (SQL) and qualified leads for marketing (MQL).
Leads are users who could potentially become customers/buyers, so it’s pretty important to measure the volume of these generated leads.
Leads can be generated in many ways, including contact forms, landing pages, email campaigns, blog CTAs, online events and seminars, and more.
If you’re getting a large number of leads, it means your strategy is working and your customers are seeing the value of what you’re offering.
Conversion Rate
Conversion is when a user takes the action you want them to take, whether it’s making a sale, joining your email list, sharing your social media article, or simply filling out a survey.
To determine your conversion rate, you simply divide the number of conversions by the number of visitors.
The type of conversions you’ll track depends on your goal, but either way, conversion tracking will let you know what successfully drives your potential customers to action and increases your chances of converting them into customers.
Retention
Generating interest in your brand is great, but it’s also important to remember your existing customers.
Retaining customers means keeping them in mind throughout the customer journey and building brand loyalty by responding to blog comments, offering them discount codes, asking their opinion through surveys/quizzes, accepting guest materials, and so on.
To track retention, you can track lifetime customer value (CLV), churn rates, revenue growth, and net promoter score (NPS).
Look at loyal visitors to see what they like and interact with, and then incorporate that into your marketing campaigns.
Engagement
Customer engagement metrics tell you how and whether people are interacting with your brand, whether it’s on social media, search engines, email or your website.
This is a critical metric that will tell you a lot not only about your audience, but also which of your marketing activities are working and which are not.
The specific engagement metrics you decide to track will depend on your overall goals, but they can include everything from overall social media activity (shares, likes and followers) to CTR, time on page, follower list growth rate, sessions and so on.
The best way to determine if you’re succeeding in this area is to look at engagement as a percentage of your audience. To do this, take the total number of engagements and divide by the number of impressions or reach. A high rate means that people are finding your content interesting.
Your engagement report should also include different networks so you can see which platforms are performing best.
Cost of Customer Acquisition (CAC)
The cost of customer acquisition is how much money you spend to attract a new customer; a user who purchases your product or service. It’s important to keep track of this so you know how much it costs your company to attract each new customer and how profitable your current strategies are.
CAC refers to the resources and cost of acquiring a new customer and helps measure the return on investment in your efforts to expand your customer base.
To calculate this metric, add up all the costs associated with converting leads to customers and divide by the number of customers acquired.
You may also want to track how long it takes your business to recoup the CAC spent on attracting a new customer. To do this, take the cost of attracting a customer and divide it by the margin-adjusted revenue per month for the average new customer.
Return On Advertising Spent (ROAS)
ROAS is the amount of revenue generated for every dollar spent on advertising. If you want to know how effective your digital advertising campaigns are, this is the best metric to look at.
To calculate this metric, divide the revenue generated from an ad campaign by the cost of the campaign.
Monitor this to determine how effectively your ads are generating clicks, impressions, and revenue.
For example, you invest $100 in an ad campaign and generate $200 in revenue. Dividing $200 by $100 gives you a 2:1 ratio (200%).
This ratio is the average ROAS for a Google Ads campaign ($2 earned for every $1 spent), but can be as high as $8 for every $1 spent.
Return on Investment (ROI)
Your ROI is the ratio between your net income and your investment and is used to determine the effectiveness of your investment.
If your ROI is low, it means your business is losing money somewhere, and you need to find out why and adjust your strategies to keep your business profitable.
To calculate ROI, you need to constantly monitor the ratio of conversions to investment costs. If you want to see the exact formula, you can look up how to calculate your ROI here.
You can also look at the CLV to CAC ratio. If you notice that your acquisition cost is low and your lifetime value is high, that’s a very good indicator that things are working!
Customer lifetime value is how much a customer earns on average over a certain period of time, and customer acquisition is how much you need to spend to attract a new customer.
