Marketing has always added value, but it used to be hard to measure. Thanks to digital marketing and other advancements, its contributions are becoming crystal clear. The metrics related to it have become nearly as vital as sales numbers, and are often reported in the same meetings. In fact, in some companies you’ll find the head of marketing is now the head of revenue.
There are dozens of marketing metrics that can be included at your next standup, so which should you focus on? If you pick these six below, you’ll have most of your bases covered. Together, they offer a good overview and help you monitor what’s working and where you can improve.
Open rate: The metric of first impressions
The open rate measures how many people view or open an email. It’s often seen as a percentage and calculated by dividing the number of email messages opened by the total number of email messages sent. Marketing emails should aim for an open rate anywhere between 15% and 25%.
Most of the advice about increasing open rates comes down to having a good list and choosing an engaging subject line. There are more articles written about subject line creation than any other email writing topic. The gist is, write something interesting, keep it under six words, make sure the subject line relates to the content and try using an emoji every once in a while. People love emojis.
Click-through rate (CTR): Measuring the action taken
This is the percentage of customers who click the link(s) included in an email or an ad. This is ultimately one of the most important metrics because with digital ads the whole point is often to get people to engage with content or take an action. CTR varies wildly by industry, so it’s worth some research to come up with a suitable industry-specific benchmark. The average across all industries is around 3.42%.
A major cause of low CTR rates in emails is unrelated subject lines. If you open an email that’s offering “free puppies!” and it’s actually a pitch for some B2B product, the recipient will feel tricked and send you right to the spam folder.
Conversion rate: How close you are to the goal
Conversion rate is the percentage of visitors to a site or location who complete a desired action. Google recommends calculating it like this: Take the number of conversions and divide that by the number of total ad interactions that can be tracked to a conversion during the same time period. For example, if you had 50 conversions from 1,000 interactions, your conversion rate would be 5%, since 50 ÷ 1,000 = 5%.
Decent conversion rates fall between 2% and 4%. A high rate means your marketing and messaging are working. A low conversion rate means it’s time to go back to the drawing board. Ultimately, it’s going to take a bit of analysis to determine exactly what went wrong or well when you’re looking at conversion rates. It could be the messaging, the offer, or worst of all, the product.
Walk-Through Rate™: See your real customers
Like the click-through rate, Walk-Through Rate (WTR) measures the action taken following exposure to a marketing message. But WTR measures how many people visit an offline business after seeing an ad for that business.
This gives offline merchants the most accurate gauge of how well their marketing is working. What matters most to them is whether or not someone comes in and purchases something. All of the other metrics point to this, but this is the only one that reports on it specifically.
You can use data about walk-throughs to tune your marketing very precisely. For example, if you’ve targeted males between 18-25, but you see more at the 40-50 range walking in, you might think about focusing more on them, or reevaluating what will attract the younger group.
Customer acquisition cost (CAC): Looking at the bottom line
This one is pretty straightforward. It’s the amount of money you spend to acquire a new customer. If you spend $50,000 on marketing and you get 500 new customers, your CAC is $100.
Customer lifetime value (CLV): Not all customers are equal
This is the amount of money you’ll make from a single customer over the course of your business relationship with them. We think this one is so important, we wrote a whole guide about it.
To calculate CLV, you need to figure out how much your customers spend per visit, how frequently they visit and what the customer lifespan or churn rate is. Perhaps the simplest way to calculate CLV is to divide average spend/month/customer by the percentage of customers who do not return. For instance, if an average customer spends $50 per month, and 20% do not return each month, then CLV is $250.
There are a ton of different ways to figure out CLV. A pretty decent primer can also be found over at marketing guru Neil Patel’s site.
Putting it all together
These metrics will give you a good idea of where your marketing strategy is working hard, and where it’s not, by promoting accountability and offering trackable results. They can also guide copy and design decisions, helping to get your marketing materials razor sharp.