There is no such thing as “set it and forget it” when it comes to marketing.
If you are hoping to grow your business through your marketing efforts, you must do more than just post messages, have a website, or send emails and then hope for success.
To be successful in marketing, you must be engaged with how your marketing is connecting with your target audience. You must understand what forms of marketing content are getting the most engagement and what marketing channels are generating the most leads.
In short, you must go back and review the performance of your marketing efforts so you can understand what is working, what is not working, and where you can improve.
So where do you get started?
When it comes to data, there is no shortage of information that comes from your website, email marketing, and social media platforms. Rather than tell you that everything is important, let’s identify which KPIs, or key performance indicators, will be most useful as you look to gain a deeper understanding of your marketing performance.
Lifetime Value of Customers
This first data point is not really a KPI, but it is something that you should know. The lifetime value, or LTV, of a customer is exactly as it sounds. LTV measures how much money the average customer will spend in their lifetime with a company. An easy example of this would be a car dealership. Let’s say the average customer purchases 2.5 cars in their lifetime
To keep the example simple, let’s say the average car costs $20,000. That means the average LTV for this car dealership is $50,000.
It is important to note two things:
- LTV measures how much money a new customer will bring in over their lifetime. It is important to remember that this can mean several purchases over many years.
- The larger the base cost for a product or service usually means you will sell less in volume compared to a less expensive product or service.
LTV is an important number to know because understanding how much each new customer is worth helps you know how much you can spend to acquire a new customer.
Customer Acquisition Cost
The cost to acquire a new customer is referred to as customer acquisition cost, or CAC. As the name would imply CAC measures how much money you spend to get new customers. This number goes well with LTV. The more money a customer is worth, the more money you can spend acquiring that customer.
Going back to the example of the car dealership, because each new customer is worth $50, 000 over their lifetime, a dealership might be willing to spend more on advertising to get new customers.
Being able to compare your CAC to your LTV will help you understand if you are spending your marketing dollars wisely. Remember that CAC may encompass more than just marketing. Consider everything that you put into acquiring new customers to factor your CAC.
Website Visitors and Traffic Patterns
Websites can be a rich source of data that can tell you how well your messaging is resonating with your target audience.
When looking at how well your website is performing, you want to understand where traffic is coming from and what are people doing when they get to your site.
Understanding how people are getting to your site will help you understand how your other marketing channels are performing. Are you getting a lot of traffic from Facebook? Are people clicking on links that you put in your email marketing? Or maybe your SEO is kicking in and sending traffic.
Once visitors are getting to your site, you want to understand what they are doing once there. Do you have a high bounce rate? Are people spending time on the homepage, but not going anywhere else? Are people reading your blogs, but not clicking on your calls to action?
These are questions that you can answer by looking at the reports that just about every website is capable of providing. Knowing this information will help you know where you can improve your website.
Social Media Stats
As with websites, there is a lot of data when it comes to social media. To prevent yourself from becoming overwhelmed, we suggest that you focus on the numbers that pertain to engagement.
These are people clicking through on your posts, commenting on something you shared, or them sharing a post to their audience. These stats will help you understand how your messaging is resonating with your audience. Are you moving them to the point where they take action? Or do you need more work in order to motivate your audience?
We are going to cheat a little bit and go really broad with this last KPI. The entire reason you are marketing your business is to create awareness, educate your audience, and then get them to purchase your products or services. The ultimate way to evaluate your effectiveness is to look at conversions
So as you review your marketing efforts, think of all the ways you ask your audience to take action. Then look to see if the desired action was ultimately taken. For instance if you promote an ebook via email you would want to look at how many people opened the email, how many people clicked to view the ebook, and then how many people actually downloaded the ebook.
Each of those opportunities for conversions will help you understand how effective your messaging is in getting people to take action. If you notice that conversion rates dip at any point, you can go back and correct the messaging.
By taking the time to review your marketing efforts, you are taking steps to become a more effective and efficient marketer.Reviewing your analytics does not have to be an everyday or weekly activity, but something that should be done at least every six to eight weeks. This time frame will give time for any current marketing initiatives to take effect while not letting poor marketing performance last too long. Over time you will see an improvement in how you promote your business and how your audience responds to your messaging.