Most small businesses don’t track any form of metrics.
If they do track the only metrics they track are the cost and the profit.
There are many crucial things that are happening in between the cost and the profit that you may want to pay attention to.
It’s practically impossible to determine how well your business is doing if business metrics aren’t monitored.
The owner of the business will inevitably experience a lot of stress as a result. Any organisation that is professionally run monitors its metrics. These metrics include things like your sales, leads generated, phone calls made, and website visitors. Marketing metrics gauge the success of marketing campaigns and demonstrate how closely they follow key performance indicators (KPIs).
Without them, marketing teams wouldn’t be able to determine whether their marketing strategy is effective.
They are one of the most crucial components of any campaign. Marketing metrics are a quantifiable way to monitor performance and a crucial tool for measuring the success of marketing campaigns. The most effective marketing metrics vary significantly from campaign to campaign, but in general they track how your campaign affects audience behaviour.
The importance of measuring metrics
- You can use metrics to support your marketing budget:
Marketing metrics can aid in determining the marketing channels and activities that, based on past performance, deserve more or less spending when creating budgets. When it’s time to justify a budget increase and quantify marketing contributions to the organisation as a whole, this information can be given to executives and stakeholders.
- Marketing metrics provide key customer insights:
Marketing metrics can give you important information about your potential customers, their habits and behaviours, the right channels to contact them with, and the messaging that works best to convert them into paying customers.
- Metrics can give you valuable data:
Without marketing metrics, your marketing department would need to rely on anecdotal evidence to make marketing decisions. By tracking the right data, marketers can instead use metrics and analytics to inform marketing decisions more effectively.
- Metrics can show success:
Marketing can be slightly unpredictable, but rather than relying on trial and error to demonstrate success, marketers can use metrics to show whether a marketing campaign has been successful or not.
Key Metrics in a marketing strategy
Impressions — Impressions is the number of people who have an advertisement. In social media terms it can be defined as the number of people who have seen your post even if they didn’t click or engage with it. Impressions are important because they provide a simple representation of how many people are seeing ads within a particular channel. CTR (Click Through Rate) — CTR is the number of clicks your ad receives divided by the number of times it is shown. The number of times your ad is shown is also called the Impressions so the formula for calculating the CTR is the number of clicks divided by the impressions. The CTR is important because it helps you understand your customers by telling you what works and what does not work when working with a certain target audience. A low CTR means you’re targeting the wrong audience or that your ad is not persuasive enough.
Average cost per click — This measures how much it costs for your ad to get one click. In other words it is the amount of money you pay when a consumer clicks on your ad. Cost per click is important because it measures how much your ad campaign will cost you.
Cost per lead —This represents the amount of money spent to get one lead. What is a lead? A lead is an individual who has shown interest in buying your product. In other words that individual is a potential customer. To calculate cost per lead you divide the total money spent on the campaign by the number of leads generated by that campaign.
Cost per acquisition —This measures how much it costs to have a potential customer pay for a service. In other words it measures how much it costs to have a lead mature into a customer. To measure cost per acquisition you divide the total amount spent on the ad campaign by the total number of acquisitions.
Average order value (AOV)- This metric tracks how much people are spending for a company’s products or services. The AOV is important because the more each transaction is worth the more profit a company makes.
Leslie Mupeti is a brand strategist and creative innovator. He can be reached for feedback on [email protected] or +263 785 324 230. His Twitter and Facebook is @lesmupeti.