Almost everyone dedicates some level of resources to marketing. But if you’re not measuring the impact of your efforts, you may well be wasting money. Not knowing that information means you really can’t improve.
So we asked 14 entrepreneurs from YEC what they felt were the most important marketing metrics for startups to monitor, and why. Their valuable answers are below.
Not exactly a metric, but Google Analytics lets you analyze the journeys that customers take on your site. Brands obsess over things like bounce rates and visit times, but rarely look at which pages are the bounciest. This can really help drill down on your weak spots and also give you insight into how customers actually interface with your site.
Marketing is often concerned with increasing the very top of the funnel through activities such as advertising, content, and promotion. But it’s also critical to keep the conversion metrics in mind. Conversion metrics are one of the best ways to assess marketing spend and see if marketing activities are worth the effort, so make sure to drive to the conversion metrics by tracking them closely.
Customer Acquisition Cost
I think a lot of businesses properly track the cost to make a conversion, but fewer properly track the cost to acquire a customer (CAC). CAC is critical, and comparing this value to the long-term value (LTV) of a customer is a rudimentary way to find out whether or not your business will make it. If what you spend to acquire a customer is greater than your LTV, you’re in trouble.
Social Media Mentions
You should track social media mentions. If you have a lot of mentions from fans on a topic that has gotten you results in your business, you can figure out what sources you should be focusing your time and money on.
Early-stage companies often focus most of their attention on user acquisition. However, customer retention is often neglected. How often are customers using your product, and how long do they stick around? Ultimately, companies with high retention can spend more on acquisition and achieve long-term growth, so it’s important to focus on this as soon as you can.
When you are thinking of marketing or assessing an ongoing campaign, you need to be profiting. If you look at the breakeven when you start the marketing campaign, you can assess if the idea is reasonable and a goal that can be surpassed. It’s easy to not look at this closely enough, and it’s important to check and make sure it didn’t change once implemented. Tracking this number can keep you focused on success.
Return On Ad Spend
Whether you have marketers in-house or you outsource marketing efforts to a firm, require them to calculate how each dollar spent is generating a return. This figure will go a long way towards helping you decide where your marketing budget should be spent.
– Justin Boggs, OfferSavvy
Your click-through rate (CTR) is a huge metric that should constantly be looked at as a marketing metric. By having a high CTR, your marketing costs go down — that goes for most major advertising platforms such as Google Adwords and Facebook. Also, it tells you what ad is performing best, which helps you determine what ad to stick with as the most effective marketing message to customers.
If you’re just looking at new user or total user/client numbers, you are only getting a small part of the story. Cohort analysis allows you to dig deeper. Understanding what people are doing or what their lifetime value is based on when they became a user is incredibly important to understand how your product/business’ features are serving users and how well you’re actually growing your business.
– Jack Hanlon, Kinetic Social
Lifetime value (LTV) is the metric that explains the monetary value a new customer brings to the business. A fraction of the LTV is what a startup would be willing to spend to acquire a new customer profitably. Many will take the first few months’ LTV of a new customer and allocate that fully to acquisition. In a competitive marketing landscape, knowing this metric can make a big difference.
Average Order Value
In Economics 101, we learn that one of the surefire ways to grow your business is to get new and existing customers to buy more. I agree 100 percent. You must obsess about the size of your average order value (AOV) and always be on the lookout to add upsells by automatically suggesting additional products and offering additional services such as gift wrapping, personalization, and faster shipping.
Time on site is now an outdated metric. Active attention minutes more accurately assess user engagement with your content, landing pages, and website. This allows publishers to sell premium ad space, businesses to capitalize on higher quality leads, and brands to truly educate customers.
Every startup should look at profit — by customer, by vertical, etc. Segment your profit from your marketing. Lots of startups spend way too much time trying to squeeze water from a stone without fully understanding the bottom line. When startup leaders understand their highest yields, they can scale them by appropriately allocating resources instead of putting good money after bad.
Email Open Rate
Email marketing is still the most direct route to your prospects. Many marketers obsess about the total size of their list without stopping to check how many of those people are actually reading their emails. If your emails aren’t getting opened, you’ve wasted your time writing them. Pay close attention to your email open rate and test different subject lines to maximize your reach.
– Laura Roeder, MeetEdgar.com
Featured Image: Chukcha via Shutterstock