How to Establish Marketing Metrics that Matter


Inbound marketing has given marketers the unprecedented ability to know and understand their consumers better than ever before. Today it’s possible to know where a lead comes from, exactly what prompted the conversion, what pages they visited, what information they sought out, and more. Data is everywhere that can help you to target your market and your message with pinpoint accuracy.

The problem lies in the amount of data available! Now more than ever you need to be measuring the right information to establish marketing metrics that matter. Marketing metrics should be established up front so that you can be collecting and reading pertinent data from day one. The issue is that often executives are relying on data that looks good, like total page views, but, in reality, tell you little about how your site is working.

Data Selection Criteria

There are three basic criteria for choosing marketing metrics that measure success. They are universal rules and apply across industries regardless of company size or time in the marketplace.

  1. Any metrics you establish should be easy to understand and use.

    Your marketing metrics needs to make sense to the people compiling the data and to those making decisions based on the data. If your metrics are too complex or convoluted they will not be useful. If different departments are looking at different data to justify decisions it can cause inconsistent behavior. For example, marketing feels their campaign is a success because they are driving large amounts of traffic (unique page views) while sales are not happy because conversions are low.

  2. Marketing metrics should be consistent.

    Data points should be consistent from month-to-month and quarter-to-quarter so comparable information can be reviewed. For example, purchase behavior is a difficult measure, especially if there are multiple data sources (for example online sales and brick and mortar sales). In many companies, point-of-sale data is not fully integrated with CRM and inbound marketing automation systems. This means data will be inconsistent from month-to-month and not actionable.

  3. Marketing metrics should deliver useful actionable information.

    Metrics should impact your business. Seeing whether a certain number is up or down from month-to-month can tell you something has changed. But it’s more important to be able to see how that change is connected to specific actions and buying behaviors. For example, customers who are active in your online product forums are not only more likely to buy your product, they’re also likely to spread the word and continue to engage with your efforts. This is useful information and a solid marketing metric that impacts your business.

Marketing Metrics To Watch

One common pitfall is measuring data that’s easy to track (like clicks on a web link). Just because a lot of the web and social media data is trackable doesn’t mean you should spend time with it. It’s often too broad and not useful for making actionable decisions.

Instead of gathering lots of “number data” like clicks, facebook likes, and twitter followers, look at the big picture. Tie your marketing campaigns and activities to big picture goals like increasing revenue through new customer acquisition, or growth in income per customer. A new “follower” won’t tell you much about their buying behavior, but a download or video view might. These are the metrics that will tell you if your marketing is working.

Here are a few key performance indicators to consider:

  1. Customer Acquisition Costs (CAC) – Compile all of your sales and marketing costs (including advertising, salaries, commissions, overhead etc) and divide this number by the number of new customers over a specific time period (month or quarter.) This number can help you to set sales quotas. If this number increases over time it may mean that your sales or marketing efforts are not efficient and require adjustment. This number is very industry specific and price point dependent.

  2. Time to Payback CAC – Take the CAC and divide the number by how much customers pay you each month on average. Higher payback time means it takes longer to recoup your marketing investment. Under 6 months could mean you are spending too little on marketing and sales, 9 to 18 months is reasonable. Over 18 months could indicate a problem.

  3. Marketing Originated Customer – Look at the number of customers generated in a specific period and examine their buying path. Were the leads originally driven by particular marketing efforts, or through organic search, or other channels?

Marketing metrics are not a one-size-fits-all. You need to clearly define your business goals in order to determine which metrics to watch. The bottom line is that you need to look beyond the obvious numbers and determine what is driving your customers to act and engage. Look at the big picture and you’ll grow your business.


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Topics: Analytics

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