When it comes to the art of selling, we all know that the prominent trend for the last decade has been such – it’s less and less about the product you’re advertising, and more and more about “how” you’re advertising it. And the “how” in this process is your marketing, or how efficiently or non-efficiently it’s working.
Having an effective marketing strategy is a dividing point between stagnating brands and those who are succeeding. So when you do allocate your budget towards increasing your sales in the form of various online marketing activities, how do you make sure it’s being efficient?
Step 1: Set up your tools
To know how we progressed since implementing a certain marketing campaign or a feature, we first need to find the starting point before that feature was implemented. The easiest way to do so is by setting up a free Google Analytics account, or when you have one – making sure it is set up the right way, which you can do by using our free 7 step guide here.
Google Analytics allows you to collect and monitor data from multiple websites of yours, giving the overall and individual overview on the progress of each blog or an online store. Another perk of a properly setup Google Analytics account is an ability to connect it with a large number of other digital marketing tools available on the market, which we, as a marketing agency, would be happy to assist you with.
Step 2: Track Universal metrics
Let’s get this out of the way – different businesses require different tracking. But there are a number of universal metrics that are crucial for every business and require your close attention regardless of the type of the product or service you are selling. Here we will review them in a close light and explain why these digital marketing metrics are important for your business.
As with any business structure in existence, the main agenda and the end goal behind every marketing activity is to bring revenue. The more the better. And even though there’s a number of marketing metrics which are hard to measure and count, for example, increased brand awareness, or enhanced brand loyalty, with each year we, marketers, find ways to measure even those. The only way to measure customer satisfaction a couple of years ago was to ask your in-store customers on the spot, or perform follow-up calls asking for feedback from the customers who’ve used your services. Now, all we have to do is send a graph with a thank you email, which allows our customers to choose the relatable feeling from images with an “unsatisfied” grimace to “completely satisfied” with a huge smile on its emoji face.
The most convenient and universal way to measure marketing effectiveness is to find our ROMI metric. ROMI, or return on marketing investment, is a marketing efficiency metric, that combines all of the efforts, i.e money, we’ve allocated towards a certain marketing strategy, and finds out how much sales, again in monetary value, we’ve completed thanks to performing this digital marketing activity. Divide your total sales number by your total digital marketing campaign cost, and Voila – you have your Return On Marketing Investment number.
The positive ROMI number showcases an effective online marketing strategy, while a negative number pinpoints to marketing strategies that ask for an adjustment. Now you can estimate and compare which marketing strategy plans show to be profitable and which are not, and should be further discontinued.
CPA & COCA
The marketing industry is famous for being a huge acronym-generating machine, especially when it comes to the letter C: CRM, CTA, CMS, CPC, C2C, among which is also CPA. CPA stands for Cost per acquisition, which is a marketing efficiency metric that measures the total amount of money it takes to take a completely unaware of your brand person, and turn him or her into your customer. Measuring this metric allows you to change and adjust your digital marketing strategy, since the same CPA of $122 dollars can work wonders when you sell high-end winter jackets for $1,100 dollars, and will make a business go bankrupt if it’s selling $80 pack of life-long razors.
Now COCA is a cultivated plant from the Erythroxylaceae family, or another digital marketing metric called Cost of Customer Acquisition, or COCA for short. It’s exactly the same as CPA metric, described above (so don’t get confused when you hear them both), and is calculated using a simple formula: the total amount of money spend on a given digital marketing activity divided by the number of customers acquired thanks to this activity alone.
CPL, or Cost per lead, is a marketing efficiency metric similar to those described above, but yet very different. Cost per lead calculates the number of dollars it took to bring a potential client to your website that might in the future become your customer, i.e lead. The logic here is this: the more leads for the lower cost – the better.
To accomplish this divide your CPLs by the sources, and only leave those that make sense for your effective digital marketing strategy. For example, if your Facebook advertisement costs you $4,3 per lead, while Google analytics is $15,6 CPL, you might want to rethink your marketing strategy plan and redistribute your costs among profitable sources accordingly.
To count your Cost per lead take the total amount of money you’ve spent on a given campaign and divide it by the total number of leads it brought you.
MQL & SQL
Now, these two metrics are different from those we’ve talked about earlier, but crucial for the success of every business nonetheless. Marketing Qualified Leads are the visitors which are more likely to become the customers than the rest of the leads. MQL become such through showing the interest towards your content or a product – they sign up for a newsletter, place an item in a shopping cart, watch a product video, share company news or an article, etc.
SQL – Sales Qualified Leads, are those leads who are one step away from becoming your official customer. For most businesses, Sales Qualified Leads become so after requesting a free demo, getting a free trial or subscription, leaving the message asking to contact a representative, etc.
Step 3: Track goal-specific metrics
Now that we’ve measured metrics universal for every business, we can carry on with gathering a more specific set of data. Another important step in making sure your marketing is working efficiently is measuring your indicators against concrete goals. Different marketing objectives will have different KPIs, metrics and statistics to watch out for.
1) Lead Generation
Lead generation is a process of targeting potential customers and forwarding them towards your product. Your lead generation number allows you to estimate how much website visitors or giveaway participants you can expect. The individual marketing efficiency metrics for a lead generation usually includes looking at the number of form completions, trial signups, demo requests, website visitors etc.
2) Brand Awareness
All inbound marketing activities are meant to persuade and reach one common goal – expanding your brand awareness. Brand awareness is a digital marketing metric that assesses how much the public is aware of your brand. To measure its marketing effectiveness look into the number of brand mentions, organic searches, social media followers, etc.
If you are looking to increase engagement with your brand, products, your digital marketing campaigns etc. To measure your customers’ and visitors’ engagement check out such digital marketing activity metrics as the number of returning visitors, the time-on-page spent, the number of likes & reposts in social media for a certain announcement, the number of contest participants etc.
Step 4: Track industry-specific metrics
Now that we divided our metrics by goals, it’s crucial to divide our metrics by our industry, as each type of online marketing business will have its specific metrics to track, note, and monitor.
For example, for ecommerce companies the most important metrics they should focus on are:
- Purchases per year
- Average shopping cart size
- Revenue per customer
- Top search terms
- Top keywords driving traffic to the site
- Effectiveness of recommendation engines
- Mailing list effectiveness
- Abandonment rate etc.
When SaaS, or Software as a Service company, should track and additionally focus on the following metrics:
- Uptime and reliability
Now using these 4 steps described in this article, it’s easy to measure marketing effectiveness of individual campaigns, determine the overall profitability of a developed digital marketing strategy, and make sure your marketing is working efficiently.