What are the right measurable marketing metrics to focus on that deliver revenue-generating results?
The concept of performance marketing points to a different focus from traditional marketing agencies, where “likes” and “shares” are the order of the day. With performance marketing, qualified leads and customer acquisition metrics help define the actual outcome of your marketing activities — not the marketing itself.
Are you looking at impressions for an ad or video?
How much website traffic did a blog earn?
These are traditional KPIs.
Did you ever stop to consider it’s possible none have measured the sales that resulted from all this marketing activity? Try performance marketing.
These measures include sales revenue and growth, cost per lead, conversion rate, lifetime value of a customer, return on marketing spend, and more.
With advanced tracking mechanisms, marketers can now target their marketing more effectively by accelerating activities, which are proving more valuable.
Why Measurable Results Matter In Performance Marketing
Today’s marketers have to be flexible and ready to shift at a moment’s notice. This means constantly monitoring customer-centric metrics, which can drive real change through an organization’s marketing efforts.
When you work with a performance marketing agency like Valve+Meter, you get a new strategy and direction where tests are deployed to find the most repeatable and scalable opportunities.
The end marketing goals are to grow programs to a point when the agency generally only receives payment when a specific action has been completed, such as a lead, click, or sale.
This allows the agency greater freedom to try tactics slightly outside your comfort zone, knowing you can shift quickly if the desired results are not there.
Here are 13 metrics your marketing team, internal or external, should start reporting on:
The Metrics That Define Growth
Measuring marketing activities against the sales they generate can be painful for some marketers. You will likely find that only a tiny percentage of your marketing campaigns drive most of your sales and leads — online or offline. However, this KPI is critical for the long-term health of your organization and is essential to weed out underperforming marketing activities.
Strategic plans require a strong understanding of sales growth and trajectory, from inventory requirements to adequate staffing levels. Measuring your marketing through the lens of your sales growth is yet another way to add a layer of accountability for marketers and marketing agencies.
Keeping the top of your sales funnel well-stocked with qualified leads is one of the first tenets of successful performance marketing. When your sales funnel is well-defined, having a solid pipeline of leaders helps your organization stay healthy.
Cost Per Lead (CPL)
One of the key metrics to determine campaign success is identifying your cost per lead. Some marketers believe every tactic can be successful if you throw enough money at it. Avoid this mindset by actively measuring the CPL and ensuring underperforming marketing channels are pruned or revised. This helps keep the overall CPL aligned with expectations and what the business can bear.
Low-value customer acquisition is customers who make a minimum purchase, don’t return, and may even tell friends and family about a bad experience. Focusing on netting high-value customers makes you more likely to focus activities around nurturing and improving the overall customer journey — which is innovative marketing.
Lifetime Value (LTV)
Like customer value, a key metric to review your marketing program’s effectiveness is your customers’ lifetime value. If your average customer lifetime value drops, some of your marketing and sales program fails to engage customers and show them constant value.
Return on Marketing Spend (ROMS)
What is the accurate return on your new marketing investment? First, take your total revenue divided by your total marketing investment and get your return on marketing investment. Keeping this KPI in mind helps marketers focus on expanding the most profitable activities and reduce those which drain resources.
Return on Advertising Spend (ROAS)
Marketers have a longtime love/hate relationship with advertising. Many marketers believe traditional advertising drives brand awareness and ongoing interest in your products or services. Other marketers need help finding a conversion rate and quantifying those activities back to hard sales dollars. Create a digital sales funnel with marketing metrics that track each step of the purchasing journey. It allows you to track the return on your advertising dollars more closely.
How many sales are you closing for the number of leads generated? Marketers look at new customer metrics to determine if there’s a problem with a particular step of the sales journey. Valve+Meter can help you review each step carefully to smooth out any roadblocks to obtaining new customers or friction points to maximize the benefit you receive from your marketing dollars.
Traffic, Leads, and Conversion Rates
Looking at website traffic, leads, and conversion rates by platform and/or web page allows for microtargeting of friction points. You can more accurately dial your tactics on segmented website visitors and SEO and complete A/B testing on specific CTAs and website architecture.
Marketing Cost per Acquisition (MCPA)
Depending on your business model, you may need to measure the cost per conversion or acquisition to get an accurate picture of the value of your marketing activities. Determine whether you want to use first-touch, last-touch, linear, or decay attribution models.
Click-through Rate (CTR)
In the Pay-Per-Click (PPC) world, CTR is a crucial measure of how compelling your ads are. It represents the percentage of viewers who clicked on your ad after seeing it. A high CTR can be an indication that your ad message resonates with the audience and is enticing enough to make them want to learn more.
Cost per Click (CPC)
CPC tells you how much you pay each time someone clicks on your PPC ad. This metric is essential for understanding the financial efficiency of your PPC campaigns. The goal is to have a low CPC while maintaining effective ad performance, which means you’re reaching potential customers without breaking the bank.
Sales Team Response Time
Even though this number solely rests in the hands of your sales team, it’s still one of the most critical conversion rate metrics. If your sales team cannot quickly jump on leads delivered through your marketing efforts, it’s essential to know why. A flawless lead delivery system works together to open the floodgates to more leads when needed and tightens the yoke when the sales team cannot follow up promptly.
Website Conversion Rate
This measures the percentage of website visitors who complete a desired action, like purchasing or filling out a form. Higher conversion rates usually indicate a better user experience and more effective marketing.
This ratio compares marketing-qualified leads (those likely to become customers) to sales-qualified leads (those ready to purchase). It helps you understand the effectiveness of your lead qualification process.
Email Marketing Performance
Email marketing campaigns are complex, including delivery rates, unsubscribes, open rates, click-through rates, final conversions, and social media actions such as forwards or shares. Looking at these numbers over time allows you to get the averages you expect for your business to identify outliers in either direction. Negative outliers should be scanned just as carefully as those with positive results.
Focus on Key Metrics to Maximize ROI
When you consider this range of marketing activities as a whole, it may seem overwhelming.
Nothing says you have to implement each of these marketing metrics immediately. Still, it does provide you with a working list of metrics to make smarter decisions to lower costs and, with the ultimate goal, help grow your business.
The best part of performance marketing is you can analyze each step of your marketing and customer journey and quickly change, scale, or scrap tactics based on their true business impact.
When you provide your team with access to these actionable, it becomes more feasible to shift tactics in a structured and meaningful way.
Marketing is continually changing and evolving, and the team of marketing experts at Valve+Meter Performance Marketing understands how to leverage marketing strategies to drive true business value.
Our data-driven marketing plans give our business partners the flexibility they need to quickly adapt to changing customer needs and market conditions. Ready to start focusing on the data that matters? Request a free marketing analysis from our team of experts today.