Never before have we had access to as much data as we do today. However, whether or not businesses, particularly startups, are using it to their advantage is the real question
Making the decision to start a new business is a massive undertaking, one where your days are filled with countless emails and a never-ending to-do list. But what many small business owners soon come to realize is that the devil’s in the details, and almost always too late.
It’s one thing to have a detailed and well-thought-out marketing plan, but that will only get you so far.
Why You Can't Just Wing It - The Importance of Marketing Metrics
Without a thorough understanding of whether your marketing campaigns and strategies are producing the desired results, you could end up spending thousands of dollars with no return, which can be particularly devastating as a startup.
By tracking a few key metrics, you are able to make more informed decisions as a business owner, allocate your resources more wisely, and ensure your budget is being used efficiently.
This is particularly important if you need to prove your marketing initiatives and spend to stakeholders in order to secure more budget for future campaigns.
Keeping an eye on the right marketing metrics will also give your team the information they need to adjust their strategies where necessary, further assisting with long-term business growth.
The Digital Marketing Metrics That Really Matter
To ensure the overwhelming stream of data that you have access to doesn’t deter you from using it to your advantage, here are some of the most essential digital marketing metrics you should focus on as a startup.
Customer Acquisition Cost
Customer acquisition cost, or CAC, represents the total amount of money your startup is spending on sales and marketing activities, divided by the total number of new customers you gain during a particular period of time. It’s what you’re spending to make money.
Along with advertising expenses, the total amount of money you spend on sales and marketing activities should also include the salaries and commissions paid to employees involved in marketing and sales.
By tracking how much you’re spending to acquire new customers versus how much money they’re spending with your business, you can decide whether the same activities would be worth your while in the long run.
CAC gives businesses the opportunity to scale back or adjust their sales and marketing strategies to minimize costs.
Customer acquisition cost is similar to customer lifetime value, which looks at how much you spent to attract and retain a customer versus the revenue you could potentially generate from that customer throughout their relationship with your business.
Marketing ROI
Tracking marketing ROI will highlight how much financial return is generated by your startup’s marketing efforts.
Calculating marketing ROI would require you to subtract the total cost of a marketing campaign from the total amount of revenue that was generated over the same period the campaign ran. Once you have this number, divide it by the total cost of the campaign and multiply by 100 to get a percentage, which will be your return on investment.
Marketing ROI is another critical digital marketing metric because it helps business owners determine the effectiveness of their campaigns, while also identifying optimization opportunities. This could mean spending more or less on specific channels or cutting out a particular channel altogether.
This is also an important metric for startups that need to prove their spend to stakeholders as a way to secure further investments.
Website Lead to Sales Qualified Lead (SQL) Conversion Rate
Website lead to sales qualified lead conversion rate showcases the percentage of website visitors that become leads you can sell to.
An SQL is different from a website lead. Where a website lead has simply indicated someone isinterested in a product or service via a website, an SQL has been identified as someone with a much higher likelihood of converting based on overall engagement with a site and other marketing materials.
To calculate an SQL conversion rate, you would divide the total number of website leads that become SQLs by the total number of website leads during a specific period. Multiply that number by 100 to get a percentage.
Tracking SQL is recommended because it indicates the effectiveness of your website in converting potential customers to leads. With this data, your marketing team is able to make design, copy, and user journey adjustments to increase your conversion rates. It can also assist with the optimization of lead generation strategies.
Startups with high SQL conversion rates are much more likely to generate a higher number of sales and better revenue levels.
Email Conversion Rate
Email is still not dead and if you aren’t currently taking advantage of your mailing lists, now is the time, and once you do, you’re going to need to track your email conversion rates.
Email conversion rates measure the percentage of recipients who take an action after receiving a campaign. This could be anything from downloading an eBook to filling out a form or making a purchase.
Calculating your email conversion rates is straightforward. Simply divide the total number of people who completed the necessary action by the total number of email recipients. Multiply this number by 100 to get a percentage.
This basic digital marketing metric will help you determine how effective your email campaigns are, ensuring your team can make the necessary adjustments. Some examples of the elements that might need to be changed to increase conversion rates include the content, subject line, call-to-action, and even the mailing lists you’re targeting.
Inbound Website Visitors & Traffic
No startup can afford to be without a website, but your website is only useful if you understand where your visitors are coming from.
Inbound website visitors refer to the number of people who land on your site via organic search, third-party sites, and social media. Basically, any platform where you aren’t running paid advertising. This is where your website content, social media strategy, and SEO efforts all become incredibly important.
High levels of inbound website visitors show that you’re attracting and engaging with as many potential customers as possible. Tracking this metric can help you identify which channels and tactics you should be focusing on and where your marketing strategy might still need some work.
Engaging with more people on social media, optimizing your keyword research, generating more backlinks, and improving the quality of your content are all aspects you can work on to drive this number up.
You want to create a site that appeals to search engines, but most importantly potential customers. Striking this balance will take your site traffic to new heights, helping you build brand awareness, generate more leads, and increase revenue.
Impression Share & Click-Through Rate
If you’re currently running or are planning to run paid advertising, impression share and click-through rate are another two metrics that needs to be on your radar.
Impression share highlights how often your ads are displayed when a potential customer performs a specific search or views content on a third-party site versus how often they could potentially be displayed. Click-through rate will tell you how many people your ad is appealing to, encouraging them to click through to a landing page.
To calculate impression share, divide the total number of impressions that your ads received over a period by the total number of impressions they were eligible to receive. Multiply that number by 100 to get a percentage.
For click-through rate, take the total number of times your ad was clicked and divide it by the total number of impressions before multiplying by 100.
A high impression share shows that your ads are reaching a large portion of your intended audience, with a low impression share indicating the opposite. A high click-through rate tells you whether your copy, imaging, and call-to-action are effective.
Having these metrics at your disposal can help you find new ways to increase your ad reach by optimizing your advertising strategy. This could mean improving your ad copy, adjusting your targeting, or changing up your bidding strategy, all of which could improve the effectiveness of your paid campaigns.
Organic vs Paid Reach
Any startup with an online presence should be measuring organic vs paid reach.
Organic reach refers to the number of people who are seeing and interacting with your social media, website, or any other content you’re currently distributing. Paid reach, on the other hand, is linked to your paid content efforts such as sponsored search results, promoted social media posts, and even display ads.
Both organic and paid content can be valuable but measuring organic vs paid reach can tell you where you should be placing more of your efforts. To get more value from organic content, it’s important to pay close attention to quality and relevance. Unfortunately, it’s becoming a lot harder to gain as much traction online when you just focus on organic reach.
With paid reach, you have a lot more control over your target audience as well as the frequency at which potential customers interact with your brand. Paid reach is also known to provide more immediate results, which can be critical when you are just starting out.
It should be noted, however, that because paid reach requires budget on an ongoing basis, it might not be sustainable to make this your only focus, particularly as a startup.
Because it’s best to strike a good balance between paid and organic reach, it really helps to keep this metric on your list of monthly measurements.
Brand Trust
Last on the list of essential digital marketing metrics is brand trust. It’s the metric that will showcase just how much confidence customers have in your business.
Brand trust is linked to consistency, quality, and good service over the long term. It’s important because these are the factors that affect consumer behavior and ultimately, your bottom line. In fact, countless consumers are even willing to pay more for a product or service if they trust a brand.
Understanding what customers value and what their pain points are is the first step in growing brand trust. From there, you can track this metric by asking for feedback on a regular basis. This could be through a survey, giveaway, or a simple phone call - the easier you can make it for people to give feedback, the better.
Tracking repeat purchases is another way to keep an eye on brand trust.
The Best Tools to Use to Measure Digital Marketing KPIs
Now that you have a better understanding of the marketing metrics you should focus on as a startup, let’s look at some of the best tools you can use to measure your key digital marketing performance indicators.
- Google Analytics. If you have a website, you need to link it to Google Analytics. Not only is it free to use, but it can supply you with a range of data that can help you optimize your website as well as your paid marketing efforts. This is a particularly good tool for tracking your website traffic as well as the source thereof.
- SEMrush. For startups that want to track their SEO, PPC, and social media efforts from one place, SEMrush comes highly recommended. It can take some time to get used to, which is why it helps to work with someone who has experience with the platform, but the capabilities are truly impressive. You can even use it to build more backlinks and improve your keyword research, both of which are great for organic growth.
- Hubspot. Not only can you build and manage your website from Hubspot, but the platform is also excellent for lead generation. The email marketing and social media engagement tools can help startups better manage and monitor their efforts, making optimization that much easier.
- Ahrefs. Another tool that’s often used by businesses of all sizes for SEO analysis and tracking is Ahrefs. There is a free version, but the paid version will provide you with more functionality and tracking capabilities. Monitor your competitors, analyze your backlinks, source new keywords, and more.
- Sprout Social. When you’re running a business, it’s not always easy to set time aside to manage your social media, where consistency is key. Sprout Social is one of the most used social media management tools, allowing you to schedule and boost posts and track engagement and conversations with ease.
- Crazy Egg. One last tool that is recommended for better understanding how visitors interact with your website is Crazy Egg. Using heat mapping and user behavior tracking, businesses can more easily make updates and adjustments to their websites that will make a real difference.
It’s not necessary to have all of these tools to effectively track your most important marketing metrics. Rather decide what your needs are and take it from there. You may also want to try out some of these tools before you commit to paying for them - very often the free version is enough.
In Closing
There’s no way that we can ignore the need to measure our marketing efforts as businesses, even more so if you are trying to get your business off the ground. The key is to start small, but not to hold off on collecting and utilizing essential data. What’s more, there are countless tools available to make this process even easier, which means there’s no excuse not to do it.
