Depending on the type of marketing you are doing and the assets you currently have, there are any number of metrics you could be monitoring day by day. These metrics may include email open rates, ad impressions, time spent on video, clicks, and more. And sure, those kinds of metrics have incredible value; I’m a big believer that almost all data points do. But value in data is not always equal, and if you’re interested in keeping an eye on your bottom line, these are the big deal metrics you should prioritize:
Marketing qualified leads (MQLs) captured: This refers to the number of people who’ve shown interest in your brand by interacting with your online properties - your website, your emails, your socials, or somewhere else - and given some indication that they’re interested in learning more. Most often, this means they filled out a form, opted into email, or requested additional information. This is your dream scenario - it’s someone raising their hand to hear from you. If your MLQ count is high, that’s a great start. Keep reading to make sure your healthy beginning sets you up for success further on down the funnel. On the other hand, if your MQL count is low, you’ve got to go back to campaign-level statistics. Something about your strategy isn’t capturing the attention of your target audience the way that it should.
Sales qualified leads (SQLs): While having a large number of MQLs captured is great, it’s only helpful for your sales team (and your bottom line) if a decent percentage of those leads seem likely to convert. MQLs are considered SQLs when the sales team determines they’re good - usually based on a set of established criteria or even “gut check” based on the sales’ team experience with successful and unsuccessful calls. If a high percentage of your MQLs are becoming SQLs, that’s great! Your marketing materials are reaching the right folks. If a large number of your MQLs are disqualified once they reach your sales team, it’s possible your efforts are reaching the wrong kind of folks. In this case, it might be time to revisit your content and the targeting strategy you use to distribute it.
Conversion rate: This measures the percentage of leads that become customers and it might be your most crucial metric of all. After all, if nobody ever buys anything from you, what’s the point of marketing at all? If you have a healthy conversion rate, congrats! You’re doing a lot of things right. It means you’re attracting the right people with your marketing strategy, your product is a good fit for them to invest in, and your sales team is doing a nice job of closing deals. If your conversion rate is less than desired, you’ll have to do some sleuthing to figure out which one of those efforts is falling short.
Lifetime Value (LTV) of a customer: Okay, your marketing campaigns worked and they attracted some leads. Your sales team said they were good, and they went on to convert to actual customers. Your job is done, right? Not yet! Calculating the lifetime value of your customer is your next important task. An LTV is an estimate of the total value of a converted customer based on their expected revenue and their anticipated lifespan. Obviously, you want this number to be high. The higher it is, the higher your return on every conversion - and all marketing efforts that came before it - will be. If your LTV is healthy, it means your expenditures to attract potential customers are nicely balanced with the return you get back when those work. If this number is low, it means your current model won’t be easily sustained. You may need to find ways to increase the revenue from each converted customer, improve the average duration they’re likely to stick around, or reduce the cost it takes to attract them in the first place. Most likely, you’d need to do a combination of the above.
Retention (or churn) rate: Last but not least, you should be paying attention to how long your average customer is sticking around. Simply put, keeping an existing customer is a lot more affordable than finding a new one. In fact, acquiring a new customer can cost 5x more than keeping an existing one, and increasing customer retention by just 5% can increase profits up to 95%*. If your retention rate is healthy, congrats! Your funnel is working and you can focus on getting more leads into it. If customers are churning out faster than they’re coming in, you’ve got what’s called a leaky bucket, and you’ll have to find out what’s going wrong. Investigating the customer experience is usually a good place to start - it could be that there’s friction with the product, with payment, or a common pain point you could easily resolve. Whatever it may be, it’s definitely worth investigating and resolving.
Is this an exhaustive list of every marketing metric that should matter to you? Definitely not. But if you’ve got a pulse on these five, you’ve got the birdseye view you need to understand how your marketing funnel is performing, provide meaningful updates to stakeholders, and troubleshoot anywhere the funnel might be going wrong.
Need some help mapping out your important marketing metrics, or building campaigns that are sure to make those metrics soar? Reach out any time. We’re always happy to chat.
*Source: OutboundEngine, https://www.outboundengine.com/blog/customer-retention-marketing-vs-customer-acquisition-marketing/