Which Metrics Should You be Tracking in your Inbound Marketing - Part I
I have to admit I have a dangerously carefree attitude when it comes to inbound marketing metrics.
I’m of the opinion that you should only learn about metrics when you actually have something to track, which usually means that you’ve have put something out there. You have to measure, no doubt, but it all should happen after you’ve built something.
Learning about metrics and KPIs for the sake of learning it’s a colossal waste of time (… pursuit of knowledge aside of course!). What I mean is that in this case you are better off learning by doing!
But if you’ve ventured into the digital unknown and have sailed away, in other words, you have active campaigns running throughout multiple channels, or just a single one, then there are a few things you should know about which metrics you should be tracking.
But first, why should you track any kind of metrics?
“So these explorers are chopping away and making their way through a very thick jungle, the trees are so huge you can barely see the sky. Then the expedition leader tells his local guide to climb up the highest tree and take a look over the forest canopy and make sure they are heading the right way, North that is.
The guide does this, takes a look and comes back down and reports … -“yes Sir we are heading in the right direction … But … - But what? Says the Expedition leader agitated … - We are in the wrong Jungle Sir!”
Without a way to measure your strategy, you are blind to what’s working and what’s not, and most importantly - Why it is or is not.
Let me start with top down approach and what I consider “must track metrics” or business model indicators:
Lead Gen (generation) - Where and how are you generating, quantifying and nurturing qualified potential leads for your business? This is the reason for everything you do online and offline that directly affects your bottom line.
Percentage of leads converted (Are you closing?) - Once you realize you are in the “wrong jungle” then you’ll be in a lot of pain, but pain it is! You need to go after the right audience/leads. In other words you have to go after leads that are qualified, or else you are wasting your precious resources.
Cost per customer acquisition (CPA) - Basic right! - How much does it cost you to gain one new customer or client? And what is the lifetime value of that customer? If you tie this figure with an internal value to your biz over time, then you can figure out what you are spending per new customer and you can work on lowering that cost over time.
Average dollar transaction per customer ( Is it a business?) - If you know how much your acquisition cost is compared to the average dollar transaction per customer then you in essence roughly calculated ROI per new customer acquired. But there is a much more important knowledge bit to this data than just ROI.
It’s easier and less expensive to increase your revenue by selling to existing customers than to go out and acquire new ones. The not so old concept of “retention is the new acquisition” comes into play here, coupled with the by now almost culture driven business strategy of “flipping the funnel” (not an affiliate)… a topic of another post and a must read book for every business owner in the Planet.
If you create two parallel baselines, one for “cost / new customer” and one for “cost / existing customer” in terms of revenue streams you are in essence segmenting your marketing strategy. This allows you to not only control your costs more efficiently, but to create a much more solid foundation with your existing client base, which is what will give your business true longevity in the marketplace.
In the next part of this series we’ll get a bit more granular on the topic and cover closed loop analytics in more detail:
- How to measure your Blogging strategy (For Corporate and Kitchen table businesses)
- Paid search campaigns, PPC
- Social Media Campaigns
- Landing pages
- Email marketing campaigns
Until then, stay focused and nimble!
