There are metrics, and then there are metrics. It’s virtually impossible to run any sort of marketing campaign without needing to rely on at least one or two metrics both in the initial planning and final analysis stages. Metrics allow you to measure just how well a campaign is working across different channels, understand where budget is being well spent and highlight where changes in strategy are necessary.
These days, simply checking page views and click throughs isn’t enough. Whatever the size of your campaign, you will need to select a range of metrics that together, present a complete picture of your success.
If you’re lost in the minefield that is Google Analytics or struggling to wade through your AdWords campaign reports, it could be that you need to narrow your focus. Read on to find out which marketing metrics should actually matter to your business.
Customer Acquisition Cost (CAC)
The Customer Acquisition Cost refers to the total sales and marketing cost required to obtain a new customer. It can be worked out by adding up all of the advertising spend and then adding in related costs such as team salaries, any related commissions or bonuses for sales made and overheads within a specific time period. You will then need to divide this figure by the number of new customers acquired within that time frame.
Customer Acquisition Cost is important – if you aren’t sure how to use it or don’t know if your CAC is within an acceptable level, luxury brand marketing agencies such as Icing Digital can help you to determine whether too much revenue is being used to acquire new customers or not. If it is, internal processes may need to be looked at and changes can be made accordingly.
Marketing Percentage of CAC
To work out the value of this, you’ll need to take the marketing portion of your CAC Metric. This value is known as M-CAC, and then calculate it as a percentage of the overall CAC. A chance in M-CAC can often point to a company’s strategy or effectiveness shifting so it’s a useful metric to refer to in the medium and long terms. You should be able to use this metric to inform your marketing strategy and drive beneficial change. An increase in the percentage of CAC could mean that you are either spending too much money on marketing, sales costs are too low due to a quota being missed or there is an attempt to raise sales productivity by spending more on marketing.
Marketing – Originated Customer Percentage
Whether you’re used to working with luxury brand marketing agencies or run efforts via an in-house team, the percentage of customers acquired as a direct result of your marketing efforts is a critical metric. This percentage is calculated over a given period – a quarter is a useful time frame of reference – and tracks how many customers originated with a marketing-generated lead. This should be easy to track, especially if you’re using a CMS system.