Marketing is a crucial part of any business, and it's essential to have a strategy that is measurable and effective. In today's digital age, businesses have access to a wealth of data that can help them make informed decisions about their marketing efforts — but, data on its own isn’t enough anymore. Quality matters, and using your data to ensure quality over quantity is what can set your inbound marketing strategy apart from competitors. Let’s discuss five essential marketing metrics to track this year and how they can help you measure your inbound marketing efforts.
- Website Traffic
- Conversion Rate
- Cost Per Acquisition (CPA)
- Customer Lifetime Value (CLV)
- Social Media Engagement
The first metric to track is website traffic. Your website is the foundation of your digital marketing strategy, and it's essential to know how many people are visiting your site. By tracking your website traffic, you can see how effective your marketing efforts are in driving traffic to your site. Google Analytics is a well-known tool that can help you track your website traffic. It can show you how many people are visiting your site, how long they are staying, and which pages they are visiting.
Paying attention to these metrics ensure you’re providing and optimizing content that prospects respond to most. You want to attract visitors who are likely to become customers. So, it's essential to analyze your traffic sources and see where your most valuable traffic comes from. Are your visitors coming from social media, search engines, or referral sources? By identifying your most valuable traffic sources, you can focus your marketing efforts on those channels.
The second key metric is conversion rate. A conversion is any action that you want your visitors to take on your website, such as filling out a form, making a purchase, or subscribing to your newsletter. Tracking this metric gives you insight into how effective your website is in converting visitors into customers.
Much like website traffic, you can use Google Analytics to track conversion rates, which can help you set up conversion tracking for your website. An additional upside to this is that Google Analytics can be integrated into your preferred CRM, like HubSpot. Analyzing conversion rates help identify areas where your website may be underperforming and identifies areas of improvement.
Cost Per Acquisition (CPA)
Cost per acquisition (CPA) is the third metric to take into consideration while analyzing your inbound marketing strategy. CPA is the amount of money you spend on marketing to acquire one new customer. Monitoring your cost per acquisition lets you see how much you are spending on marketing and how effective your marketing efforts are in generating new customers.
To calculate your CPA, you need to divide the total cost of your marketing campaign by the number of new customers acquired. For example, if you spent $1,000 on a marketing campaign that generated ten new customers, your CPA would be $100.
Getting the most bang for your buck typically revolves around focusing on improving your conversion rate, targeting your most valuable traffic sources, and optimizing your marketing campaigns to reach your target audience more effectively.
Customer Lifetime Value (CLV)
The fourth metric to track is the customer lifetime value (CLV). CLV is the total amount of money a customer is expected to spend on your products or services over their lifetime as a customer. It’s important to evaluate how valuable each customer is to your business and how much you can afford to spend on acquiring new customers.
Calculating your customer's lifetime value is a fairly simple process. You can do this by multiplying the average purchase value by the average number of purchases per customer and the average customer lifespan. For example, if the average purchase value is $50, the average number of purchases per customer is 3, and the average customer lifespan is 2 years, the CLV would be $300.
By increasing your CLV, you can increase the profitability of your business and have more resources to invest in your marketing efforts.
Social Media Engagement
The final metric I want to highlight is social media engagement. Social media is an essential part of any inbound marketing strategy, and it's important to track your social media engagement to see how effectively you connect with your audience. Social media engagement includes likes, comments, shares, and followers, and it's a key indicator of how interested your audience is in your brand.
Tools such as Hootsuite or Sprout Social are great for tracking these metrics — they help you monitor your social media interactions and easily showcase which posts receive the most engagement. This data lets you identify which types of content resonate with your audience and make data-driven decisions on how to adjust your social media strategy accordingly.
Social media engagement is a key piece to any business puzzle and should be used in conjunction with other metrics, like the ones previously mentioned, to measure the effectiveness of your inbound marketing strategy.
Paying close attention to these marketing metrics is essential to the success of your inbound marketing strategy. By focusing on website traffic, conversion rate, cost per acquisition, customer lifetime value, and social media engagement - you can make data-driven decisions that help engage your prospects and, thus, generate quality leads and produce lifelong customers. Remember, it's better to have a smaller number of high-quality leads and customers than a large number of low-quality leads and customers. This will help you stay ahead of the competition and achieve your marketing goals in 2023 and beyond.