We all realize the necessity of a good web presence for business. Whether you are running an organic campaign or paying for traffic you need to measure your results if you want to be successful. If you don’t know your metrics, you will waste money and potentially hurt your business. This is true whether your advertising is done online or traditionally. As a business owner it is difficult to find the time. The following list is a good place to start, and many of the marketing metrics can be applied to digital or traditional advertising.
The traffic that comes to your website tells you a lot about your marketing efforts. You are able to see what pages are attracting the most visitors from organic search, where referral traffic is originating from, and what path visitors are taking when they navigate throughout your website.
Looking at your total traffic numbers without closer examination can give you a false sense of success. It’s important that you really dissect your traffic to understand where your potential to scale can be found and what areas need improvement. Traffic to your site is not worth much if it does not translate into sales, so follow each source of traffic and month to month changes.
Referral Traffic Source
Understanding where your traffic is coming from is the first step to identifying your most profitable marketing channels to focus your time and energy on. Google Analytics(GA) will track your referral source traffic and much more. It is a free service. If you have a website, you should have Google Analytics. You will want to cut referral sources that produce few conversions and put those resources into referral sources that produce sales.
New Visitors vs Returning Visitors
The percentage of new traffic compared to repeat visitors goes a long way in helping you create a website and user experience that delivers results. This is basic data you retrieve from Google Analytics. You need new visitors so that you can grow your business. Returning visitors indicate that your website provides value.
If your returning visitor percentage is low, you will need to focus on creating higher quality content that provides value. If your new visitor stats are disappointing, then focus on finding new marketing channels.
Average Session Duration
The time that your visitors spend on your website is a very good indication of the quality of traffic from specific referral sources. There are 3 areas of referral traffic you should examine.
- Organic Traffic: These are visitors that originate from an organic search. These are typically visitors that have a specific need they are trying to solve, and your website was offered as a top result for their initial search query. Organic search typically has some of the highest session duration. Short durations for organic traffic often mean you are targeting the wrong keywords and phrases.
- Direct Traffic: Direct visitors that are typing your website URL directly into their browsers. They know you exist, and they are specifically seeking out your website. These sessions are often short because they know exactly what they want and where to get it.
- Referral Traffic: You will want to break these down by referral source, and focus on scaling the efforts where the sessions are meaningful. For example, if your Facebook traffic is leaving your website after 10 seconds, but traffic from a specific blog is sticking around for several minutes you need to focus your marketing efforts on those valuable sessions that are more likely to result in a conversion.
Bounce rate is the percentage of traffic that leaves your website without clicking to an additional page. A person who visits your website and then leaves without clicking any navigational options or links on the current page they will be classified as a bounce. You want to decrease bounce rate. If the visitors to your site have real interest they will remain on site.
Bounce rate can be misleading, as someone can come to your site and spend several minutes reading a blog and then leave. That is an engaged viewer and a bounce. Consider establishing an adjusted bounce rate that factors in time on the page.
Cost Per Lead
Your cost per lead is going to vary significantly across different channels, so you need to really analyze this on a case-by-case basis, and not average it out. For example, you might be able to generate leads on Facebook for $5 each, but spend $15 on Google Ads per lead. Cost per leads will vary and you should have several lead sources to maintain a balance. When calculating cost per lead, factor in all of the costs such as marketing creative. Then, see how the leads convert.
Your conversion rates are one of the most important metrics for determining campaign profitability. There are many actions that can be classified as conversions and each business may see them differently. Some businesses will rely on phone calls, others form fills. Know your sales funnel and use that to establish your definition of a conversion.
You need to know your conversion cost in order to determine whether or not your ROI is acceptable. In order to lower your conversion cost you may need to tweak several areas of your sales funnel. From initial communication with a lead to the different touch-points, all the way to the final pitch. It doesn’t matter if you are physically calling each lead to close them or have an automated funnel in place — every step needs to be analyzed and optimized for the best results.
Customer LTV (Lifetime Value)
You must know your Customer Lifetime Value. This is a metric that can take some time to identify, but understanding it allows you to make intelligent long-term marketing decisions.
For example, you might discover that your average customer purchases $1,500 worth of product over the course of 18 months. While your initial cost per conversion might be $200 and the average initial purchase might only be $100, it makes sense to take the up-front hit. Over that customer lifecycle you are going to cover that initial loss by more than 10X in revenue.
ROI for Every Marketing Channel
Nothing you do in terms of marketing will be successful unless it delivers a positive ROI. Without a return on investment, you are wasting your time and money. A positive ROI signals that your efforts are working, and should be scaled, while a negative ROI signals that you need to make an adjustment quickly. Calculate your ROI for all of your marketing channels and look for ways to improve each one. This is a key marketing metric.
Why Marketing Metrics
The first step to optimization is measurement. Each of the marketing metrics you must measure discussed above guides a business as to what marketing is performing and what needs revision. Knowledge of marketing metrics will allow you to make improvements that will increase your bottom line.