by Susanna Gebauer (@dreckbaerfrau)
Measuring is key to marketing success.
It is the fine art of marketing. Without measuring what you are getting out of what you are doing, you are flying blind. Numbers are not only for bragging; they are the proof that what you are doing is taking you where you want to go (or that you are heading in the wrong direction) and whether your investment (time and/or money) is paying off or is a total waste.
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So, what is marketing success?
Before you go and set up some processes to measure your marketing results, buy tools and define target numbers ask yourself: How do you define “success”.
The numbers you measure or should measure can be totally different for different definitions of success – and different marketing activities.
As an example: You can have millions of visitors to your site but not one of them buys your product. If selling your product is your definition of success, the visitors to your site are only good for bragging but not paying your bills. On the other hand, can a handful of visitors be worth much more, if each of them buys your product.
The Success Ladder
Success can come in many forms, and usually, it develops over time – especially in marketing. The more your business (and marketing) grows, the more sophisticated your processes get and the goals and the numbers you should measure change with it.
If you are going to work with a newsletter, the first success is when people actually sign up for your newsletter. But you quickly need to move on to the next step on your success-ladder: Newsletter Open rates. If people open your newsletter – wow, get yourself a treat, and take the next step: Make people click the links in your newsletter. While a blogger who wants to get people to his newest blog post this might be the final step on the marketing success ladder. If you are going for selling your product: Move on to the next step.
This is a very good example of how different success-steps are linked to each other (or build upon each other). It rarely is the best way to start with only measuring the final success, because then you will have trouble figuring out where your marketing process is getting off track and failing.
What can be measured?
Depending on how you define success, you need to figure out different values to measure. Sometimes your current step on the success ladder might not be directly measurable – then you need to find a value that says something about your success – for instance: Good open rates on your newsletter give you some idea on how your newsletter content is perceived by your readers, but there is no actual numeric definition to define interesting.
Here is a list of numbers/factors I have measured in the past. This is not a comprehensive list of measurable values, but you should keep them in mind and some might be applicable for you. Note that which one you actually use and measure depends on your marketing process, the step on the marketing ladder you are currently on and how you define success. There are probably many more numbers you can measure and which make sense in many cases.
Building followers is one of the first steps if you are marketing with social media. If you do not have followers, no one is going to hear/see what you share and success is more than unlikely – at least success that comes from social media as a channel. Still, followers alone might not be the right number to measure success as untargeted followers will get you far less reaction than targeted.
Shares, Likes, Favourites, Tweets, …
Do you know these little numbers below (or beside) a blog post or on a landing page? They tell you how often this page has been shared (or liked) in social media (Facebook, Twitter, …). These shares are usually valuable, as it means that someone else is doing marketing for you with spreading the word about your page to his/her audience. These numbers will usually not represent your final definition of “success” as they only tell you the number of shares, but not how many people were reached or how many people this actually brought to your page.
If you are using Buffer for scheduling your social media posts, you might notice the interesting fact, that some Tweets are getting more retweets than clicks – so resharing without actually reading is quite common.
A post on social media gets really valuable if it spreads further than your own audience (followers), usually through reshares or retweets. The people reached with the original post plus the added audience through reshares, is usually called “reach”. If you share your post via Buffer, the analytics within buffer tell you how many people your post theoretically might have reached including your own following and the following of the retweeting accounts.
If you are building an Email-List, especially if you are running a list building campaign, the first and important number to watch is the number of subscribers or signups.
Newsletter Open Rates
Headlines are a special science anyway, but for Newsletters they are extremely important. They are your one chance to make people open your newsletter and hopefully actually read it. Newsletter Open rates strongly depend on headlines (and if your newsletter is ending up in the promotions-tab – or even declared spam).
People opening the newsletter still do not mean people are actually reading your message and clicking on the provided links – so go on and measure how many of them actually click.
Since in most cases your marketing journey does not end when people land on your website, you should monitor what they do there and where they come from – even better: What do visitors from which source actually do on your site. This also helps you to decide which traffic source is the most valuable to you.
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Conversion rates or number of conversions
When goals are actual sales, signups or likewise, you require the web visitor to take action (buying/ signing up/…). The action the user takes that converts him from a web visitor to a customer is called a conversion. Depending on your situation, you might either define success as the number of conversions – or you might measure the conversion rate. The conversion rate is the percentage of visitors that convert to customers.
In most scenarios, you are going to measure both, of course. In scenarios involving cheap traffic, the conversion rate is less important, while in scenarios with expensive traffic the conversion rate is most often the actual definition of success!
Just as an example: We were still running exploreB2B we were seeing traffic spikes from StumbleUpon to exploreB2B, but these visitors are not the most valuable to us, in the best case they read articles, they rarely sign up or visit other pages. So we are happy with traffic from StumbleUpon, but this is definitely at this time, not a marketing channel we are going to pursue with more energy as conversion rates are to low to increase the investment – yet getting free a few conversions from cheap traffic is still worth it.
Customer Acquisition Cost
Now it gets tough: You get people to buy your product, to become your customer, but you are still not finished with measuring the success of your marketing process: What if getting there costs you more money than your new customers will ever make you? Then your Customer Acquisition Cost is tooooooo high.
The customer acquisition cost is defined as the cost it takes you to acquire one customer:
CAC = Marketing Cost Total/Conversions
Customer (Lifetime) Revenue/Value:
Customer Lifetime Revenue/Value is one of the most important values in marketing B2B and especially subscription products. Yet it is also one of the hardest to determine and in many scenarios, it can take years to determine this – if you manage at all.
Think about it: In B2B, customer relations are key to success – happy customers buy again, and again. Determining how much an average customer is getting you in revenues is key to determine how much you can invest in the relationship – and therefore initially in marketing.
But how do you determine this value? The answer is: very often you don’t.
You either make assumptions about it – meaning you take more or less educated guesses, or you decide to ignore this number totally. Nevertheless, if you can get data on this, it’s often the most valuable data you can have.
There are many more numbers you can measure, compare and work to improve. What is the best number to prove success or failure of your marketing activity, depends on your own special definition of success and your goals.