One of the biggest challenges marketing teams face is measuring their marketing efforts and campaign performance. With so many marketing channels to think about, it is challenging to keep track of the important metrics.
Luckily there are a few tactics that you can implement to make the most of your marketing data. Here, we'll tell you how to measure your marketing performance, why it's important, and what metrics you should keep track of.
Why should you measure marketing performance?
Creating and managing marketing campaigns requires time, effort, and hard work - so it's important to know that your efforts are achieving the right results. Marketing is a crucial part of your business strategy.
The right marketing metrics provide valuable insights into your business performance so you can assess your marketing budget, identify and choose the right initiatives, and meet your business objectives.
Common problems when measuring marketing performance
Measuring marketing performance isn't always straightforward. Many people struggle to accurately record data from their digital marketing efforts.
Here are some common mistakes that you should try and avoid when building your own marketing performance measurement plan:
Manually processing data
Data is everything in marketing, especially when it comes to digital marketing. Website traffic alone can produce a huge amount of marketing data and without the right digital marketing tools, your team could make errors that cost you both time and money.
Analytics tools automatically capture website visitor data so you can better measure your digital marketing performance. With more accurate results you'll be able to pivot, optimize or realign your approach.
Measuring too soon
While some marketing campaigns can generatequick results, others take time. Social media campaigns can quickly increase brand awareness leading to an uptick in sales, but other marketing initiatives like SEO campaigns take longer to see revenue growth. This is because, like many content marketing strategies, SEO relies on organic traffic to bring in potential customers. If you start tracking too soon you might not see the full value this approach has on your marketing performance.
Vanity metrics vs actionable metrics
There’s many marketing metrics you can use to track both traditional and digital marketing campaigns. A common mistake marketers make is just focusing on vanity metrics. These barely scratch the surface of available data and leave an incomplete picture of your marketing activities. While they may look impressive, they don't indicate overall performance in isolation.
Some vanity metrics include:
- Social media followers
- Website visitors
- Unique visitors
- Newsletter subscribers
The issue with these marketing metrics is they don't measure how your customers interact with your business. For example, you may have a large number of social media followers but still struggle to get these followers to convert.
Instead, focus on actionable marketing metrics to help measure your marketing performance. They help you better understand how you can optimize your outputs and better place your marketing efforts. Actionable insights often work as a common denominator so you can compare how your campaigns perform against each other. This data helps your marketing team assess what is and isn't working so you can adapt your marketing campaign as needed.
Examples of actionable metrics include:
- Conversion rates
- Revenue generated
- Cost per lead (CPL)
- Customer lifetime value (CLV)
- Return of investment
We'll explore what these and other metrics mean later on.
How to measure marketing performance in your business
The process of measuring marketing performance will differ from business to business. It all depends on the goals of your marketing team as well as your overall marketing strategy and budget.
However, there are a few steps that businesses can follow to ensure they're tracking performance effectively.
Determine the goals of your marketing campaigns
Every marketing campaign needs clearly defined goals. They help your marketing team measure their progress and assess whether they're on track to meet their objectives.
To improve your chances of success, your marketing team should set SMART goals. SMART stands for:
- Specific: Specify as many details as you can about your goals
- Measurable: Select specific metrics or numbers that you want to measure and track
- Achievable: Consider what is possible within your teams
- Relevant: Select goals that support your overall business objectives
- Timely: Set a deadline for your team to complete this goal.
Having these specifics within your goal helps keep all members of your team on track.
For example, "Increase monthly site users" is not a SMART goal but "Increase monthly site users by 1000 before the end of the year by delivering personalized content to small business owners" is.
Select the right data-tracking software
Unlike traditional marketers, digital marketers rely on data-tracking software to monitor their marketing efforts. While it can be hard to measure how many people interacted with your billboard or magazine ad, digital marketing performance can be tracked with the right software.
Here are some free tools to consider in your business:
Google Search Console
Google Search Console (GSC) is one of the best data tracking tools out there - and best of all, it's free! It helps you keep track of your site's SEO performance and ensures that Google has crawled and indexed your sites. Without it, you may struggle to get your new blog post or landing page to rank.
It provides information about other criteria that influence your search rankings like how it appears on mobile devices, potential security issues, and what other sites link to yours. You can also track performance metrics such as:
- Total number of site impressions and clicks
- The site's average click-through rate
- Average search result position
- What searches lead to your site.
Google Analytics 4
Google Analytics 4 (GA4) is another free marketing performance measuring tool that provides insight into your digital marketing tactics. Once you add the necessary JavaScript tracking code to your site, Google Analytics will record how users interact with both your web pages and online ads.
GA4 is perfect for marketing teams trying to track:
- Event hits: The tool will track every time a specific action is made on a page like clicking a button or filling out a form.
- Conversion rates: GA4 helps with tracking conversions by recording each time a visitor purchases on your site.
- Web traffic: The traffic acquisition feature tracks how users found your site and what pages they visited.
Select your key performance indicators (KPIs)
Choosing which marketing KPIs to track is a crucial part of measuring marketing performance. The KPIs you choose will depend on your marketing approach. For example, if you prioritize social media marketing then you'll want to track things like new followers or post interactions. However, if you're running a campaign to boost your customer number you might choose to track leads generated.
Create a performance-tracking schedule
Now that you've set your marketing goals, selected your KPIs, and equipped yourself with the right tools, you can start tracking your marketing performance. It's important to continuously evaluate these metrics and adjust your marketing strategies as needed.
Creating a schedule can help you stay on top of this. How often you check KPIs performance will depend on the channel, for example with a pay-per-click ad campaign (PPC) you'll only need to track performance when the ad is live. For SEO however, you will need to continuously track your progress and keep records to improve future strategies.
Send conversion data to the CRM
The right CRM can do more than just manage your sales funnel, it can play a crucial role in helping businesses measure important marketing metrics. CRMs like Capsule act as a centralized platform that allows you to manage and analyze customer interactions.
This information helps markers track, analyze, and measure the impact of their marketing efforts across the entire lead generation lifecycle. This creates actionable insight into how to best streamline your marketing strategies.
The best metrics to track performance
As explained, selecting the right marketing metrics can make or break how you measure your marketing performance. so let's explore some of the best
Return on Investment (ROI)
Return on investment is a financial metric that compares the loss or gain of investment. It is expressed as a percentage and calculated by dividing revenue by marketing cost.
Sales revenue
Your business's sales revenue is the total amount of money generated through products and services over a specific period. It's crucial for assessing the financial performance of your business.
To calculate it you need to multiply the number of units sold by the selling price per unit.
New customers
This measures the number of new customers acquired over some time. This is a great metric for businesses that want to grow and expand their customer base to help increase their sales.
Organic traffic
This refers to the number of visitors that come to your website via unpaid search engine results. It excludes any traffic generated via paid advertising such as Google Ads or sponsored social posts. This is an essential metric to track if you're looking to evaluate the effectiveness of your SEO marketing strategy.
Customer lifetime value (CLV)
This is the total projected revenue that a business expects to earn from a customer throughout the entire business relationship. It considers average purchase value, purchase frequency, and the expected duration of the customer's relationship with the business.
This is an important metric for assessing the long-term value of acquiring and retaining customers. CLV is calculated by multiplying the average revenue per customer by the average length of the customer relationship.
Customer acquisition cost (CAC)
Customer acquisition cost (CAC) is the average expense that a business spends when onboarding a new customer. It's key for evaluating the efficiency of your marketing and sales team.
You can monitor CAC against customer lifetime value (CLV) to ensure the sustainability of your current strategies. If CAC exceeds CLV then you will need to change your acquisition and retention practices to maintain a healthy balance and maintain customer loyalty.
Email marketing performance
This metric measures the effectiveness of your email marketing campaigns. This can include a range of more specific metrics like:
- open rate
- click through rate
- conversion rate
- overall engagement
By analyzing these metrics you can better turn your strategies to improve the way you communicate with your audience.
Social media engagement
If your marketing team puts a lot of focus on your social media strategy then you need to be tracking your engagement across all your channels. Likes, shares, comments, and new followers are all indicators of how strong your online marketing and social media strategy are.
Qualified leads
This measures the number of potential customers who have demonstrated a genuine interest in your product or service and are likely to become paying customers. This is an important metric for businesses looking to grow their customer base.
Wrapping up
Measuring marketing performance is an important part of your business strategy. It helps you determine which parts of your current strategy are working and which parts you need to adjust.
Choosing the right marketing KPIs is crucial, otherwise, you could struggle when generating leads or measuring the performance of inbound links. Correctly measuring marketing performance helps you improve customer retention by monitoring how your existing customers interact with your marketing content.
Managing data can be a challenge, which is why the most successful marketing and sales teams invest in the right tools. Capsule CRM can help you keep track of all your customer and marketing data so that you can focus on building and managing your campaigns and marketing budget.
Try Capsule free for 14 days and see how it can help boost your business.
