When it comes to marketing strategies, metrics matter! While it is crucial to know leads generated, etc. there are also other factors to monitor. Here are some of the metrics we work with our clients to observe, understand, and then implement lessons learned into future marketing efforts.
ROI (return on investment) – ROI is a tool of measurement that is used to calculate effectiveness and value of an investment. It shows the gain or the loss of investment by comparing and measuring the amount of return on investment with the cost of the investment.
CPA or CPC – CPA stands for one of the following; Cost Per Acquisition, Cost Per Action while CPC stands for Cost Per Click or Cost Per Conversion. CPA/CPC is determined by a simple formula the number of pre-defined actions taken divided by the total cost of that campaign. This is an easy and straightforward way to get a quick gauge on how the campaign is performing. Remember, if a potential client doesn’t see value in your ad/campaign they won’t take that pre-defined action. Always provide value.
ROAS (return on advertising spend) – ROAS is a tool that is used to measure the profit made from advertising. It is a useful metric to evaluate the marketing campaign performances, due to it measuring how much revenue you will be receiving back on every dollar you spend on advertising. Using the ROAS formulas helps you gain specific and precise performance measurements based on each marketing network executed. As an example, you can apply ROAS to certain and specific campaigns and/or ad groups to receive a better perspective on the best direction of optimization on unprofitable advertising. The formula for this strategic marketing tool is ROAS = (Ad revenue/ Cost of ad source). Divide revenue received from the advertisement by the cost of the advertisement.
CLV (customer lifetime value) – The Customer Lifetime Value (CLV) metric is used to determine the economic value a customer brings to your business for the entirety of the time they are your customer. This specific metric takes into consideration everything from their first interaction to their end and final purchase with your business. This is imperative in determining whether there is additional value in long-term marketing opportunities. To determine the CLV, you take the CV and multiply it by the customer’s duration with your company.
Know your business and know your tools. With the knowledge of both, you are sure to succeed.