Determining success of your marketing initiatives is an important exercise to perform regularly and is a crucial part of evaluating the overall function of your marketing department. Or, put simply: you must be able to prove, thus confirm, that it’s worth investing in further in marketing first. This article highlights four important fundamental work metrics that matter for marketers who are looking to maximize their organization’s total ROI at the end of the day.
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Marketing Funnel Leakages
Marketing funnel leakages are the most common and important metrics in marketing. They tell you how much of your marketing budget is wasted on people who have no interest in what you have to offer.
For example, if a company has a conversion rate of 10% and they have 100 leads per month, they will have 10 sales per month. This would be considered good. However, if the company only has 4 sales out of 100 leads, then they have a leakage rate of 50%. The other 46 leads that didn’t convert were wasted money for the company.
What causes this leakage? There are many different reasons why a lead may not convert into a sale or customer:
- Incorrect targeting – This is where the company was marketing to the wrong audience. This can be due to using a targeting method that doesn’t work well or not having enough data about the people who visit your website and blog. This could lead to wasted time and money on leads that don’t convert into customers.
- Poor messaging – This is where the messaging on your website or blog isn’t compelling enough to convince leads to buy from you. If the messaging isn’t compelling, then leads won’t convert into customers. Your product isn’t ready – If your product isn’t ready for sale, then you can expect a high leakage rate. This happens when companies rush out products without testing them first with potential customers. Poor website design – Poor website design can lead to low conversion rates and wasted money on leads that don’t convert into sales.
- Bad pricing – If you price your products too high, then leads will leave your site. Leads will also leave if they find out that other companies sell similar products for less money.
Lead Conversion Rates
Lead conversion rates are the percentage of leads that convert into customers. Lead conversion is often a key metric for businesses looking to grow their customer base. Lead conversion rates vary significantly between industries, but they should be tracked over time to measure the success of marketing efforts.
Lead generation is the process of getting potential customers to express interest in your product or service. Lead generation can be done through direct response advertising, search engine optimization (SEO), social media, and more. There are many ways to generate leads, but it’s important to track how effective each method is at generating them.
If you’re not tracking your lead generation metrics, you might be missing out on key insights that could help improve your marketing strategy. For example, if one type of lead generation campaign isn’t producing enough leads for your business, then you can try another one instead.
Conversion Costs
Conversion costs are the costs associated with making a sale. For example, let’s say that you sell clothing and each item costs $100 to make. You have a conversion rate of 5%, which means that for every 100 people who visit your site, five will buy something.
If you sell an item for $100 and it costs $50 to ship it, then your conversion cost is 50%. This means that for every sale you make, you lose $50 on shipping. If you want to increase your profit margin, then it would be wise to reduce shipping costs or increase the price of your product so that shipping costs become a smaller percentage of your overall sales figures.
Here are some tips for reducing conversion costs:
- Use video. A 2016 report from the Video Advertising Bureau shows that video ads outperform other types of digital media by a factor of 10x, and this is especially true when it comes to mobile devices. Video allows you to tell your story in a way that engages customers, increases brand awareness, and drives sales.
- Optimize your landing pages. Your landing page is where most of your conversions happen, so it’s important to make sure it’s optimized for conversions. This includes things like having a clear call-to-action (CTA), having the right amount of text on the page, and making sure that there are no distractions from the main focus point (i.e., an offer).
- Consider using A/B testing software like Optimizely or Visual Website Optimizer (VWO). These tools allow you to test different versions of your website and landing pages to see which one provides the best results based on metrics like conversion rates, revenue per visitor and more.
Lead Generation Cost per Acquisition
This metric is a direct measure of your marketing campaign’s return on investment. It calculates the cost of generating a single new customer through lead generation efforts, including the cost of sales and marketing activities.
The formula: (Total Cost of Lead Generation) / (Number of Leads Generated)
The higher the number, the better. For example, if it costs $10 to generate one lead and you generated 100 leads in a month, your LGCPA would be $1.00. If it costs $1,000 to generate one lead and you generated 10 leads in a month, your LGCPA would be $100.
Final Say
A lot of marketers fail to understand the importance of metrics. A business cannot grow unless these metrics are tracked and monitored on a regular basis. Tools such as OSlash can help marketing teams access all metrics at their fingertips to create cutting edge campaigns. It does not matter how brilliant a marketer might be, without data, it would be difficult for him or her to make informed decisions that could deliver better results and impact growth.