Marketing is only effective when it is measurable, enabling you to evaluate outcomes and compare this to your expectations. The ability to evaluate marketing outcomes begins through a marketing plan. Your plan needs to articulate your strategic direction and then identify the outcomes you want to achieve. Part of this process should include identifying the metrics you will use to measure these outcomes so you can evaluate progress and the end results.
Metrics exist for most aspects of marketing and it is important to look at the real elements that you want to measure. For example, measuring the number of hits to your website is meaningless, when the real value is in the number of website visitors that then interact with your business or respond to your call to action. Begin by understanding the value of what you want to measure and the reason why it is important.
Customer acquisition and retention is often a particular area of focus. Begin by understanding the number of customers that you have and make sure you avoid double-counting, particularly if there are multiple users but just one purchaser. Once you have identified an accurate number you can then identify the frequency and recency of their purchases and your overall client retention rate. This data provides an insight into the lifetime value of your customer. As a result, you are able to gain an understanding of the customer attributes that are required to provide a greater return to your business.
Furthermore, using these metrics you can then explore the cost of acquisition and orientate your approach to customers that provide a greater level of return. Consider the time that is required to convert leads into customers, as well as the number of touch points and key steps that are required. Very few businesses can rely on one channel alone to generate customers, so it is important to consider each step that is required to achieve these outcomes.
Understanding and embedding metrics into your marketing plan ensures you are able to evaluate your results and make informed decisions. For example, without these metrics you may have a sound acquisition approach, but could end up spending far too much time and money on customers that generate too little return. Ensure that you have the ability to understand where best to invest your marketing outcomes.
Taking the time to develop the right metrics enables you to establish a benchmark and evaluate performance over time. As a result you are able to measure the impact of your marketing outcomes and work towards the strategic direction you have identified.