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17 February 2017, 09:55

Vanity, performance or impact - which marketing measures really matter?

We all know the importance of measuring our marketing efforts. Doing so is how we determine the success of our campaigns and assess whether our chosen marketing activities are a good use of company time and money. With so much data at our fingertips, though, it’s easy to fall into the trap of measuring anything and everything. As well as being overwhelming, this can lead to clouded judgement and an unproductive focus on short-term issues. As such, marketers need to measure what matters – not simply what they can.

This means choosing the most appropriate measurement metric for your marketing activity. We split these into three types: vanity metrics (e.g. impressions, fans,engagement rate and page views), performance metrics (e.g. cost per click (CPC), conversion rate, unique visitors and returning visitors) and KPIs (e.g. customer acquisition, customer retention, cost per lead (CPL) and revenue). While vanity and performance metrics tell us how individual channels are performing and how customers are reacting to our marketing efforts, KPIs enable us to build up a picture of how these marketing activities are impacting business objectives.

So, with this in mind, here are five KPIs you can use to measure your marketing activity properly.

1.    New customers

Bringing in new customers is a clear sign that your marketing efforts are not in vain. Of course, a customer’s value is dependent on how much they spend with your company, and how loyal they are to your brand. By understanding your cost per customer, and working out how much each new customer has spent, you will be able to evaluate the extent to which particular marketing activities have prompted business growth, and make informed decisions about how much should be invested into future marketing campaigns.

2.    Customer lifetime value

Projecting the amount of profit that your company makes from a customer helps you determine how much money the business can spend on acquiring and retaining new customers, and enables you to plan your budget accordingly. It can also help you understand the profitability of different audiences, which can inform your on-going marketing plans. By establishing a cost per acquisition (CPA) and tracking thisto see if a user converts into a paying or repeat customer, you can work outtheir customer lifetime value.

3.    Return on investment

One of the best ways to determine the success of a marketing campaign is to work out your return on investment (ROI). Before you start any marketing activity, you should set out an objective for what you want to achieve, and measure the campaign against this. An objective is not always financial – you might want to use the campaign to boost brand awareness, for example, or to grow the number of active followers on your social media account.

4.    Benchmarks

Benchmarking, or setting your company against a certain standard, has many benefits – for example, it lets you clearly identify new areas of opportunity, validate your assumptions about performance, set expectations for your marketing activities, and track progress over time. By doing so, you’re able to conduct a more informed evaluation of a campaign’s performance, and prioritise areas for improvement in your on-going marketing activities.

5.    Net Promoter Score

A Net Promoter Score (NPS) is a metric for measuring the loyalty of your customers and gauging how willing they are to recommend your brand’s products or services. It works by sending your customers a single question: ‘On a scale of 0 to 10, how likely are you to recommend our productsor services to a friend or colleague?’. Depending on the response they give, the customers are then split into three groups: detractors (0–6), passives (7–8) and promoters (9–10). By gaining this information, you are able to measure, evaluate and build customer loyalty, which could result in increased revenue and customer lifetime value. 

So, there you have it: five KPIs you can use to measure what matters, rather than simply what you can. One thing to remember is that metrics cannot be rushed – they have to be implemented over a period of time before you can measure their long-term impact on your business objectives.

Here at pslondon, we always look to use core KPIs to determine the impact of our clients’ marketing efforts, refine their activity and measure what’s important to their brand.

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