Quantifying the success of your business can be tricky.
This article will walk you through five essential data metrics many people ignore. Keep these in mind when you measure your marketing campaigns and look to fine-tune your marketing strategy.
Average Cost Per Lead
Average cost-per-lead (CPL) is a straightforward concept: How much does it cost to acquire a new lead?
First things first, what defines a 'qualified' lead?
A lead is any potential customer—usually, someone who resembles your target market.
For a frameless glass door manufacturer, it may be a homeowner or architect looking for an alternative to French Doors or remodel a patio area for an upcoming project.
Now back to CPL.
CPL doesn’t measure sales or views.
It looks at the cost of acquiring data from a potential customer. Data can come in the form of email addresses, phone numbers, zip code, social media follows, and pretty much any kind of demographic data.
The objective is to get as many qualified leads as possible while spending the least amount of money...as possible.
This entails setting up a lead magnet, essentially a hard-to-resist offer (such as an ebook or specialized newsletter) in exchange for information. A lead magnet can also come in the form of a digital contest, a free installed quote, survey, or free trial signup.
The idea behind a lead magnet is simple: Give value.
The more valuable your offer, the more likely people will submit their information.
When measuring average cost per lead, you’re looking at how much you’re spending per potential customer.
So if you’re spending 2,500 dollars on your marketing campaign, and you’ve managed to draw in 25 new leads, you’re paying $100 per lead.
The average CPL varies per industry, but, as a rule of thumb, the more expensive the product, the more it costs to acquire a lead.
To cite an example, the typical CPL for retail is around $34 but, for financial services, the number is close to $160.
Knowing how much each lead costs will improve the way you execute your marketing plan. Just keep in mind that, ideally, the cost to acquire a lead should not exceed the amount you expect to gain from each sale.
How many people engage with and stay on your website?
You can find out by asking each of them one by one...or you could look at bounce rate.
Bounce rate measures the percentage of people who leave your website after visiting only one page.
It’s an assessment of engagement: is your content interesting or compelling enough for visitors to want more, or do they “bounce” and look for better ways to invest their time.
Keeping track of your site’s bounce rate - per source - can help you understand what content keeps your visitors on your site.
Do they stick around for blogs or webinars? Are they reading about your offers or client testimonials? Is your content “sticky” enough for people to stick around?
A low bounce rate indicates that people are actually navigating and staying on your site. In most cases, the more pages they view and longer they spend, the higher the likelihood of a conversion.
A high bounce rate, on the other hand, could be a symptom of many things. It could simply be that your content isn’t worth your customers’ while, or that User Intent does not match what the visitor is looking for on your website. Perhaps, your site’s navigation is confusing and people can’t find their way around.
Treat bounce rate as a symptom, and let it lead you to dive deeper diagnose what’s wrong (or right) with your website. The easiest way to see bounce rate is in Google Analytics. Just go to your Google Analytics account, and you should see bounce rate on the Home panel.
There are a number of other apps like Klipfolio and MonsterInsights that allow you to aggregate bounce rate data on a dashboard (but we’ll save that discussion for another time).
Looking for strategies to lower your bounce rate? Try experimenting with video marketing.
For one of our clients, we inserted a short 30-second video on the homepage, and within one month, lowered our bounce rate by almost 6% as it still continues to decline.
Among all your metrics, bounce rate may be the scariest.
Remember: a high bounce rate isn’t necessarily bad.
As with most key metrics, you have to understand the numbers in context. There are certain instances where a high bounce rate is seen as acceptable, such as a single page site, landing page or blog.
On the other hand, if you have a lot of pages on your site, and your homepage is the gateway to the "important" pages, then yes, a high bounce is not something you want to see.
Interactions Per Page
As with your site's bounce rate, you will also want to track the behavior of your website visitors.
A common mistake people commit when measuring interactions is that they limit themselves to the online patterns of their leads or conversions.
To adequately understand the success of an online campaign or company website, you’ll have to collate and study all of your web traffic.
Measuring your company’s online interactions can be daunting.
There are plenty of important online Key Performance Indicators (KPIs) to keep track of when interpreting results, such as:
- Reviews, comments, and likes
- Click through rate
1.) "Pageviews" are the number of pages your site visitors have viewed in total
It is not the number of active users on your website. As a rule of thumb, the more pageviews you have, the better.
You want each person to browse multiple pages per visit so that they can spend time engaging with you and learning about your service.
2.) "Reviews, comments, and likes" are the feedback of your customers
Around 72% of all customers read reviews of products and services before availing of it.
Try boosting the number of proactive customers by making reviews visible on your company website, or try keeping your Facebook Page updated as well.
They have a rating and recommendation system that’s visible to all Facebook users who view your page.
3.) "Click-through rate" is the rate at which ad content is clicked on
The higher your click through rate is, the better your Quality Score is, and the higher your quality score is, the more relevant and high your search visibility becomes.
At the same time, if you have a higher click-through rate, you will have higher page views, boosting your overall online interactions.
All in all, by tracking your interactions per page you’ll be able to determine how visitors choose to use their time on your website.
Interactions are important, and one of your main goals is to increase these interactions and ultimately see a raise in web conversions.
Customer Retention Rate
Customer Retention Rate measures a customer’s life cycle or the number of customers that continue to avail of the products a company has to offer.
In terms of service, such as dentistry or carpentry, it’s about your loyal customers, the ones whose names and faces you recognize from across the waiting room.
So why is customer retention so important?
Source: Post Funnel
Keeping track of your customer retention rate allows you to gauge how much effort and time you’re putting into your marketing campaign.
Without a doubt, higher customer retention rates mean higher chances for web conversion at a lower cost and effort.
In a 2016 study done by the Temkin Group customer experience research and training firm, loyal customers are seven more times likely to accept offers and deals, five times more likely to avail of new products, and four times more likely to send referrals to draw in new customers.
While customer acquisition is still essential and beneficial to your company, it costs seven times as much as customer retention.
Customer acquisition also requires more effort for its marketing campaign, since there’s no direct line of communication between you and potential leads.
On the other hand, strategies to boost customer retention rely on established relationships.
A simple yet highly effective technique would be to implement a reward strategy, like Uber’s VIP program or Qantas’ frequent flyer membership. Not only does this incentivize customers to build loyalty with your company, but it also ups the overall quality of your service.
Measuring your customer retention rate is relatively straightforward. You subtract the total number of customers you made a sale to, to the total number of customers you have by the end of your time frame, then divide that value by the number of customers you have at the beginning of the period.
Having a low customer retention rate can be an indication of multiple problems. Whatever the case, it’s best to go to the bedrock of these issues. You are more than likely to find issues with quality control, customer service, or competition-- which affect more than just your customer retention rate.
While measuring data metrics is now easy with applications like Google Analytics, what really matters is the way you collate, interpret, and handle the information at hand.
As business owners, you have to stay sharp and organized. You could have all possible data metrics at hand, but if you’re unable to make sense of the data, and turn them into actionable insight, then your hardwork will be for naught.
Start by deciding what important key metrics you should track, how you intend to measure them correctly, and what your long-term goal is. From there, you’ll soon have a game plan that could help boost customer engagement and web conversations in no time.