The 10 most important marketing metrics

In the fast-paced world of digital marketing, it's increasingly difficult to have a clear picture of what working strategies look like. At times like these, the use of marketing metrics is particularly important. It's a set of objective data that we use to track the real results of campaigns, find cost-effective advertising channels and optimise inputs.

This article looks at how the most relevant marketing metrics help to adapt strategy according to consumer behaviour and changes in the market environment. Whether it's Conversion Rate, ROI, ROAS or other metrics - the success of any business venture depends on the skill of using these metrics.

What are marketing metrics?

Measuring the success of a business can be done using so-called marketing metrics. These make it much easier to identify optimal strategies in relation to market characteristics.

They serve as a compass that points in the right direction towards success and reveals the real results of the campaigns and investments made.

In this way we can analyse consumer behaviour, measure the return on spend and determine which channels are the most cost-effective for the market our business occupies.

In digital commerce, the use of marketing metrics is at the heart of strategic planning.

They provide the objective data needed for proper optimization, successful budget planning and informed decision making. This ensures steady business growth and achieves specific KPIs.

What is the role of KPIs?

A KPI or Key Performance Indicator is a metric that determines how well a process or campaign is performing against its goals. In other words - a measurable quantity that helps to monitor the progress of the business.

If the goal is to increase sales in an online store, then the conversion rate or average cart value can be considered as a KPI. These values can be indicators of possible changes that should be incorporated into the strategy.

✔ Progress tracking - real-time assessment of progress and determination of the need to adjust the action plan.

✔ Reliable information that is analyzed helps in choosing the direction and channels of communication.

✔ Optimize and improve results - kpi changes show how best to optimize marketing goals.

One of the most important marketing metrics - conversion rate

Conversion rate or conversion rate measures what percentage of people who visit a website or see an advertisement then take an action. This could be a purchase, registration or even filling out a contact form.

👉 If 100 people visit our site and 5 of them make a purchase - then the conversion rate is 5%.

🔸 This is an indicator of whether the site or the ad is effective. If the conversion rate is low, you need to make some changes - in the design, messages or offers.

🔸 Is it worth investing? If a channel has a higher conversion rate, then it's a good idea to increase the investment.

🔸 It' s also a way to improve the customer experience. By analyzing customer behavior, necessary changes can be made to increase the likelihood of taking desired actions.

How is ROI measured?

The use of marketing metrics such as Return on Investment will show whether a campaign or activity is making a profit relative to the money invested.

👉 Formula for calculating the percentage of profit: ROI = (Advertising Revenue - Advertising Cost) / Advertising Cost x 100%

👉 This way we get a 200% return on investment.

By using ROI, it is understood whether the investment is worth it and exactly how much profit is generated, and in case of low or negative ROI, a change in the strategy used is required.

Why is it important to have a return on advertising spend?

Return on Ad Spend (ROAS) is a metric that shows the profit generated based on the advertising budget spent. The focus of ROAS is only on the effectiveness of the amounts that are spent specifically on the advertising campaign.

👉 Calculation formula: ROAS = revenue / cost

When marketing metrics such as ROAS are low, targeting a more relevant audience or changing the positioning approach is necessary. Against the information we receive, we can determine how to focus our attention relative to optimization.

Marketing spend - how much and where do we invest?

Marketing costs include all the resources that are invested to get the selected products to the relevant target audience. This group can include the cost of online and offline advertising and the purchase of marketing analytics tools, email marketing platforms and other ancillary software. It also includes the costs of various agencies and specialists such as marketers, designers and copywriters.

Even more modest budgets can deliver good results if funds are allocated wisely in relation to the priorities set. If a channel spends a large part of the budget but does not deliver the desired results, it is necessary to reduce the specific expenditure and increase it in a more profitable direction.

The more successfully marketing spend and the various marketing metrics are managed and tracked, the more accurately it will be possible to determine what brings the greatest benefit to business growth.

The relationship between the strategies used and the average cart value

Average Order Value shows the average amount that customers spend when purchasing from our online store.

The high average cart value is an indicator that the financial targets will be met. In cases where the AOV is lower than desired tactics are implemented to attract new customers and increase sales. This can be achieved by offering combination offers (product X brings a discount for product Y) or using upsell and cross-sell strategies - buying more expensive or additional products.

Analyzing the carts of new customers versus loyal customers could help increase sales.

Cost per Click - or how to calculate the cost per click?

The easiest explanation of cost per click (CPC) - the amount that is paid each time a user clicks on our ad on the internet. For example, Google and Facebook charge for every click users make on our advertising content.

The lower the cost per click, the more clicks can be generated. A high CPC may mean that the ad is targeting the wrong audience or the competitive area has traditionally higher cost-per-click rates. CPC determines which keywords will be used and what campaign settings will be used to achieve the most optimal results.

Which is the most profitable way to attract potential customers?

Cost per Lead (CPL) calculates the amount of money that needs to be paid in order to attract a new customer interested in the products offered. In marketer jargon, this is a "lead".

For advertising campaigns that target the collection of emails, phone numbers or other information from consumers, CPL determines what the cost is for each contact collected.

Marketing metrics like CPL help to target audiences more accurately. Differentiating by interests, behaviors, and location can reduce cost per lead. This is a key metric for successful business development because it gives a clear picture of how much each potential customer is "worth."

Do consumers like the ads they see?

Click-ThroughRate(CTR ) is a metric that shows how many times an ad has been clicked on compared to the number of times it has been shown to users. This is how we know if people are engaging with the content being shared.

A high CTR means that the advertising content is relevant to the interests of the audience it is targeted at. With Google and Facebook ads, a higher CTR often results in a lower cost per click.

Marketing metrics like this show whether the ad content is succeeding in capturing the interest of consumers or whether it needs to change.

Do you know what CLV is and how it relates to business?

How much will our business gain from the time of the first purchase until a customer stops using our products? We find the answer to this question by using Customer Lifetime Value (CLV), or in English, long-term customer value.

Sometimes the better strategy is to focus on current users. A high CLV is an indication of loyal customers who purchase regularly from our site. Using this metric allows us to make projections of upcoming revenue. This is essential when making financial and strategic decisions.

What is the importance of the level of commitment?

Through Engagement Rate, we understand whether the audience interacts with the content we share. This can be expressed through likes, comments, shares or any other form of engagement.

Users who like, comment and share our content are much more likely to become loyal customers of our brand.

How will using marketing metrics improve our business strategy?

Did you know that knowing and using marketing metrics is critical to achieving the goals we set for ourselves? The success of our business depends on adapting our strategy to changes in the market and different target audiences. Using A/B testing means that advertising content is optimised as much as possible. This leads to increased sales and the creation of more loyal customers.

Applying marketing metrics shows how to invest our time and resources. Also remember that good communication with the audience will ensure steady growth for the business.

Each of the marketing metrics discussed provides information about a particular aspect of business development. With their help, advertising costs are optimised and consumer behaviour and interests are analysed. This is especially important for maximizing the effectiveness of the content we advertise.

When strategies are based on real values and not just guesswork, it is much easier to achieve high sales and stable development. By using marketing metrics we can determine the health of our business. This way we can easily chart a path that will increase success and create a more loyal and engaged audience.