When we talk about metrics in marketing strategy, we have to take into account that one of the big objectives in the marketing world is to improve Key Performance Indicators (KPI), because it will make our company grow. The detection of errors is one of the better advantages that one can obtain on the implementation of metrics. These components are some of the most important in a campaign, because without them, marketing department professionals would not know if the strategy works or not.
Difference between metrics and KPIs
There is some confusion between metrics and KPIs, these two components can look similar, but have totally different functions.
While KPIs focus on giving quantitative data that helps us to keep up to date about the effectiveness of the company. When talking about metrics, we refer to the derived strategy data from the company.
As a result, the main objective of marketing metrics is to monitor the effectiveness of and campaign performance. Thanks to this labor, companies can know if their strategies are working, they can see mistakes or their successes and select the recommended metrics to follow.
With programs like Google Analytics, we can make great follow-up work. Via the establishment of various metrics, we will know about these relevant data for companies, such as the acquisition of customers or the interaction with them.
The quantifiable measure helps transfer those data into shares that can cause repercusion to the company. The selection of the metrics is very important, since it will determine our knowledge about the shares of the metrics. If we choose appropriate metrics, we will even know the impact of commercial goals in different campaigns. Some of the metric results are: bringing quality traffic, increasing your visibility in search engines or attracting potential customers.
You will be fed up hearing that metrics will help your company grow and relaunch your business. But, what are the main benefits that can provide you with their implementation?
- Real time knowledge of the repercussions of your shares.
- Change of your shares after seeing your actions.
- Increase in sales.
- Situation of the potential customers.
- Budget optimization.
- Knowledge of the company and the most appropriate channel to focus your efforts.
- Discovery of the star products and what doesn’t work.
- Creation of the potential ideal customer.
What types are there?
Different types of metrics exist that will focus on achieving different results. Therefore, the selection of these components is paramount when implementing your strategy. The objectives to be defined are the factors that determine the metrics needed for your business.
Below, we explain the different metrics that you can find in Google Analytics:
The ratio between the company's effort and investment to obtain more potential customers. In this metric you will find some data such as revenue growth, conversions, acquisition cost or return on investment.
Make a comparison between the behavior of one campaign's target audience to another. It can focus on customer acquisition or sales of a certain product.
Benchmarking against competitors' flagship products, i.e. it creates a kind of ranking reflecting the level of success of a product.
This type of metric is one of the most important at a digital level. Thanks to them we know the increase in followers, searches about the company or the level of interaction or conversion. Engagement or brand mentions are some of the data that you will obtain in this metric.
Although each metric has a different objective, it is essential to make it clear that some of them belong to several types, as they are in line with SMART objectives.
The most important KPIs to generate relevant metrics for your company
The implementation of programs like Google Analytics will help you to know fundamental information for your company, in this article you can find more about the digital marketing tools that your company should use . Once you have this programme up and running, you should select objectives according to the metrics that are of interest to you in order to continue growing:
- Percentage of marketing cost to acquire a customer (M%-CAC)
- Customer Lifetime Value (LTV) to CAC ratio
- CAC payback time
- Percentage of customers originating from marketing
- Percentage of customers influenced by marketing
- Conversion rate
- Monthly recurring revenue (MRR)
- Net Promoter Score (NPS)
- Cost per lead
- Total number of visits
- Click-through rate
Why are they important?
With the help of metrics we will be able to determine whether or not marketing campaigns are working. Thanks to this element we will be up to date with everything that is happening in our company, to the point of creating our budgets based on the data obtained.
Knowing the impact of marketing in the company will encourage managers to give value to this department and hire the number of people necessary for a quality implementation.
Therefore, the information obtained will not only have an impact on the products or the marketing campaign launched, but will also help to determine SMART objectives for the company, organise tasks according to their difficulty or change the way of working due to their ineffectiveness.
These SMART objectives are fundamental for the design of the strategic plan of the marketing plan, after the definition of the company's vision and mission, and prior to the planning of the company's key operations.
When we consider measuring and monitoring data for our online marketing actions, the first step is to be clear about the objectives we are pursuing by asking ourselves the following questions:
What do I want to achieve?
While it may seem logical and common sense, starting a marketing campaign without specific objectives is a mistake that is more common than it seems and one that should be avoided at all costs.
SMART objectives are designed to provide structure and direction throughout a project and better identify what you want to achieve. Briefly, each measure should be: specific to the business purpose, measurable, achievable, relevant to the success of the organisation, and broken down into steps.
It is worth stopping to think about the objectives and defining them, because that is where we draw the metrics or KPIs we want to measure. Thanks to this, later on we will certainly be clearer about our goals, or in other words, we will be able to know what actions are required to develop a successful marketing campaign. Through this, we will also be able to know the resources we need to achieve it and the appropriate channels to target our audience.
That said, it is important to add that metrics are a fundamental tool when developing the SWOT analysis. This analysis, also called SWOT, allows the company to understand its current situation and presents an overview with which it will be possible to recognise both the resources it has and the possible challenges that will need to be faced in the short, medium and long term.
The SWOT is, in essence, a map through which the weaknesses, threats, strengths and opportunities of the organization are established. Through it, an internal and external analysis of the environment in which the activity is developed is carried out in order to improve its profitability, operation and positioning in the market.
Metrics, therefore, represent the compass that will lead you to the success of your marketing strategy. However, on their own they mean nothing if you don't know where you are going and what you need to do to get there.
Only by drawing up a plan in which the objectives are clearly stated, based on that and specialized marketing knowledge, establishing the corresponding KPI's, as well as a thorough understanding of the brand's position in the market, will it be possible to use metrics as an effective tool.
Taking into account, we can say that it is not only about knowing the metrics and different KPIs, but also about knowing how to measure them.
There are several ways to do this, the global data from Google Analytics, those from social networks, those that come from Google Analytics, those from social networks, those that come from marketing actions in various channels (SEM, display, email marketing, etc.) all are different, and it is also possible that they come from different departments.
That is why it is recommended to have a dashboard, control panel or scorecard where we can see the selected KPIs to analyze their evolution and the achievement (or not) of our objectives and of course, of the metrics that will be related with our goals.
This scorecard must group all the necessary data and be kept orderly and updated according to these premises:
- Include KPI principal : this will work to evaluate if these continue being part of the main objective or if it is necessary to modify. In fact, is it necessary to select KPIs which are significant and put aside those which do not contribute relevant information.
- Realizing a historical control of KPIs evolution: knowing how are being integrating the results obtained to our strategy, it must be seen at first sight. Thanks to this we will extract conclusions, make modifications and correct them.
- Establish relations between KPI: Having organized KPIs and classified will allow reach a global vision of functioning of all our marketing actions.
There are a multitude of tools on the market from companies dedicated to assembling dashboards or control panels with metrics and KPIs of different types. Although they are usually paid, there are also some free ones. These offer advanced solutions that are very useful when we have many KPIs to analyze or need tools of different types to measure different sources. Some examples are WeloveRoi or New Relic.
It is important to contemplate that it is usually useful not only to consider the tracking and adequate election of indicators most important and its evolution, but also to deserve the planification control or prediction and the different drifts which are presented in a period of time, for example: month to month.
Realizing monthly controls are recommended according to the type and length of executed campaigns. Additionally to this, it must be taken into account annual metrics or quarterly in function of the campaign and its budget.
It should be pointed out that as all related to digital range, also these tools evolve and transform fastly. Due to this, the best always is not opting to invest in these in a prolonged period of time.
It must be taken into account, because companies are increasing and these have incorporated KPI measuring to marketing digital plans. As certificate Stadista study, in this case, it makes reference to email marketing strategy:
In spite of that, The Digital Box company explains in a report that one of each three companies don’t track the actions return and marketing digital campaigns.
As this articleexpose, Massimiliano Brígida, Spain CEO of this company comments that: “analysis and tracking is essential and more in a marketing mobile range where it is possible to obtain in any moment and any place a precise result about visited pages, unique visitors, clicks on CTA, origin place and device from it is navigated. Disposing of that information in the palm of the hand allows reconducting different actions or initiated campaigns and values the investment destiny”.
At the same time, it is revealed that companies which develop a marketing digital plan, only have a 65% concern to realize analysis and related measurements to obtain results that benefit its objectives.
We can observe which companies' percentages that do not analyze and measure results of digital actions keep on going very high, this indicates that it has left yet a long path to traverse in this area which presents, also, great optimization opportunities, employment and development in a high level.
Measuring all what happens in our website and all marketing actions which we realize is crucial to extract conclusions which allow optimize strategies, correct mistakes and change patterns, always with the final objective of getting profitability.
As we have seen, the importance of metrics goes beyond the knowledge of some numbers that will improve the digital strategy that has been proposed. It is, after all, the foundation on which these digital plans are based.
However, just considering them is not enough. In order for them to provide information capable of improving the marketing project, it is essential to know the different metrics that exist and to know which KPIs to put them together with in order to create sure and promising
This is the problem that many companies have and fail to see. Most wonder why, if they are using KPIs and getting different types of metrics, they are still not getting the desired results. They forget that they need to have a good understanding of how to incorporate them into their SMART objectives.
Another drawback that such companies suffer from, and overlook, is the concern about tracking and companies all the information they receive from all these metrics. Without tools that help to manage this data, or the use of a dashboard, it will be impossible to analyze the results properly to solve the mistakes in the strategy and, therefore, the result of these strategies are left to chance,
In short, metrics are the key to developing a digital strategy capable of guaranteeing the results proposed in the objectives. Without them, the strategy has lost its way.