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Companies can’t improve what they don’t know needs to be improved – nor can they duplicate what works if they don’t know what really works. Data reveals both and answers the most critical questions to help a business grow.
The more information companies can learn about their current and future customers, the more effective their marketing efforts will be. But what digital marketing metrics should companies track to drive growth?
Here’s an overview of the top six metrics every business should be optimizing this year.
1. Traffic Sources
You need to know where your website visitors are coming from. Did they visit your website after searching for you? Was it after I clicked on a referral partner’s link? Was it after seeing a post on social media? Knowing how many people visit your website each month is essential, but it’s equally valuable in determining how they find you.
These are critical insights that help you prioritize the optimization of the most successful channels and make improvements to the underperforming channels.
Related: The Digital Marketing Changes That Will Affect Your Business
2. Time on site
When visitors browse your website, it makes sense to find out how long they’ve been browsing. This valuable metric shows how interested visitors are in your content and whether you are attracting exemplary visitors.
If you see visitors browsing your website for only a few seconds, it could be an indication that they either didn’t land on the site they were looking for, or they quickly realized they weren’t interested in what you’re offering. On the other hand, if you see that visitors are on your website for several minutes, it can indicate that you have content that the market is interested in. A dream scenario for any business is to have low bounce rates and high times on the site.
When posting to social media, sending promotional emails, or running ads, it’s only natural for a marketer to measure engagement rates. For example, are there some Instagram posts with more likes than others? Are there specific days when a better post response, open rate or click rate is achieved than on other days? Knowing the audience’s preferences and habits will help you communicate with them better.
This metric helps you optimize when you send or post promotions and how often. It will also guide you through content creation as you have an understanding of what people are reacting to the most and least.
Related: Best Digital Marketing Expenses for 2022
4. Customer Acquisition Cost (CAC)
There is a cost to every customer – acquiring free customers is a marketing fairy tale. During their buying journey, companies need to measure how much it costs to acquire customers.
This metric will help you understand whether a campaign was indeed successful, whether your investment was well spent, how to maximize marketing budget, and confirm whether you’re targeting the right buyers.
5. Customer Lifetime Value (CLV)
Loyalty is hard to come by, but it is easy to measure. How much customers are likely to spend on your brand in their lifetime is an essential metric for considering how much to invest in marketing for them. This is an important metric that indicates the total financial worth of a customer.
There are segments in your customer database — from repeat buyers to those who shop around — and marketing spend is rarely covered when you’re trying to reach them. This statistic will help you decide where to invest the most.
6. Brand Value
Become an expert on your audience so you know how they see you and your products. Nike, Coca-Cola, and Calvin Klein are all names you’ll recognize even if you don’t buy their products. Most people buy tissues and call them ‘Kleenex’ whether they buy that brand or not. Your brand equity may equal the brand equity, depending on the customer.
By analyzing your brand strength, you will know how strong you are in the market and whether customers prefer your brand over competitors. It will also be a relevant factor in whether or not customers are willing to pay more for your products as they find your brand valuable.
Example: Thousands of accessory companies make bags under $20, but there are 5,556 Louis Vuitton stores in operation, where the cheapest bag was once reported at $790. Your brand equity can change over time, so this stat is one to check continuously.
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There is so much data available and it is easy to be overwhelmed with information. Instead, focus on the metrics that matter most to your business. If you’re thinking about what to measure, start here: What questions should I answer about my brand and customers? Then look at data to find the answers.