Lou Holtz, the famous football coach, once said: “In this world, you’re either growing or you’re dying…” The same holds true for every business both large and small. If you’re growing your business is healthy. If you shrinking, there’s a problem. The third option, stagnation, is worst of all. Once a business, like a body, stops growing, it is only a matter of time before it starts dying off.
Businesses are complicated things, and cannot always be completely observed from an office. In order to understand if any aspect of your business is helping you grow, or shrink, you need to have good metrics. Your metrics allow you to understand where your company is flourishing. Your metrics allow you to examine exactly why a particular campaign succeeded.
Perhaps more importantly though, they also allow you to see exactly where a problem lies, should one occur. Clear and concise metrics are essential to your marketing campaign as they are to any other part of your business. In order to have solid metrics, you need to understand why you need them, how to create them, and how to use the information they yield.
Knowing when enough is enough
A marketing campaign may look like a flyer in the mailbox, or an email and inbox. However, nothing in the business world is that. A marketing campaign is dozens of moving parts all synchronized to produce the desired results. In some projects, waiting until the end is acceptable to judge the effectiveness of the campaign. However, the marketing campaign involves a lot of time, resources, and money.
If a campaign is launched without metrics, it is more than likely that something will go sideways. If something goes wrong, in the company doesn’t find out about it until the very end of the process, then the damage is done and may be irreparable. Metrics allow step-by-step judgment of successes or failures. They like a warning flag that goes up in case something isn’t producing as well as it should be expected. A good metric is not simply, “let’s wait to the end and see what happens”. Rather, a metric is an increment, a step in the process. A good metrics says, “we should have this many sales, by this point in time.”
This metric allows the user to judge the relative success or failure of the process thus far. If successful, the user will be able to make changes accordingly. If failed, then problems can be diagnosed early when it is easier and less painful to fix them. A metric isn’t just another step getting in the way of completing your plan, it’s a prudent attribute to a well-made campaign.
What a Good Metric Looks Like?
When it comes to a response to your marketing campaign, and not all responses are equal. There are three types of responses, each with its own value, and none can be ignored.
Gross Response Rate:
The gross response rate is the total number of people who were brought to your site because of your marketing campaign. These people are counted whether they buy something or not. Just because they don’t buy something doesn’t mean they are useless to your company. Because they didn’t buy anything you do not know what their intentions are. Your campaign may spark curiosity. It may have made them aware of your product with an intention to buy for someone else. Or maybe until today they never realized what they were missing. This form of response can take many forms. Because of your marketing campaign, someone went to your website to check things out. Because of your campaign, a potential future client called your front desk and discovered your fantastic customer support. Or because if your brilliant marketing, somebody decided to mail your form back asking for more information. The sale is an important metric, but the gross response cannot be underrated.
Net Response Rate:
The net response is the people who actually decide to purchase from your company because of the campaign, also known as conversions. No matter what the initial responses, the net response is what keeps your business successful. Bringing gross response to the net response is known as a conversion rate. A business with a high conversion rate is a successful business. An investigation as to why people are responding, but not necessarily buying anything, as well as time and money.
Cost per acquisition:
This metric is where customer service meets cold hard math. In order to understand whether or not a marketing campaign was successful, you need to know how much each new customer cost to obtain. If each new customer only spends $10, and it costs 15 to obtain them, then that marketing campaign was not successful at all. This is known as cost per acquisition, and this is where the fine tuning of a marketing campaign can take place. When you begin, you need to have a good idea of what you want your cost per acquisition to be. That way if it’s too high, that will be that will serve as a red flag that something is going wrong. Then you can adjust accordingly. If it’s low, then at a glance you can tell that your marketing campaign was very successful indeed.
Marketing Metrics, Micromanaging?
It may seem as though managing every detail is overkill. After all, running a business isn’t easy, and you are ready don’t have enough time in the day to deal with all the other details. It may seem tempting to set a marketing campaign and forget it. This is at best a risky proposition, and at worst a fatal oversight. Metrics are like a weekly status report, allowing to make changes as issues come up. If you personally don’t want to oversee every last detail of your marketing campaign, that it is imperative that you enlist the help of a company. There are several talent companies, full of talented people, who are willing to help move your business into the next phase. However, if you choose to ignore your marketing campaign, your customers will be more than happy to follow suit.