It sounds like a simple question, doesn’t it? But the truth is, there are so many ways you can slice and dice your marketing efforts so we don’t have a simple answer for you, we have many answers.

The good news is that if you’re searching for an answer to this question, you already understand that measuring your marketing efforts is important. The way to take marketing from a cost center to a revenue driver is measurement. Otherwise, you’re just throwing mud at the wall!

So, knowing measurement’s importance, we encourage you to break it down into sections, and don’t try to think of it all at once, or you’ll get overwhelmed. Conversely, though, don’t also look at your measurement in a silo. The magic of data is only unlocked with the power of context. Our list here is thorough, but not entirely comprehensive, which is just a testament to how many different angles you can take with marketing measurement. Your business may require some more granular analysis, but for most small businesses, especially those just starting out, here’s your starting point:

Measuring Your New Customers

Let’s start with an area that you’re probably most interested in: your new customers. 

# of new leads

• Do you have a method for counting how many new leads you’re bringing in for your business? If not, start there.
  • How many new leads are you getting each day, each month, each quarter, each year? Track this now, so that you can start to learn year-over-year and seasonal patterns.

How many leads are you converting into customers? (Your conversion rate)

• Once you understand what your best conversion rate is for turning leads into customers, you can work backwards to put the whole puzzle together to understand how many leads you need to bring in, and convert to your desired number of customers to meet your business goals. 
  • Don’t know what a standard conversion rate is for your industry? Look up online “benchmark sales conversion for _____ business.” There’s so much information out there that you can use to gauge whether or not you’re on track. 

What is your current cost per lead?

• Cost per lead can be determined simply by taking the amount you spent on marketing to obtain that lead, divided by how many leads you received from that marketing campaign. 
  • You can look at your total cost per lead for a given month, or quarter, or year. And then you can also break down your cost per lead in different categories, like the cost per leads you get through email, cost per leads from a magazine ad campaign, from an event, etc. 
  • This is another area where it’s easy to find industry benchmarks online to learn if you’re spending too much or too little per lead. 
    • Your cost per lead rising on you is often the first red flag that your marketing efforts aren’t going as planned, and should be re-assessed. 

Measuring Your Existing Customers

We’re getting to our favorite area of measurement quickly! If you’ve read any of our other blog posts, you know that our whole mantra is “plug the bucket” and focus your marketing efforts on retaining those hard-won existing customers, over chasing new people. Here’s some ways you can measure these retention efforts. 

What is your customer retention rate?

Here’s another straightforward formula for ya: Customer retention rate equals customers at the end of a period minus number of new customers gained during that period divided by the number of customers at the start of the period.

• In plain money terms, you want your customer retention rate to be high because you don’t want to be wasting your marketing spend on people who cycle in, and then cycle immediately out. 
  • The higher your retention rate is, the less money you need to spend on new customers.
  • Loyal customers are also more likely to make repeat purchases, and higher value purchases too.
    • Don’t know what a “good” customer retention rate is for your business? There’s plenty of research on that. 

Customer Lifetime Value

Speaking of repeat purchases! Customer lifetime value (CLV or CLTV) is a metric that indicates the total revenue a business can reasonably expect from a single customer throughout the business relationship.

We love retention efforts because they help you build relationships with customers, therefore making it more likely that they will become both repeat purchasers and longer-term customers.

• Your customer lifetime value can be determined by multiplying your average customer value by the average lifespan of your customer.
  • Building that relationship will create more purchase opportunities, in turn increasing that average customer value. Plus, it will keep them around longer, which will increase longer average lifespan. 
  • The bigger the gap between your CLV and your spending on sales and marketing, the more profitable your business will be!

Measuring Your Individual Marketing Channels

Once you’re in the habit of measuring your big picture key performance indicators like your leads, cost per lead, retention and customer lifetime value, you can start to dial in on your individual channels to understand how effectively they’re working for you. 

Measuring Your Website Performance

Your website should be the main terminal for your business, where your traffic flows through, people make pit stops and purchases, and stop at the information desk before heading to their next destination. Measure your website performance, so you can understand if what’s often the biggest investment for a small business is running on all cylinders. 

• Visitors – the individuals who land on your website. 
  • Not to be confused with sessions, which are the total visits to your site, even visitors who visit multiple times.
• Page visits – how many total pages your website visitors checked out, and also how many times each page was looked at.
  • Page visits can help you understand what pages, products, blog posts and other website features are drawing the most attention.
• Time on page – how long people are spending time on your website.
  • Your time on page should be considered in context with other website stats. This is because a long time on page could indicate that your content is very interesting and engaging, however, it could also mean that information is difficult to find on your site.
• Engagements – These are the actions people take on your website. If you’re using Google Analytics to measure your website, they call them Events.
  • Engagements/events can be whatever you’d like them to be. Whatever is important to your business. This could be clicks on your phone number to call. Or video plays. Or form submissions.

Measuring Your SEO Performance

Search Engine Optimization includes a series of small tweaks you can make to your website over a period of usually six to nine months that help your website gain a higher position in search rankings. SEO takes time and patience, which is why it’s a great thing to measure, so you know your efforts are working.

• Your ranking for your top keywords – this is what position in search results you are appearing for certain keywords related to your business.
  • Dashboards like Google Search Console, as well as simply Googling your keyword of choice, can help you identify where in the search results your website is showing for said keywords. The unfortunate truth is that the vast majority of Google searches don’t go past the first page of results, so you’ll want to strive to get there if you want people to see your content.
• The number of organic visitors to your website – People can visit your website from many different sources, so to measure your SEO efforts, look at if your organic visitors are increasing.
  • We like to use either Google Search Console or Google Analytics to view this information. A healthy organic search presence would include about 50 percent or more visitors from Organic. 
• How many backlinks you have – These are the links to your website from other websites.
  • Over the years, there’s been conflicting information from Google about how important having backlinks to your website is when it comes to increasing your organic search position. While they may not be considered a top 3 important ranking factor anymore, Google still agrees that increasing your number of backlinks from quality websites still positively affects your search rankings.
    • The truth is, there’s no real magic way to get backlinks from quality websites. You just need to find relevant sites that may want to link to yours and email them to ask. Maybe that’s your local Chamber of Commerce, or a blogger who focuses on your industry. Since it’s widely known that backlinks increase website performance, people are usually cool about the request, maybe in exchange for a backlink for themselves too. 
• Your Google Business Profile activity – this includes the plethora of activity that people can partake in on your Google Business Profile without ever needing to visit your website.
  • On your Google Business profile people can call, get directions, click on posts, visit your website, and ask questions! Tons of engagement that can only be measured on your Business Profile

Measuring Your Email Marketing

Emails are an excellent driver of website traffic and purchase activity, so you’ll want to keep tabs on your efforts to send product emails, newsletters, event invites, or whatever email may be coming from your business to your subscribed audience.

• Subscribers – the number of people who have opted in to hearing from you regularly
  • Your number of subscribers is obviously a big one to measure because a robust audience list with many subscribers means the more opportunity to build relationships with your business and sell your products or services.
  • You’ll want to look at how many new subscribers you’re gaining each month, or quarter, or year, and also how many subscribers you are losing via an unsubscribe. 
    • A healthy rate of subscribers means the message you’re putting out there is resonating with folks, and the content you’re sending them is valuable. Compared to an influx in unsubscribes would indicate that your content is not useful. 
    • One note about subscribers though: sometimes your number of subscribers may go down because you spend some time “cleaning” your list to remove unengaged people, and email addresses that don’t work, or have typos in them. That’s perfectly OK too, because a smaller list of engaged folks will go a lot further than a huge list where no one opens your emails. 
• Open rate – the percentage of your subscriber list who opens your email when it hits their inbox.
• Click through rate (CTR) – your click through rate is the rate in which your email readers click the various links you include in your email to go through to your website, or the final destination.
  • Again, if people are clicking the links in your email and visiting those pages on your website, it’s a good indicator that your content is valuable and interesting.

Measuring Your Social Media

You should be able to identify all the below numbers for Facebook and Instagram using the business dashboard for Instagram, as well as Insights through Meta. Pinterest has their own dashboard, and so do Linkedin and Tik Tok.

• Reach vs impressions – These two metrics sound similar and they are with a slight difference: Reach is how many different accounts you possibly showed up for. Impressions are how many times you actually showed up, including duplicate times.
  • Does this mean that 10,000 people saw your post and are now expected to be customers? No. Just because you showed up in their Instagram feed, or stories, doesn’t mean they actually lingered on, and registered your content.
• Followers gained – the number of new people who are choosing to follow your profile. We prefer more purposeful actions like followers gained and the engagement on your posts to reach and impressions because they are a better indicator of interest in your brand.
  • One caveat about your followers: because Meta is increasingly pushing their paid services, they’re sacrificing your organic reach. Just because you have 2,000 followers, doesn’t mean that 2,000 people see each post you make.
    • Most, if not all, social media platforms allow you to “boost” your posts to reach more people nowadays, which means adding a credit card to your account and spending some money on them to get more eyeballs on them.
• Audience engagement – there are several ways your followers can engage with your posts, depending on your platform, but all of them indicate a good recognition of your business and your brand.
  • Engagement numbers you can track include post likes, reposts, saves (we love saves because they mean people want to save your posts to refer to later), shares (also a great one), comments, pins if you’re on Pinterest, and several more iterations of more of the same. 
• Profile views – the number of times someone clicked from your post to look at your profile
  • We’re also a fan of profile views because once again, this is a purposeful action like an engagement. Someone has seen your post, and instead of just scrolling past it, they decided to click to view your profile. Hopefully they followed you too!
• Clicks to your website – the number of times someone clicked from your profile to your website following a link you have in your post, or your bio. Once again, a very purposeful action. Tracking clicks to your website from your posts shows you how many people are doing some fact-finding after noticing you on social media. They could even be making a purchase, depending on what link you posted!

One Last Measurement (For Good Measure) (See What We Did There?)

Whew! That was so much measurement. And when the numbers look good, that’s great! You think. So we’re gonna throw one last measurement at you that can help you benchmark your efforts: Marketing Efficiency Ratio (MER). Your marketing efficiency ratio will help you calculate how much money is generated from every marketing dollar spent.

Marketing Efficiency Ratio: Total Sales Revenue Over a Period / Total Marketing Spend Across All Channels Over The Same Period

Generally, you’re hoping for a MER of 3-5. If you’re under 3, you know that your marketing spend is taking up a bit too much of your revenue and you need to make some changes to become more efficient with your marketing. If you’re over 5, maybe consider increasing your marketing costs to see how far that can take you without losing ground.

Thanks for hanging out with us as we explored the topic of marketing measurement! We hope that you are energized to measure your marketing efforts, and that we didn’t make your head spin. It’s important to note as you embark on your measurement journey that numbers don’t mean anything without analysis and an understanding of how they fit into your overall strategy. If you are looking for help executing and analyzing these efforts, shoot us an email, we love this stuff.