By now, most CMOs are aware of the most basic campaign metrics. Click to Open Rates (CTOR) measure how many visitors acted after seeing an ad. Cost Per Impression helps you compare how people viewed your ads across various campaigns and channels. Cost Per Click (CPC) tells you how much you’re paying to get a response (either within a single campaign or across different campaigns and channels). When combined with other metrics, these measurements help marketers better understand the effectiveness of their efforts, while providing a solid foundation for future decisions.
Through accurate measurement, marketing can become a “science” that produces a solid ROI (rather than being unpredictable, or even worse, a waste of valuable time). For this reason, marketers must be able to think beyond basic campaign metrics and incorporate these additional four metrics into their strategies:
1. The Lifetime Value of Your Customer
Consider this your starting point and end goal. Without a solid handle on this metric, you’ll never be able to properly target, service, and cater to your ideal customer. Go beyond the initial “touch point” and follow your customer through the entire sales and marketing process to determine where the value truly lies (this will also dictate your upfront strategies). Understand, for example, that pulling in a customer quickly via an initial media strategy may not necessarily yield a long-term customer for your brand. The easiest way to determine a customer’s lifetime value is by factoring in all of the sales that a particular user will engage in over the course of your relationship.
2. Your Online and Offline Bounce Rate
Sure you want to know how many people are engaging with and responding to your online and offline media strategies, but exactly how many of them didn’t convert to customers (for whatever reason) can be a very telling metric. Put simply, the bounce rate tells you how many visitors leave your website or turn off your commercial before taking further action to buy (or, learn more). A potential customer who views your direct response commercial on TV and then visits your URL for more information, but who then leaves the site before “clicking” on any specific pages, has effectively “bounced.” Your goal should be to have the lowest bounce rate possible because the longer someone engages with your brand, the more likely it is that you’ll convert him or her into a customer.