In any business it is important to understand which channel of communication with the client is better fulfilled. Your advertisements or emails can be viewed, clicked on the link, but still not buy. In order not to waste money, you need to be able to count the effectiveness of each channel and choose the performance metrics that brings more money and regular customers.
11 PERFORMANCE METRICS FOR ADVERTISING
It is important to understand what audience, on what platforms and with what offer (offer) to launch advertising. Performance Metrics will help assess how correctly these success components were selected, here you will find 11 performance metrics but we have considered KPI …
CTR (CLICK THROUGH RATE) – THE COEFFICIENT OF CLICKABILITY
Often, using this metric determines the effectiveness of a particular contextual advertising or a whole campaign. You can calculate how effectively a particular banner worked using a simple formula.
CPC (COST PER CLICK) – COST PER CLICK
By placing ads on any resource, you do not follow the frequency of impressions. You important number of people who go to the site. Therefore, choosing a site, watch the conditions: pay for the action, and not for the empty flickering of your banner. You can calculate how much you pay for each person’s entry into the site using CPC.
EMAIL MARKETING METRICS
OR (OPEN RATE) – THE PERCENTAGE OF OPEN LETTERS
With this indicator, you can assess the involvement of your subscribers. It is also a good indicator of the topics of your letters: after all, the letter depends on the topic whether the letter will open or not. OR can be calculated using the formula.
CTR (CLICK THROUGH RATE) – THE COEFFICIENT OF CLICKABILITY
The coefficient of clickability in a letter helps to determine whether your letter is correctly formed: is the information easy to read, how well is it displayed, and most importantly, how much your “call to action” – the words on the transition button are interesting to subscribers.
CR (CONVERSION RATE) – THE RATIO OF PURCHASES FROM LETTERS
Moving to a website from a letter is not a conversion to a purchase. To find out how many of your subscribers are buying during the transition, add utm tags to links and track performance in Google Analytics.
METRICS TO INCREASE REVENUE
CPO (COST PER ORDER) – PURCHASE PRICE
In order not to wake up in a cold sweat from the horror that the advertising budget is spent, and the proceeds are too low, you need to know the cost of the order. It is necessary to keep track of this metric constantly and twist every day. It is considered easy: we divide the money spent on advertising on the total number of orders.
CRR (COST REVENUE RATIO) – THE RATIO OF INCOME AND EXPENDITURE ON ADVERTISING
In Russia, the abbreviation DDR is often used – the share of advertising expenses. This indicator is considered the division of money spent on money earned. It seems so simple, yes? Then let’s take it faster, because it is with this formula that you can clearly understand whether you are moving in the right direction of earning or roll down the slope, merging the budget.
AOV (AVERAGE ORDER VALUE) – AVERAGE BILL
Indicator of the solvency of your audience. Illustrates the ratio of the cost of all completed orders to their quantity. With it, you can predict the store’s revenue (knowing the traffic to the site and the conversion to the purchase), as well as edit the marketing strategy in time. For example, to offer related products to the order, add a button on the site “learn about the receipt of goods”, set up an abandoned basket, etc.
LTV (LIFETIME VALUE) – THE MONEY THAT THE CLIENT BRINGS DURING THE LIFE CYCLE
It is no secret that the client is not eternal, there is a certain life cycle. And your task is to create conditions in which the client can make purchases from you as long as possible. Knowing the value of this indicator, you can tighten the strategy of attracting customers, improve the retention strategy depending on the communication channels, improve the triggers, etc.
SAS RATE (CUSTOMER ACQUISITION COST) – THE COST OF ATTRACTING A NEW CUSTOMER
Calculate how much each new customer costs. Here and advertising, and communication online, and, perhaps, calls the call center. It is important to keep a balance: laying down the budget for attraction is not to be greedy, but not to throw money around. To understand that you are doing everything right, compare the CAC and LTV indicators: the cost of attracting a new client should be significantly lower than the income from it for the entire time.
RR (RETENTION RATE) – CUSTOMER RETENTION RATE
Retaining a customer is much cheaper than attracting a new one. Therefore, Retention Rate is one of the key metrics for an online store. Working on loyalty, helping the client, rather than no matter what, you will not only save money on marketing and advertising, but also launch word of mouth – recommendations that will bring you more income without your direct cash costs.
Checklist for a multi-marketer or what if analytics is not your forte?
- Most of the indicators for evaluating email marketing will be considered by the platform for you. Now almost all services clearly show the percentage of discoveries, clicks, and non-existent addresses.
- Use pass-through analytics software. Analytics program will collect data from your CRM, website, advertising sites and will give the result. For you only making strategic decisions.
- Set your goals in Google Analytics, and better give the setting to the experts – once a well-tuned analyst will bring many right decisions in the future.
- IMPORTANT! No one likes to sit and count, analyze, compare and analyze again (well, almost no one). But without analytics, NO marketing activity is possible. Test, look at the results and improve your performance every day!
We cannot improve all your indicators, but with these performance metrics you will be able to achieve great results with the help of your advertising and email marketing.