The world of business is complicated. Numbers, charts and percentages can be produced constantly in an endlessly effort to quantify the minor details of campaigns, and this overflow of information can sometimes draw you away from your business’s basic goals and most primary results. While detailed analysis is a wonderful asset if you have the time and resources to do it correctly, these 3 important marketing metrics are some of the most fundamental statistics that really matter when you’re trying to get a basic grasp on the success of your marketing efforts.
Important Marketing Metrics That are Essential to Business Growth
Cost-Per-Acquisition (CPA) –
Essentially, your company’s CPA is the average amount of money you spend in acquiring one customer. This metric allows you to clearly see how effective your marketing strategy is. If your costs in obtaining each individual customer is astronomical, some part of your marketing must not be effective or is, in the least, costing you too much. Bringing this metric lower will not only allow you to earn more money per customer, but will ultimately allow you to spend more on marketing to increase your exposure and further expand your customer base.
Ratio of Customer Payback to CPA –
If you are spending more money generating new customers than you are receiving back in profits from their business, then you are obviously wasting your money. By calculating your profits on what customers spend on your products and services and considering that number in relation to how much you pay to obtain their business, you can draw clear plans for how to move forward in the future. This metric will allow you to form a rough sketch of how your business can grow by showing you whether you need to implement some new changes in order to balance this ratio. Ultimately, good, balanced business is about give and take. Utilizing and optimizing that principle will allow quick growth for your company…but not without the necessary metrics to guide your decisions making process.
Remuneration Time –
Put simply, this is the time it takes you to get your money back. Most of the time, customers will not pay back the marketing cost you invested into them in one transaction, but rather, that amount will be redeemed over the course of a several transactions or even over the course of an entire contract. Subscription services especially need to be aware of this metric since much of their business is based upon it. Of course, ideally you want to start gaining profit on a customer as soon as possible. However, remember that by raising prices to lower remuneration time you can also risk driving customers away. This is a tricky balance to maintain, but an important one to consider.
Do not let these important marketing metrics be lost in the flood of numbers that barrage you in regards to the success and status of your business. By neglecting these metrics, you neglect the very foundation of your business and the tools by which you will be able to measure and achieve success in the future. On the other hand, though, by optimizing each of these metrics, you can work towards efficiency and growth that will draw more customers to you as you maximize profitability.