As we move into a new year, you might be wondering what marketing metrics are current and which ones you should say goodbye to in 2020. If you let some of them go, what should you replace them with? After all, it’s important to keep a handle on the data available and make the best marketing decisions possible for your brand.
The total amount spent on marketing globally is predicted to reach $1.3 trillion in 2020. While that number includes all types of advertising and public relations, you can see that marketing is a big industry. If you don’t spend your money wisely, you could easily get lost in the clamor of all the other companies seeking consumer attention.
As we march into an ever-changing world of technological advances, the landscape of business is evolving rapidly. No longer do older methods of metrics still work the way they once did. Sometimes they will, but sometimes they won’t. Here are five marketing metrics you may want to wave bye-bye to and what you should use instead.
1. Market Share
Market share once served as a key performance indicator (KPI) for companies. However, new companies emerge almost constantly, and the market shifts on a whim. Automation and unique production methods, such as 3D, are bringing costs down and increasing profit share. A business that sells fewer units than another may make more money because their expenses are much lower and their profit margins higher.
One example of this can be seen with the company Tesla. If one only looks at market share, Tesla appears to be behind the curve of competitors such as Renault-Nissan because that brand sold 1.5 times more units.
However, Tesla has a gross margin that is around 25%, which puts it twice as high as the profit margins from brands such as Ford and GM. Looking at the share of profit rather than that of the market is a better metric in this instance.
2. Mean Time to Resolve
One measure used by IT and customer service departments is tracking how long it takes to resolve an issue. This can apply to marketing as well, as far as how long it takes to close a sale or fix a customer’s problem.
However, the mean time to resolve isn’t a good indicator of overall marketing performance. It is sometimes almost impossible to tell how long it takes for a campaign to be effective. Mean time should be thrown out the window with other archaic methods.
Instead, companies should look at how effective the resolutions are and how satisfied the target audience is with the solution.
Obviously, you don’t want to completely throw out clickthrough rates. This helps you see how ads are performing and how many people visit your website or read your offer. However, clickthroughs aren’t very effective if people land on your page and then bounce away again. Instead, look at how many people fill out the contact form or request a quote.
It’s easy enough to create a specific landing page for each campaign and then track how many visitors take the desired action. If your numbers are lower than you’d like, the fault might be in the marketing and hitting the right target audience. On the other hand, your landing pages may need work. Test both and see where you can make improvements to get the return on investment (ROI) you want.
If you had a million impressions on social media, did they result in any sales? For marketing campaigns to be truly effective, there must be concrete, measurable results in the form of leads, sales or newsletter subscribers.
A better measure of how successful your social media marketing lies in the engagement of users. How many people are liking your posts? Are there comments? Are people sharing what you put up? If you answered no, then your social media campaigns need work.
5. Cost Per Lead
This is a tricky one. You do need to have an idea of how much it costs you to develop a new lead, or you may wind up spending money where you shouldn’t. However, simply going with the cheapest places to advertise may not bring in the results you’d like.
There are several factors you must consider when looking at acquisition. Cost per lead is just the beginning of the equation. You then must look at the quality of the leads generated from each marketing channel.
Consider elements such as how many of those leads become customers. How long does someone remain a client, and what amount are they worth over the lifetime of their relationship with you? Are your leads who turn into customers sending other people your way? How much is that worth?
As you can see, cost per lead isn’t something you should necessarily do away with. However, you shouldn’t focus all your attention on that one element when there are so many different indicators that come into play.
Try New Things
If something works well for your company model, even if it is listed as outdated, you should keep it. However, don’t be afraid to study new metrics along the way.
Try new tools as they become available. Automate what you can with artificial intelligence (AI) and other emerging technology. Be adventurous and watch your marketing improve over time.