The rapid availability and easy access to data in inbound marketing has led to a veritable flood of performance metrics in recent years. It's easy to get overwhelmed by this wave of information. Focusing on metrics saves time and money. At the same time, their validity as a basis for future decisions depends on the quality of the indicators.
For a targeted selection of the most important inbound marketing metrics, it is advisable to first divide them into two categories. On the one hand, KPIs and metrics that are useful within the marketing team to make decisions on how to proceed with current and planned marketing campaigns and content marketing strategies.
In the other category are KPIs and indicators that can be used at the management level and form the basis for progress monitoring and strategic decisions.
The 5 most important inbound marketing metrics for day-to-day operations.
Let's get started and explore five key metrics that will help you take control of your inbound marketing efforts on a day-to-day basis.
1. keyword ranking - SEO
When optimizing content for search engines, there are a variety of indicators to consider, including number of visits, page views, session duration and bounce rate. However, the most important indicator for SEO is still keyword ranking. With a keyword search engine, it's easy to find the right terms, which you can then use to optimize content and track your ranking results.
2. cost of customer acquisition - PPC
Depending on the value of the keywords you use, the cost of using pay-per-click campaigns can vary greatly. However, a significant advantage is the ability to accurately calculate the cost per customer acquired. With a set budget, the expected leads can be determined. The cost of customer acquisition/cost of generating leads can be calculated accurately with a pay-per-click campaign, so you can keep an eye on the return of investment.
3. click-through rate - email
Click-through rate is the most meaningful KPI when evaluating email campaigns. While the open rate is distorted by the automatic opening of email clients like Outlook, the click-through rate indicates a clear interaction with the content of your email campaign. The evaluation of clicked links provides further valuable insights for the optimization of future campaigns.
4. lead quality - lead generation
When generating leads, quality is the top priority. A large number of leads generated at a low price is often good for statistics, but has no lasting impact on your sales results. Lead quality is therefore a key indicator of measurable success. Lead scoring tools can be used to score leads over the lifetime of the customer relationship.
5. post-engagement - social media.
Inbound marketing activities on social media are often not easy to quantify with metrics. Increased awareness of one's brand, company or product is a goal of social media presence. The measurable indicators of success in this area can include the number of likes for the company, the likes per post (post), or even the engagement of their followers within the posts (engagement). Post engagement, however, has the most significance as a performance indicator. The more interactions a post generates, the more likely it is that other followers will see it.
The 5 most important inbound marketing metrics for management.
Those in leadership positions are grateful for accurate and targeted metrics that allow them to quickly and decisively evaluate a marketing campaign. Detailed KPIs (key performance indicators) are evaluated, processed and condensed into the most fundamental insights within the marketing department. For board members and executives, the cost-benefit ratio (ROI) is the most important indicator for measuring the success of marketing activities and the company as a whole.
1. customer acquisition costs - CAC (Customer Acquisition Cost).
How much does a new customer cost? The head of a marketing department must be able to answer this management question precisely and fact-based. Based on the customer acquisition cost (CAC), the total costs of marketing and sales activities are compared with the number of new customers acquired. The reference period can be based on monthly, quarterly, half-yearly or annual values.
For example, if the quarterly costs for marketing and sales are 100,000 euros and 200 new customers were acquired in the same period, the CAC is 500. For each new customer acquired, the company initially spent 500 euros.
2. customer benefit to customer acquisition cost ratio - LTV:CAC
Whether an acquisition cost of 500 euros for each new customer is a good or a bad value is determined in relation to the value that each new customer represents for the company. To do this, the Lifetime Value (LTV), i.e. the customer value created over the entire duration of the business relationship, is compared with the CAC. LTV is calculated by dividing the revenue generated by the customer (minus the gross margin) over a defined period by the known churn rate of this customer type.
But be careful: the interpretation of the LTV:CAC ratio varies by industry, company phase, and desired growth dynamic. It's best to start by calculating the LTV:CAC indicator for past fiscal years, quarters, and months so you can assess the success of your content and inbound marketing programs based on these past values.
3. payback period of CAC
In cost-benefit analysis for management, the time it takes for a new customer to pay off for the company is an exciting indicator. Especially for companies with lower liquidity, the shortest possible payback period is desirable. The payback period is calculated by dividing the CAC by the average sales (minus gross margin) per month. As a result, you get the value in months at which a new customer becomes profitable for the company.
4. percentage of the new customer acquisition by marketing
The direct contribution of a marketing department and its content and inbound marketing activities to overall sales success can be easily assessed using this indicator. The metric is simple: the higher the percentage of new customer acquisition through content and inbound marketing, the more successful the marketing was compared to other acquisition tools.
5. marketing percentage of CAC
For an even more detailed look at the cost of new customer acquisition, CAC is now compared to total marketing costs. The M%-CAC indicator not only provides information on the percentage of marketing spend during the company's acquisition process, but also provides valuable information on the effectiveness of the efforts compared to other sales tools.
Focusing on these 10 fundamental metrics will help you understand the trends, processes, and successes of your inbound marketing efforts both within your own marketing team and in front of senior management. Based on these meaningful KPIs, current and future campaigns can be effectively controlled and optimized.