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If you intend to have your own online business, you need to have an entrepreneur’s mindset. This means setting goals, learning how to measure and understand some digital marketing metrics to achieve success in your actions, and being able to monitor your results.
Being able to understand the meaning of each piece of information generated by your business is essential. This will help you to assess what is working out in your strategies, and what isn’t. However, before you analyze the results, it is important to understand what it is that you need to assess.
Metrics are everything you can measure in a determined universe. Dimension is the set of metrics.
But what does that mean?
Think about the volume of the trees in a forest. In this example, the number of trees is a metric, whereas the size of the forest with its trees is a dimension.
And why do you need to know this to create and sell digital products? This is what we will explain to you, and show the main digital marketing metrics you should keep an eye on to improve your marketing strategies!
Creating high-quality products is fundamental for your business to work well. However, you can’t simply count on the luck of having something well-done. It is necessary to pay close attention to some processes that can measure everything you do.
Good content marketing is the one concerned with performance and results. And that’s why it’s important to think about digital marketing metrics.
One of the big mistakes made by people thinking about this kind of marketing strategy is to measure nothing. However, measuring too much is also counterproductive, because it complicates processes too much. It is, therefore, necessary to find the middle ground in the frequency and quantity of measuring.
To determine this balance in what needs to be measured, you need:
- To formulate a hypothesis;
- Test what you had predicted;
- Monitor the metrics to see what improved and what got worse;
- From these assessments, set the frequency of the measurements. This is paramount so you can make the necessary adjustments.
Moreover, it is important to determine how to achieve your goals and document all the strategies that will be used. Then, you will be able to verify what didn’t work and adjust the results so you don’t make the same mistake again. Or even the opposite: you can repeat strategies that have worked, and make minor adjustments to improve their efficiency more and more.
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Even before you see what the main digital marketing metrics every creator should keep an eye on are, it is necessary to tell them apart from the KPIs.
KPI, or Key Performance Indicator, is what measures the performance of all the processes used by a company to achieve their initial goals.
Thus, KPI is the indicator that shows if your product or service has been able to achieve the initial goal you set. It is created having the metrics as a basis and has as its objective to show, mathematically, if a certain goal was met.
Metrics, on the other hand, are clear, simple, and objective ways of monitoring and analyzing strategic processes. With them, it is possible to measure the behavior of users on your pages. Therefore, they are indicators that show the engagement of the buyer persona in each campaign.
A good metric is one that is:
- Punctual: that is, a result that arrives at the right time;
- Relevant: it needs to show results that are actually interesting and important for your business;
- Useful: it is necessary that the metric provides useful data at that specific moment of analysis;
- Uncomplicated: when you look at the results, you need to understand what they’re for. That’s why you need to use simple terms that help in understanding.
To better understand these differences, check out a few examples of the most commonly used KPIs and digital marketing metrics:
- Time user spent on the website;
- Sales conversion rate;
- Total income divided by the total number of sales (average ticket);
- The number of newsletter subscribers.
- Customer Acquisition Cost (CAC);
- Lifetime Value (LTV);
- Return on Investment (ROI);
- Bounce Rate.
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If you want to achieve good final results, you need to put a lot of dedication into following what happens in your business and website closely.
Not knowing how to analyze the results correctly can lead you to make poor decisions for your next actions. This can compromise the proper functioning of the structure you already have.
Before you make any changes, you need to determine what your objectives are. Knowing what you want to achieve will help you choose specific metrics, which in turn will mean concrete and correct improvements.
Some of the main objectives of content marketing are:
- Brand recognition as an authority on the subject;
- Audience’s engagement with the brand;
- Customer retention;
- Lead generation and new buyers;
- Educating the market;
- Assist with sales.
However, the choice of your objectives depends greatly on your service or product. Therefore, each business may have a different objective. The important thing is knowing how to choose it carefully in order to better understand which results you will have to measure.
Also, measuring is something that you need to do constantly. You shouldn’t analyze your numbers just after finishing taking an action. Use the digital marketing metrics in the creation, performance, and finalizing of everything you do. Then you guarantee that the results are efficient and objective.
1. CAC (Customer Acquisition Cost)
CAC is a metric that determines the amount spent to bring a new customer to your brand. That is, it is the price of each new customer you acquire from your marketing strategy. That’s why the customer acquisition cost is directly influenced by your marketing actions.
This metric is calculated by adding the sales cost to the marketing cost.
If the CAC is high, it means you need to rethink your marketing strategies and analyze if it is really worth it to sell certain services or products.
But if you get a low customer acquisition cost, it means that your marketing strategies are working well. Then it’s time to decide if you can improve that even more. After all, even for something that is working out, you can always think of new ways to make it even better.
2. LTV (Lifetime value)
The customer lifetime value (LTV) shows how much the customer provides in net profit for the company.
Do you know how much time each customer spends with your brand? And how much money do they spend throughout the interaction with your products or services?
Knowing what these numbers are leads to understanding the possible income and future profit that can be achieved by having one customer. In other words, it is the net profit from each person for the time spent in contact with your brand.
LTV is calculated by multiplying the customer average ticket by the recurrence of these purchases during the months spent as a customer.
3. ROI (Return on Investment)
Understanding what was the return on the investment is knowing if your product or service managed to make a profit after all the money you spent on it. In a word, it means to quantify how much you earned for every dollar you spent.
This is a simplified and general metric in financial performance that analyzes the rentability of your investment. That is, its objective is to measure if what you did actually generated a positive return.
To measure ROI you need to subtract the total amount of investment from the net income, and divide the result by the investment once again, then multiply it by 100, as shown in the formula below:
4. Bounce Rate
With this metric, you are able to identify the number of visitors that accessed your page only once and, for some reason, didn’t stay. Quantifying the number of single accesses is important so you see if your website or blog has good usability.
If the bounce rate is high, you need to come up with ideas to improve the user experience on your pages. Therefore, you will increase the time spent on your website, which may turn them into visitors, leads, or even customers.
If you got this far, you understood that it is important to set goals and measure your results to achieve what you wanted from the start.
Now, what? What can you do with all these metrics?
An important tip is: connect all the right dots (in the graphs and data you obtained) to manage to correctly solve all your problems!
After that, you can follow these 4 steps to better identify the changes that need to be made:
- Define and write down what the problem in your business is;
- Think as hard as you can to come up with solutions;
- Determine the solution you will put into practice;
- Put it into practice!
As soon as the new strategies are put into action, remember to measure them again. If you don’t get the expected results, use other solutions you had already thought of.
The secret of your success is to do and test everything you’ve got. Then you can compare what went right to what didn’t, to find the perfect solution for your audience!