Metrics, metrics, metrics. Inbound marketing is obsessed with figures.
And of course, it needs to be. Successes (and failures) are measured in numbers – followers, sales, traffic, open rates, free trial sign-ups, conversions, revenue, etc., etc., etc. Indeed, there is a practically bottomless pit of metrics that can be measured by yourself or your marketing team. And, so long as the numbers are going up, then we all feel happy that we're doing a good job.
In this post we will look into key marketing metrics you should be aware of.
However, there is a problem to this logic. Some numbers are easier to grow than others. You may have had, say, 10,000 new website hits each month in the run-up to Christmas. But, you began the New Year with the launch of your new promotional video, and, long and behold, you enjoyed a traffic increase. 15,000 website hits in the first month of the year, bolstered by a tidy little increase in followers across Twitter and Facebook where you shared the vid. Not too shabby, you think to yourself, and report the figures to your seniors, pleased as punch that your new video marketing initiative has delivered results. But, what does an extra 5,000 website visitors really mean? I mean, really? What does the spike equate to? What is your traffic metric actually telling you? Are they marketing qualified leads?
Well, not a lot in isolation. And it reminds me of the cautionary joke about the modern startup model (and apologies if you’ve heard it before). It goes like this:
10,000 people walk into a bar. No one buys anything. The bar is declared a lavish success.
It’s a good joke, as it illustrates the point succinctly. In isolation, website visitors, Twitter followers, Facebook Likes, video views – they all mean, pretty much, nothing. They are vanity metrics – nothing more.
Now, don’t get us wrong – improved web traffic is important. It is a good thing – even a great thing. However, it’s the context that matters. Boosting traffic is nearly always a company goal at every business. But, how much is it costing the company to increase traffic, and what additional and profitable outcomes are engendered as a result?
5,000 new visitors in January. Great! But, all-told – from the initial meetings, scripting, filming, editing and promoting – that promotional video cost a couple of grand to put together. And, now we’re a week into February, it looks less promising that the website is going to hit 15,000 visits this month. In fact, it will probably be more like 12,000. And, looking ahead, as the video campaign runs its course, by the end of March, traffic will be back down to 10,000 per month again.
Worse – it’s failed to convert anybody.
And so, although the video managed to briefly increase one metric (website traffic), it decreased another (gross profit).
Which is more important to your company?
The Marketing Metrics You Need to Focus On
In truth, marketers need to be tracking all manner of metrics – and website traffic is indeed one of them.
However, there are a few inbound marketing metrics that are really important, as they help marketers understand and meaningfully quantify campaign successes, as well as giving actionable insights as to where improvements need to be made.
ROI (Return on Investment)
Regardless of whether you're using paid advertising or relying entirely on your organic inbound marketing strategy and marketing efforts to generate new traffic, leads and, ultimately, conversions, ROI is always the number one metric that you need to be focussing on, for this is what you will use to measure the value of your return.
All inbound marketing campaigns have one, ultimate purpose – to drive revenue. Now of course, along the road to revenue, you will have to be increasing website traffic, improving lead rate, upping conversion numbers, reducing customer churn, and improving customer lifetime value (CLT). The customer lifetime value is equally as important as the customer acquisition cost and other related metrics.
However, the metric that should be governing all of these efforts is the return on investment. Indeed, this is where your most honed focus should lie.
How much are you spending to improve each metric, and what is the value of the return? If, at any point of the process, the value of the return is negative to the spend, you have successfully identified a critical point for improvement.
And improvement needs to always be the focus when it comes to ROI. Even if the metric is generally positive across most if not all channels, it is only by improving ROI that growth will be enabled.
Not everyone who visits your website could be described as being a real lead. And this, indeed, is why web traffic can very often turn into a meaningless vanity metric unless due attention is paid towards turning that traffic into genuine leads.
A lead is someone who has not just taken a look at your site, but someone who has indicated clearly that they are interested in your specific products and/or services.
This indication may be given through repeated visits (especially to your products page(s)), through the downloading of a key piece of inbound marketing content, or if they match your company’s unique inbound marketing persona descriptions.
Improving lead quality will come down to, indeed, the quality and discoverability of your most valuable inbound marketing content. One of the key purposes of inbound marketing is to educate website visitors as to why they need a service like yours. Blogs, eBooks, research reports, white papers, case studies, videos, infographics – all of these things will improve the quality of your leads, and indeed the quantity of them.
And this is an important marketing metric for the simple reason that customers don't just fall out of the sky – especially if you're in the realms of SaaS or FinTech. In these industries, whether you rely on your sales team or not, you simply don't make sales without first generating leads. On the flip side, the customer lifetime in those industries tends to be great. No, the buyer’s journey is more complicated than that, and in no small part relies on the customer conducting research into your business and your solution – and it’s the job of the inbound marketer to ensure that adequate, quality material is produced and made easily discoverable in order that visitors are transformed first into (quality) sales qualified leads before there is any hope of converting them into paying customers. Lead quality, indeed, is one crucial metric to continuously track and improve.
Back to You
Website traffic, social media followers, video views, Facebook Likes – these, in isolation at least, are your vanity metrics that mean next to nothing on their own. If, as an inbound marketer, all you’re focussing on is improving these figures, then you’re not going to last long.
To make a real difference to your business, if you can take care of improving lead quality and ROI, then real, measurable successes will start coming your way, and everything else will fall into place – and that, indeed, is the secret to good inbound marketing.