Rooted in crafting messages and artwork that appeal to target audiences, marketing professionals have always been a creative bunch. But in recent decades, digital technology has opened new avenues to reach and influence potential customers — and measure the results. This has turned marketers into scientists, running A/B tests and identifying the exact cost per individual transaction, per platform.
As the ability for technology to measure customer interactions with marketing materials has grown, so has the number of buzzy metrics teams can use to define their success. Sales revenue, cost per lead, customer lifetime value, inbound marketing ROI, lead-to-customer ratios, landing page conversion rates and more — taken together, they can all form an impenetrable wall of data noise. So which metrics really matter? And what are marketing teams actually measuring to guide their campaigns?
The answer, of course, largely depends on the product you’re selling. For Farmer’s Fridge, digging into the data behind a new product helped their marketing team save valuable startup cash when they discovered repeat customers often increased their spending without the need for retargeting. Meal delivery kit company Home Chef defines its success around the amount of money it takes to convert a customer — and their value to the company over the long term. And commercial real estate marketing platform Buildout has learned invaluable lessons by experimenting with new metrics and channels in the wake of the COVID-19 pandemic.
The social distancing imposed by the pandemic might have posed a mortal threat to the core business model of Farmer’s Fridge. However, for Head of Brand Marketing Meghan Hurley, the resulting product pivot was just another brand awareness challenge. By watching how the spending of repeat customers increased over time, her team was able to free up marketing budget that might have gone to retargeting and instead focus on acquiring new users.
What are the most important marketing metrics your team tracks, and why are these numbers so important to what you do?
For our new home delivery program, customer acquisition and retention is our focus. In response to the pandemic, in early March we pivoted from selling fresh, healthy food through refrigerated vending machines to delivering it straight to customers’ homes. As we tried to efficiently launch a new business channel, it became extremely important to track how many new customers we acquired and how often they repeated. Managing cash is crucial for a young company like Farmer’s Fridge, so our cost per customer acquisition is something we keep a very close eye on. Initially, we had no idea if customers would like the delivery experience or if they’d try it again after the initial attempt — so repeat rate also became the metric to track to see if the program was resonating.
...Repeat rate became our number one metric to home in on.”
How did you determine which metrics would be most impactful for guiding your marketing strategy? What other stakeholders were involved?
After a few weeks of soft-launching the delivery program to initial success, I worked with our product, analytics and finance teams to determine how we’d measure what success looks like for us. We found that customers that have ordered at least once tend to repeat again and spend more on their order, so being able to convert them into recurring customers is a substantial gain for us. With that in mind, repeat rate became our number one metric to home in on. Basket size is another important metric; if basket size goes up after the first purchase, that lets us know we’re on the right track with our product.
Share an example of how the metrics you track have informed your marketing strategy in either big or small ways. What impact did this have on the business?
We knew that if we could get customers to repeat at least once, they had a high likelihood of doing it again. So we realized that we didn’t need to bend over backwards to reacquire customers who had lapsed with offers or targeted ads. Simple tactics like email reminders to place an order (with no promo code) worked just as well. We also saw that customers had a natural tendency to spread the word about the delivery program through word of mouth, so we created a referral program to make it even easier for them to do so.
For Home Chef, marketing success comes down to two key metrics: the cost per individual conversion and the overall value of the average converted customer. Tracking performance against these two metrics has helped the company identify and double down on successful channels. As VP of Paid Media Shane Smith explained, striking a balance between the two has helped the team find success in the increasingly competitive meal kit delivery market.
What are the most important marketing metrics your team tracks, and why are these numbers so important to what you do?
Cost per action and lifetime value are of paramount importance for us. As a subscription business, we are willing to invest dollars to acquire new customers, but we want to ensure those customers pay back over time and that, ultimately, our investment to acquire them was profitable. We also track various engagement metrics across teams to ensure our advertising and communication is resonating with customers. These include standard marketing metrics like click rate, conversion rate and CPM of media buys, among others.
We fundamentally understand there are certain advertising channels that can deliver customers at a very low CPA.”
How did you determine which metrics would be most impactful for guiding your marketing strategy? What other stakeholders were involved?
In partnership with our colleagues in finance and data analytics, we agreed early on that we needed to invest our marketing dollars responsibly, and CPA and LTV were established as the guiding lights of this strategy. As a startup, we also worked with early investors to incorporate metrics that gave them clarity on our performance and our ability to scale the business.
Share an example of how the metrics you track have informed your marketing strategy in either big or small ways. What impact did this have on the business?
We fundamentally understand there are certain advertising channels that can deliver customers at a very low CPA. However, had we not tracked the LTV of those customers we would have missed the fact that they weren't very loyal customers. Conversely, there are channels where the cost to acquire the customer is high but the customers gained have high lifetime value. Understanding and tracking the balance between the two metrics has allowed us to develop an advertising and communications plan that optimizes for quality customers and profitability.
As the pandemic moved everything from all-hands meetings to team happy hours onto videoconferencing software, companies across industries have turned to webinars as a viable marketing strategy. For Buildout Director of Marketing Ewa Baska, early data from the company’s own webinars convinced her to shift more resources into this channel, while identifying audience segments most likely to convert through the online seminar format. Meanwhile, the commercial real estate marketing firm typically employs a more targeted account-based approach to larger prospects.
What are the most important marketing metrics your team tracks, and why are these numbers so important to what you do?
As an in-house team, we balance new revenue, customer retention, brand building and more — so it’s always important to understand the impact of each project we work on. We look at lead metrics from sales-qualified leads through realized revenue, and focus on Salesforce campaigns to understand the direct marketing attribution to those wins. Once we see which campaigns were effective, we hold them up against operational data like time and resources spent to see if those efforts were valuable enough to pursue something similar again.
As a marketing team, data drives everything we do.”
How did you determine which metrics would be most impactful for guiding your marketing strategy? What other stakeholders were involved?
We’ve implemented a monthly business review program for our company where we collect comprehensive metrics across everything our team touches, then analyze and review them with our executive vice president of operations. The metrics include lead tracking from prospect all the way to revenue, website traffic, email marketing metrics, operational team metrics and Salesforce campaign tracking.
As a marketing team, data drives everything we do. It’s helpful to take a step back each month and make sure we’re listening to the right data and making appropriate strategic decisions based on that. We’ve shifted priorities a number of times since implementing this process, from doubling down on specific segments that were performing better in campaigns and generating more leads to influencing email marketing and social media resource allocation. We’ve learned that the smaller segments of our target audience respond well to typical lead generation strategies like email marketing and webinars, where our bigger, more complex accounts need a more targeted ABM strategy. Analyzing metrics has given us the power to make these strategic decisions.
Share an example of how the metrics you track have informed your marketing strategy in either big or small ways. What impact did this have on the business?
When COVID-19 hit, we had to shift a lot of our strategies — as did many other companies. One of the new channels we tried was hosting live webinars. Because we’re able to report on the leads we get from these webinars via our Salesforce campaigns, we were able to see that some audience segments were converting better than others. Utilizing this data helped us reallocate our team’s time toward the segments that were performing best and achieve our goals faster. We’ve successfully shifted many of our resources, projects and campaigns to this segment, resulting in more leads and higher conversion rates.
