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Any business idea is just an idea. It won’t grow into a successful business without proper execution. The success of a business comes down to a number of key decisions. To understandably make an informed decision, one must curate significant data. An integrated study by Google has shared that 53% of marketers adhere to well-established metrics that work integrated into business objectives. As a result, such organizations will likely achieve their goals 3 times.
Aspects like how to structure your website, what digital marketing efforts to employ, what ad campaigns to run, and how much budget to allocate to them, any of these decisions can make or break your business.
The rightly employed tool, integrated to maximize the effectiveness of the data, can help outperform revenue goals. The same research has also revealed that 26% of marketers believe marketing analytics tools that are integrated well and work seamlessly together can assist marketers in overcoming hurdles and going beyond their revenue goals.
Another research by Google has revealed that a complete marketing analytics stack of five or more tools will result in 39% more improvement in the overall performance of the marketing program. Therefore, to grow your business and make it efficient, gathering and analyzing the right data is key to making decisions that move your business forward.
Who should be thinking about marketing data and analytics?
Marketing analytics are beneficial to all businesses. Every organization, from multinational corporations to family restaurants and owner-operated e-commerce stores, can profit from documenting and analyzing data.
Marketing data analytics isn’t as expensive as it was twenty or even ten years ago. For a smaller-sized company, data analytics can be as simple as importing data from Google Analytics and Facebook Ads into one spreadsheet and running data visualization on it.
This simple solution will probably cost you no more than $100 in monthly fees.
So every business, no matter how big or small, should consider incorporating marketing analytics into their decision-making process.
Common marketing analytics pitfalls
Often, when companies are gathering marketing data, it's not processed properly, jeopardizing the quality of the insights derived from that data. One approach to address this issue is by generating synthetic data, which can be used to anonymize, explore and simulate data.
The most common mistake occurs at the point of data collection. If you insert the tracking tag incorrectly or configure the tracking in the wrong way, you’re going to have faulty data enter the data pipeline.
The same goes for any data that enters the pipeline through manual entry. If your organization does not have a well-defined rulebook on data entry, you run the risk of the data being entered incorrectly or of different employees using vastly different formats.
All of this results in data that may be incorrect or hard to bring up to standard.
Even if the data quality is fairly decent, a common mistake that often occurs in many organizations is focusing on the wrong key performance indicators (KPIs) or reading the KPIs in the wrong way. For instance, believing your company was in a decline when it was just the effect of seasonal changes in demand.
Save for that and configuring data analytics incorrectly, focusing on the wrong metrics is one of the biggest mistakes. If you have all the marketing data well structured and analyzed but look at the wrong metrics or don’t take action on insights, the effectiveness of the marketing data analytics is minimal.
So what metrics should you focus on? Here are the seven most prominent areas of any organization, along with some of the key metrics you should track.
How to set up marketing analytics tracking
The effectiveness of marketing analytics relies on both the data being correct and tracking the right digital marketing KPIs. Let’s take a look at the most important and reliable digital marketing metrics you can track.
The most general metrics that can tell a lot about a company’s health lie in marketing and sales. These six metrics will illustrate what your sales pipeline looks like.
- Marketing Qualified Leads (MQLs)
- Sales Qualified Leads (SQLs) & Sales Accepted Leads (SALs)
- Upsells, Cross-sells, and Down-sells
- Average deal size or ARR
- Marketing performance
- Brand sentiment
The first two metrics paint a more detailed picture of the sales funnel, showing you how many leads are at each of its stages. This could lead you to a problem somewhere in the pipeline where productivity could be optimized.
The next two give you a broad picture of what your financials look like with each client. If you run an e-commerce store, use the average deal size. If your business operates on a subscription basis, use ARR or MRR — annual or monthly recurring revenue.
Lastly, monitoring marketing performance by looking at how many clients each marketing channel brings gives you a full picture of your marketing spend, especially if it’s paired with the ad spend of each channel. Brand sentiment or brand awareness is one of the unseen results of marketing that is hard to account for but worth measuring regardless.
If your business runs on a subscription model, it is very important to track customer retention metrics. Start with tracking these seven.
- Customer Retention Rate
- Customer churn rate (CCR)
- Existing Customer Growth Rate
- Repeat Purchase Ration
- Customer Lifetime Value (LTV)
- Customer satisfaction (CSAT) score
- Net promoter score (NPS)
The first five digital marketing metrics cover the financial basics of a SaaS company — how much monthly revenue your company is receiving and how much revenue each customer is going to bring you before they stop using your services.
The latter two are complementary metrics that measure how satisfied customers are with your service.
All these usage metrics are rather tricky to calculate. For instance, calculating CCR requires you to gather data on new, existing, and lost business for multiple periods and run the data through an analytics tool.
If you don’t want to configure all of this on your own, try using Xoxoday’s customer data insights. It automatically calculates all the key digital marketing metrics based on your data, saving you hours of work. It can also generate good-looking reports fast.
If organic search is a part of your marketing strategy, you have to track a couple of key SEO metrics to see if your website is performing well. These are the core metrics you should focus on, delving deeper than that should be left to the specialists.
- Organic traffic
- Keyword rankings
- Search engine visibility
With most other types of digital marketing metrics, you can get usage data from the app — ad campaign performance data is accessible in Meta or Google Ads, and sales data through a vendor platform like Salesforce. SEO data is much harder to get because it’s not always recorded on your website.
You can get traffic data from Google Analytics, but data such as the number of keywords you rank for can only be obtained by parsing the SERP. SE Ranking is a tool that handles all of that, including monitoring keyword rank data, and presents it to you in an easy-to-understand manner. You’ll be able to keep track of your positions, identify keywords that bring the most traffic, and prevent traffic loss.
If you want to build a data-driven SEO strategy, this tool is indispensable.
Paid advertising metrics
SEO might not be for everyone, but most businesses have to run Google Ads to drive traffic and clients. If you do, make sure you collect all the data on your campaign performance from Google Ads to run an analysis later. You’ll need to have at least these six values in your database.
- CPM (cost-per-thousand impressions)
- CPC (cost-per-click)
- CPA (Average cost-per-acquisition)
- Bounce rate
- ROAS (return on advertising spend)
The same goes for any other advertising media you use, be it LinkedIn, Facebook, or Instagram.
Email marketing metrics
Almost any online business conducts email marketing, whether it’s a newsletter full of engaging content and tips or information about sales. Measuring some email marketing metrics is impossible without the proper tool.
Mailchimp is probably the most popular email marketing platform, and it records all the important metrics. For instance, it records the open rate by adding a special webhook to each email that’s sent, something that’s impossible when you’re just sending through Gmail.
You should look at these six core digital marketing metrics to determine the effectiveness of your email marketing campaigns.
- Click-through rate (CTR)
- Conversion Rate
- Bounce Rate
- List Growth Rate
- Open Rate
- Unsubscribe Rate
Social media metrics
Social media can be both inbound and outbound, meaning you can run ads and also create content to draw in audiences. You have to track digital marketing metrics for both types of marketing.
You can track most of these metrics with native tools built into your social media business admin page. Another option is to use Hootsuite Social Advertising. The platform allows for social listening and tracking metrics for paid and organic social media marketing across multiple platforms. You’ll want to record these eight digital marketing metrics.
- Audience growth rate
- Engagement Rate
- Amplification rate
- Conversion rate
- Social share of voice (SSoV)
- Social sentiment
Tracking these for all the social media platforms you use and bringing the data into one place allows you to compare traffic by channel and analyze it side by side.
North Star metrics
If you have to track and analyze all the important metrics in various areas of business operations, but you also want to have a single metric that defines how well your business is doing in general, North Star Metric (NSM) is what you’re looking for.
NSM is a single metric that your business orients itself towards, and it signals how well you’re doing overall. Naturally, it will differ quite a bit depending on the industry you’re in. Here are the four most popular types of online organizations and their North Star Metrics.
- E-commerce: Number of purchases, Customer lifetime value (CLV)
- Consumer tech: Daily Active Users (DAU), Monthly Active Users (MAU)
- B2B SaaS: Number of trial accounts, Monthly-recurring revenue (MRR)
- Media: Number of Signups, Number of daily active visitors
A North Star Metric can be a good indicator of when things go south, but don’t rely on it too much. You should always track other metrics too, to get a complete picture of how your business is going.
How to set up a marketing analytics report
Ideally, you want to make marketing decisions based on a neat dashboard that reports on digital marketing KPIs. But making that dashboard both easy to understand and accurate is a long process. It can be made much easier to break it down into smaller steps.
The first step is to define your broad business goals and objectives. This means figuring out what you want to achieve in the next period and calculating the small steps necessary to achieve it.
For instance, if your main goal is to double the ARR of your SaaS business, you could set small goals as follows:
- Decrease customer churn by 50%
- Increase website traffic by 100%
- Increase website traffic conversion rate by 150%
- Increase ROAS by 50% minimum
The goals you set are also the KPIs you have to track. You should track all important metrics, but these are the KPIs that are crucial to achieving your main goal.
Once you’ve figured out the metrics you’re going to track, set up collection methods for them. The best way to go about this is to export all the data from the apps and platforms you’re using to a single database.
Your business is likely to have at least five or six sources of data, from Google Analytics and Facebook Business. Analyzing them separately isn’t viable, so it’s a good idea to set up a simple data hub in Google Sheets or Excel and export all the data there.
After making sure the data you’ve exported is correct and brought to a single standard, set up analytics. If you’re creating an analytics solution on your own, this means writing formulas for complex digital marketing performance metrics like ROAS or ARR. Most analytics platforms like Xoxoday will handle this step for you.
All there is to do next is to set up data visualization and reporting. It’s much easier to understand how your KPIs change when you display them in the form of a graph or a pie chart like this.
With all that done, you just have to make a decision based on the data.
How to Make Data-Driven Marketing Decisions
When your KPIs are lower than expected, it’s clear you have to do something to remedy the situation. However, what the best course of action is is not always clear based on a couple of statistics.
There are two main ways to make your decisions data-driven — experiment with your approach until you find what works best or dig deeper into the problem to understand it.
Let’s say you see that the number of leads you’re getting from your Google Ads campaigns is smaller than needed to meet your goals. Once you look through the campaigns to find the best and worst performers, you need to figure out how to increase the number of leads.
One sure way is to pull funds from underperforming campaigns and direct them toward the ones that perform best. Next, you should experiment with these campaigns to see whether you can increase the conversion rate.
The funds pulled from underperforming campaigns can be used to run A/B testing on your best performers. Change the keywords a bit, add some poor-performing ones to the exclusion list, and configure the audiences a bit differently.
Keep track of the results of your tests, and stick with the method that works best.
Experimentation doesn’t always work. In some cases, you'll have to delve deep into the issue to figure out what's causing it.
For instance, if customer churn is extremely high, running an experiment won’t necessarily solve the problem. To fix the customer churn issue, you have to understand what is causing it. To do this, you have to:
- Follow the customer journey: see what the customers who left did before leaving
- Analyze support tickets to see what problems your business has
- Get feedback from the sales and support teams
- Ask the customers who left you for an interview
- Analyze competition for pricing and features
Some of the market data you gather, like customer feedback, may be riddled with problems, but most of the points above can be done within your team. After gathering and analyzing this data, you’ll arrive at a conclusion that is right for your business.
It may be improving a certain feature of your product, changing the pricing, giving customers an easier way to understand how your product functions, or choosing to refine further what types of customers you target. In any case, finding the right solution is impossible without a detailed analysis of the causes.
Leverage marketing analytics
Marketing analytics may sound like something that only large corporations can afford — it’s not. Almost any small e-commerce business can afford it.
The process of setting up marketing analytics can be labour-intensive, but the benefits you receive from running analytics are worth it. You can track how your business is running and whether it’s meeting your strategic goal, which will help you optimize all business areas.
Don’t put off creating an analytics solution until later — the sooner you start collecting data, the better it is for analytics. Focus on the right online marketing metrics to measure your success and optimize your business.