10 Important Marketing Effectiveness Metrics To Measure


Measuring marketing effectiveness is all about measuring the right numbers. Having your brand featured by a famous website is certainly nice, but it is not a measurable metric. Instead, marketing effectiveness is measuring tangible, relevant metrics with the aim to improve upon that data.

However, there are a lot of marketing metrics available, tied with all the different marketing tactics and channels. So, the issue here is to determine which marketing channels to measure, and here we will share 10 of the most important metrics you should track to determine the effectiveness of your marketing activities.

Let us begin.

1. Lead Volume

The thing is, you won’t get any customer without first getting leads or prospects. So, the number of generated leads is a very important metric to measure in any companies. Lead volume represents the performance of your top marketing funnel, meaning, it will tell you whether a certain marketing activity is effective in introducing your brand to your prospects.

Remember, however that the generated leads will only matter when you have the necessary resources to maintain and nurture them, so here we speak volume rather than pure quantity. Assess your marketing goals, and figure out how many leads will be necessary to achieve those goals. 

2. Lead Score

Above, we have mentioned how the quantity of your leads will only be relevant according to your available resources. So, to determine which leads are worth investing your resources on, we should also determine their quality. 

By investing our resources, and especially our finite time to only the most qualified leads, we can have a better chance in getting converting customers. 

To measure lead score, there are many different lead qualification frameworks you can use. Check out this guide by HubSpot and Marketo on lead scoring that might help you. 

Inbound links, or also often known as backlinks, are the number of links coming to your site. 

While the main value of inbound links is the fact that they are a very significant ranking signal for SEO purposes: if you have a lot of high-quality backlinks, you have a higher chance to be ranked by the search engines like Google and Bing. 

However, there are other benefits of having many high-quality inbound links. For instance, it is a good indicator of your credibility. The more quality sites linked your business, the more perceived trusts you’ll get. 

4. Number of Subscribers/ Followers

The number of email, newsletter, and blog subscribers among others, as well as the number of social media followers are very important assets in this world dominated by digital interactions. When your numbers of subscribers and followers are growing, so does your leads, and so you can achieve business growth.

Remember that only your “owned” subscribers and followers will actually count. Purchased and rented lists are not valid business assets. Also, measure the level of engagements with these subscribers and followers.

5.Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) is the projected revenue generated from a single customer over the course of their relationship with your business. So, by measuring LTV, you can have a clearer estimation of the potential long-term value of your customers.

The main purpose of measuring LTV is s that you can optimize your marketing budget: since you know the long-term value of the customers, you can spend your money more effectively.

There are many different ways you can use to measure LTV. Check out this guide by Neil Patel on how to calculate LTV.

6. Retention Rate

While many marketers neglect the importance of measuring customer retention rate, there are at least two valid reasons for this: first, many marketers put more importance in new customer acquisitions instead of retaining customers. Second, many marketers don’t know the required insights to properly measure customer retention.

Yet, maintaining new customers are actually more affordable than acquiring new customers, with the potential of bringing more profit. 

A simple formula to calculate customer retention rate is:

Retention rate= (total number of existing customers-number of lost customers)/total number of existing customers

Depending on your business model, there can be many different factors affecting customer retention rate calculation. Yet, the basic principle remains the same.

7. Customer Acquisition Cost

Customer Acquisition Cost (CAC), as the name suggests, is the total cost to acquire customers over a given time, divided by the total number of acquired customers during that period. However, the calculation can be more complex with different business models and all the different variables. 

One thing to keep in mind is that your CAC should always be lower than your LTV. A CAC of around 30% of the LTV is the ideal number. Also, determine the time period necessary to recover CAC. Check out this guide by KissMetrics to help you further. 

8. Lead to Sale Conversion Rate

Arguably, purchase conversion rate is the single, most important metric at the bottom of the marketing funnel/buyer’s journey. Generated prospects will only translate to value once they have converted into actual, paying customers.

We can calculate lead-to-sale conversion rate with this formula: total number of conversions/total number of prospects x100

If your conversion rate is lower than desired, your prospects might not be qualified enough (see lead scoring above). There can be many other factors involved like whether your site is optimized for conversion or whether your product is the right fit for your target customers, among other reasons. Check out this guide by HubSpot on how to improve conversion rates.

9. Net Promoter Score

Net Promoter Score (NPS) is a very useful, well-rounded metric we can use in all different stages of the marketing funnel. NPS is an indicator of whether your customers are willing to recommend your brand, product and/or service to their friends, family members, or colleagues. 

NPS is a strong indicator of customers’ perceived trust, and the performance of your branding activities. If your NPS is high, or at least increasing, your brand is growing.

Check out this guide to help you in measuring Net Promoter Score.

10. Return of Investment (ROI)

Quite possibly the most recognized metric, and arguably the most important. ROI ultimately determines which marketing channels, tactics, initiatives, and strategies are working -and which doesn’t. 

Truly understanding your ROI is very important in allocating marketing budget: we should spend more on strategies that work, and spend less on those that don’t.

With all the different marketing channels and tactics available, measuring a detailed marketing ROI is, admittedly, quite difficult. There can be many different approaches in properly measuring marketing ROI, and you might want to check out this guide by MarketingProfs to help you. 

End Words

Measuring marketing effectiveness should be done with a single goal in mind, which is to improve the performance of your marketing. Assess various areas of your marketing activities: your strength, weakness, and opportunities by using the various metrics we have shared above. 

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