Analysis Paralysis — the overwhelming feeling of having a large number of metrics to track, not knowing precisely what needs your attention. Sound familiar? It's easy to become overwhelmed by the sheer abundance of data points to follow. However, understanding and tracking the right metrics is the foundation of any successful marketing strategy. So, what metrics should you be tracking?
Avoiding Analysis Paralysis
Before we get into the must-know metrics, it's time for you to stop focusing on the "feel good" numbers. Try to see your data for what it is! It's easy to get caught up in things that look good — like a million views on a blog post. However, if you have no conversions from those views, you have not generated any customers or revenue. So, ultimately, that metric says very little about the overall success of your marketing strategy.
Looking at metrics alone could make you feel exposed if you don't know what they are, what to do or you don't like what you see. The process doesn't have to be intimidating! Once you step into product and user territory, and away from marketing metrics like view or visits, you get a better understanding of your strategy (and more successful efforts in implementation!).
Leverage a bottom-up approach to growth, where you can ensure that the leads you're getting are good leads that turn into customers that stick around in the long-run. The key here is focusing on the right metrics within the context of user experience and product. Focus on the big picture — focus on revenue and the entire customer lifecycle.
8 Metrics Every Marketer Should Know
When it comes to metrics, there are too many to choose from. But, are all metrics worth tracking? We don’t think so. However, having a solid foundation of product metrics will help marketers stay ahead of the curve and understand how to leverage a product-led strategy. Let's start with the eight below.
- Monthly Recurring Revenue (MRR)
- Customer Acquisition Cost (CAC)
- Average Revenue Per User (ARPU)
- Customer Lifetime Value (CLV)
- Quick Ratio
- Churn Rate
- Lead Velocity Rate (LRV)
- Product Qualified Lead (PQL)
Building Your Best-Fit Arsenal
Use those eight base metrics as the foundation of your marketing strategy, adding and subtracting data points depending on your goals and focus. The crux of the process is this — make sure that you have a goal, challenge or question in mind before digging into the numbers. That's how you identify your company's base metrics. Also, get your team on board! Ensure you have checks and balances on your team, through both short and long-term goals, to ensure fair and consistent reporting. Being on the same page ultimately leads to better results. See, now you have a solid direction to guide you!
Balancing Leading vs. Lagging Indicators
Metrics have different meanings for your marketing pursuits. We’re talking about the future and the past here. Ever want to be a fortune-teller? By understanding leading and lagging indicators, you can get pretty darn close. Leading indicator is a predictive measurement, while the lagging indicator is an output measurement. Most of your metrics will be lagging indicators (this is a good thing!), meaning they’re based on calculations from historical data. Leading indicators allow you to predict the future by projecting the success of your efforts. Both will help you see the big picture.
The Importance of Goal Setting
Before going into any kind of reporting, it's crucial to have a set goal, question or challenge in mind. Consider using the SMART (Specific, Measurable, Attainable, Relevant and Timely) goal-setting framework for a more holistic, big-picture approach. Doing things with utmost intention and having a desired outcome and supporting data is vital. Even if you fail an initiative that you've done your due diligence on, even the results of failure will be useful for future efforts.
But, ultimately, it's all about the customer lifecycle. The notion that the customer is the output of sales, marketing and service efforts is out — we're seeing a transition where that's this sort of approach is no longer working. Marketing, sales and service should work in tandem, and all should revolve around the customer, ensuring that you are addressing every part of the customer lifecycle. You don't want to only sell but to create brand evangelists — which is the key to achieving accelerated growth.
Want to learn more about how to leverage metrics to be more intentional about your marketing strategy and company growth? Check out the webinar Demystifying SaaS Metrics featuring Baremetrics’ Head of Growth Corey Haines and New Breed’s Partner Marketing Strategist Amanda Nielsen.
Topics: Inbound Marketing