Why Metrics?

Janice Means      Friday, August 24, 2018

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You’ve probably heard you should track your marketing/advertising spend, track your clicks, track your leads, track your conversions, track your sales, track your repeat business, and … track…track…track.  But, WHY?

The short answer is, so you know if you have made progress in your business or not.  

The long answer is, so you know that the progress that you are making is in the right direction.  Not only do you need to track the data but you need to do some analysis on the data that you have collected.

At the raw level, let say you’ve collected the following metrics from your data collection and overall you feel very happy that you have doubled your revenue.

 

1Q

2Q

Facebook Ad Budget

$500

$1000

Clicks on the Ad

2500

6000

Leads, sign up

2000

4200

Conversions to Sales (number)

1500

3200

Revenue ($$)

$15,000

$30,000



 

At first glance, this looks like you doubled your Facebook spend and directly doubled your revenue.  However, if you look closer at the numbers, you really should have more than doubled your revenue. Your Ad Clicks have gone up.  Better copy? However, the percentage of clicks that turn into leads has declined by 10%. What changed on the sales page? If the tweak that improved the number of clicks on the Ad remains and the originally leads to sales ratio would remain, your overall revenue would go up.

Image result for marketing formulas

 

 

 

1Q

 

2Q

 

Numbers if % remained

Facebook Ad Budget

$500

 

$1000

   

Clicks on the Ad

2500

 

6000

 

6000

Leads, sign up

2000

80%

4200

70%

4800

Conversions to Sales (number)

1500

75%

3100

74%

3600

Revenue ($$)

$15,000

$10 per sale

$30,000

$9.67 per sale

$36,000 ($10 per sale)

 

So, what changes need to be made to gain the potential revenue?  You may want to do some A/B testing on the Sign-Up copy and determine if it’s a color and wording or the offer?  Again, measure these.

What do your numbers tell you?  Have you looked at them over time?

Please note, there are more metrics that are valuable to your business than just these.  We selected this small sample to demonstrate the value of reviewing the numbers.

 

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