Cost per action (CPA)
Depending on the marketing campaign’s goal, actions can be defined as sales, newsletter signups, registrations, or a variety of other goals. A marketing team should first understand the desired action that they are hoping will occur and have the ability to collect all data points that show the action happened before starting any campaign.
After a campaign is complete and all data is collected, the CPA can be calculated. CPA is calculated by dividing the total cost of the marketing effort by the total number of actions that occurred. For example, if the marketing campaign was $1,000 and the number of actions occurred was 100, the CPA was $10.
Cost per lead (CPL)
This metric calculates the amount of money you spend on a marketing campaign divided by the number of new leads you acquire as a result of the campaign. This metric will help you to understand how much it costs to generate new leads through your marketing campaigns.
Customer lifetime value (CLV)
This metric measures the total value, on average, a customer spends throughout their relationship with your business. Customer lifetime value (CLV) is an important metric to track as it can help you understand the potential value of a new customer.
Many marketing teams will move too quickly to stop investing in a marketing channel because they lose money on the first transaction a customer makes. Still, it is critical that they also understand the total lifetime value a customer will bring to their business before determining if a marketing effort is profitable or not.
Click-through rate (CTR)
The CTR is a metric that measures the number of people who click on an ad or any marketing link divided by the total number of impressions. This metric is important to track as it can help you understand how well your ads are performing and whether or not people are interested in what you are selling.
Lead-to-customer conversion rate
Lead-to-customer conversion rate measures the number of leads you generate from a marketing campaign divided by the number of that batch of leads that become customers. This metric is important to track as it will help you understand how effective your marketing campaigns are at generating new customers.
Multi-touch attribution is assigning credit to each touchpoint in
the customer journey. This metric is essential as it will help you understand which marketing channels are most effective at different customer journey stages.
Website conversion rate
The website conversion rate is the number of people who take the desired digital action on your website divided by the total number of visitors. This metric is important to track as it will help you understand how effectively your website converts visitors into leads or customers.
MQL to SQL ratio
The MQL to SQL ratio is the number of marketing-qualified leads you generate from a marketing campaign divided by the number of those leads that end up becoming qualified sales leads. This metric is important to track as it will help you understand how effectively your marketing campaigns generate new sales-qualified leads.
By tracking these eight key performance indicators, you can better understand your marketing campaign ROI and make optimal decisions about where to allocate your marketing budget.
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