The top growth metrics you need to track
Growth marketing is all about producing measurable results. Growth marketers should understand the data generated by their company inside out to review customer acquisition and retention rates. What is your engagement like? How many customers are you acquiring per month? How many customers are churning in the same time period? Is your business actually growing?
These are all important questions to ask yourself. But without tracking in place, you will struggle to learn the answers. Identifying the growth marketing metrics that matter the most to your business will help you move your business forward. You can implement tracking to ensure you gather the relevant data to analyse your growth performance.
Why should you track growth?
While growth marketing has a strong focus on results, it isn’t about rapidly increasing your numbers. Growth should be a series of continuous small, trackable improvements that make a high-impact and have a clear focus on providing value for your customer. Creating a relevant offering that supports your customers’ needs consistently over time will improve your bottom line and help you achieve your growth objectives.
Gathering data and analysing performance gives you a comprehensive understanding of what engages users, what leads to conversions and how successful you are at customer retention, to name just a few. Without these factors, you will never know how close you are to achieving successful growth and what must be done to keep progressing.
More specifically, growth metrics can help you understand:
- Which products or services produce the most revenue
- Which channels have the most potential for growth
- Which elements of your strategy prevent the growth
- Which campaigns deliver the best return on investment (ROI).
There are hundreds of metrics you can track using a range of data and analytical tools. But which ones are relevant for growth specifically? The metrics you choose to track should be based on your goals and objectives as a business. Typically, growth metrics can be broken down into three sections: acquisition, engagement and retention. To help you gain visibility of your business growth, here are the top growth metrics you should track.
This is the most obvious growth metric and one that you will already track. Revenue shows whether, overall, your business is growing. Ideally, revenue should improve year-on-year. If revenue is falling you need to do more to improve your income and boost sales. Look at what the growth data is telling you; analyse what you’re doing right and what you could improve on.
If your revenue isn’t reaching its goal, consider whether you’re targeting the right users. Are you using the right campaign strategies to target your audience and engage them in your offering? You may need to alter your approach to ensure you’re gaining the awareness and delivering value to the users who will really benefit from your product or service.
Cost per lead
Cost per lead (CPL) refers to how much it costs to generate a lead. This metric is a great way to understand whether your campaign is cost-effective at attracting interested prospects. You measure cost per lead by dividing your marketing and advertising costs by the number of leads generated in a specific period of time.
A lead is defined as a person that has completed action or goal therefore expressing interest in your product or service. The cost will depend on the quality of leads and varies so much between industries. You can find the industry benchmarks online to see whether you’re performing above or below average for your sector.
Cost per acquisition
When running a campaign, an effective way to measure whether your content is actually converting customers is to look at the cost per acquisition (CPA). CPA is calculated by taking your total advertising spend and dividing it by the number of acquisitions generated.
When creating your campaign ad, it’s important to make it high quality. Users must be engaged enough to click through to your landing page and complete the desired action. You want to generate as many conversions as possible within your campaign spend.
The conversion rate will tell you the percentage of people visiting your website that complete a goal. A conversion can range from a user downloading your ebook to subscribing to your email newsletter; it doesn’t always have to be completing a sale. Ideally, you want a high conversion rate which shows that your content has been effective in getting users to engage.
If you have a low conversion rate, you should revisit your campaign strategy to determine why users are failing to convert on your website. Here you should implement conversion rate optimisation tactics to improve your engagement.
Customer retention rate
Customer retention is your ability to retain a customer over time. It’s commonly calculated as a percentage of your customer base that has been retained over a time period. Customer retention rate is determined by the following calculation: Customer Retention Rate = ((Customers at End of Period – Customers Acquired During Period) / Customers at Start of Period)) x 100.
Your customer retention rate indicates the quality of the customer experience your business provides. A high retention rate is preferable as it shows that you have low customer churn. Your customers stay with your business so they must be satisfied with the service you provide. If you have a low customer retention rate, you should revisit your customer experience to determine why customers are turning away from your business.
Net Promoter Score
A Net Promoter Score (NPS) measures whether your customers are likely to recommend your brand to someone else. You can learn your NPS by asking your customers to complete a feedback form or survey. Each question on your form or survey should generate a response on a rating scale. For example, ‘On a scale of 1 to 10, how likely are you to recommend this product to a friend?’.
Learn how to calculate your Net Promoter Score from your survey responses. Referrals are one of the greatest marketing techniques that require little effort and cost from your business. Customers that are advocates for your brand will want to promote it to their friends, family and followers.
These growth metrics are just some of the measurements you can put in place. The growth metrics you should track are typically related to user acquisition, conversions, retention and sales. They help you understand your performance in relation to your business goals, whether you’re on track to achieve them and what improvements need to be made to move you closer to your goal.