Numbers are awesome.
They make us sound slick in meetings and they look great in emails to decision-makers, but unless we know how to interpret the data and take action to improve it, we’re merely talking the talk, or jargon, as the case so often is in the world of marketing.
Looking at the data is great. Understanding it; even better! But many marketers miss the boat when it comes taking their data to the next level. Think about it, the point of all of that marketing you’ve been doing isn’t to simply look at your website visitors and think. “cool, we got 20% more visitors last month” or “oh no, our website visitors decreased by 15% last month.” Knowing that these things are happening is a great start in analyzing your data but it’s kind of all for naught if you don’t take that next step of determining what the analytics mean and what you can do about them. Instead of just looking at those numbers and noting the change, you want to think about what happened, why it happened and what action you can take based on that insight.
Turning your marketing analytics into actionable insights is what separates the so-so marketers from the really incredible marketers and the company’s that just skate by from those that really succeed and continue to grow. So how can you make sure you’re that incredible marketer or really successful company? Let’s take a look!
This post explores two of the top tier marketing KPI’s (key performance indicators), customer acquisition cost and online sales conversion, both key components of company business strategies. Discover not only what they are and why they matter, but also specifically how to elevate them from spreadsheet data points to actionable insights that ultimately result in increased returns on your investment.
Ready, set, go….!
Customer Acquisition Cost
This is a big one. Your CAC (customer acquisition cost) tallies all of your marketing spend and divides it by the number of new customers you have acquired over a specific period of time. The key here is knowing where every dollar used to acquire a customer is being spent. This should include your marketing, and perhaps sales and advertising spend, including employee salaries. Of course you may run the data including or excluding any metric you wish to provide a different perspective.
Interpret the data.
Customer acquisition cost answers the question, “How much do we have to pay for each customer?” You want this number to be as low as possible and you want it to remain the same or trend lower month-over-month.
Take these actions.
#1 Determine your baseline.
It’s always easy to say that customer acquisition costs are too high, but it might not actually be excessive for your company or industry, and this is something you won’t know without closely examining your metrics over time. Check data over particularly busy seasons for your business (holidays, major sales events, etc.) and compare that with traditionally slower times. Average out these numbers to measure your customer acquisition costs over a year or a quarter to get a truer sense of how much is being spent and when.
#2 Compare your customers.
Know which assets and actions bring in the most customers vs. the highest-paying customers. A distinction needs to be made between your company’s consistent “bread and butter” customers and its highest paying gems. Depending on your business goals, it’s a good idea to use metrics to determine which type of customer you’d like to attract. Know, for example, which type of customer delivers the most revenue over the short or long term, again depending upon your goals. If yours is a subscription-based business model, you will want to account for CLV (customer lifetime value). Know what each classification of customer is spending with you on average over various time frames.
#3 Lower your costs.
Thanks to your business dashboard and metric-gathering system, you already know where your cash is being spent. You’ve compared your customers and know which new acquisition points you want to target. Now it’s time to do the hard work of tweaking and lessening expenditures based on these goals. The reallocation of resources is good business practice. The good news is this shifting is informed by metrics that aim to support and grow your business.
Online Sales Conversions
Another key marketing performance metric is the online sales conversion. Online sales conversion data calculates how many of your website visitors convert to actual sales.
Interpret the data.
Absolutely necessary for ecommerce sites, digital sales and marketing likely account for a large portion of your business, so knowing what to do with this data is essential. Your goal here, with online sales conversions, is to narrow the gap between site visitors and final sales. While it’s great to have a bunch of visitors checking out your site, quantity is not relevant unless they’re taking some kind of action, ultimately the purchase of a product or service.
Take these actions.
#1 Seriously, get cozy with your baseline.
As with customer acquisition cost, you want to know your online sales conversion baseline by averaging out your data across busier and slower sales cycles and seasons. If you’re fortunate enough to collect competitor benchmarks, that’s great, too! Just know that it’s impossible to intelligently move forward without first formulating a baseline from which to grow. Sure, you can guess based on instinct or a hunch, but that’s a risk you don’t have to take.
#2 Examine the entire visitor experience.
While we’ve been discussing the overall conversion from on site visit to end point-of-sale, it’s important to recognize every step of the customer journey, so that improvements may be made along the way. If you’re not satisfied with the data, break it down step-by-step. Here are some data points that will help you mind the gap:
- Bounce Rate
This measures the number of site visitors who land on your site and “bounce,” or immediately exit your site. A high bounce rate indicates that your site isn’t very appealing or helpful. Pro tip: Break out your bounce rate by device type to check that your mobile site is up to par. What may appear glamorous on your laptop may be a hot mess on an iPhone or Android. Be sure you’re not disappointing your mobile site visitors because they are, after all, likely the majority of your visitors.
- Time Spent on Site
It’s typically a good sign if your visitors are hanging out for a while. This means that they’re finding your site’s content useful. More time spent on site typically equates to more sales.
- Page Visits
Similar to the Time Spent on Site metric, a higher number of page visits indicates an increased likelihood in sales conversions. If the data reports that visitors are not clicking through your site, you may need to adjust your marketing presentation or site layout.
- New vs. Returning Visitors
Check in on how many new vs. returning visitors you have and how, if at all, their pathway through your website is any different. This will show you how to best cater to each audience.
#3 Focus your time; focus your spend.
Don’t forget to examine how your customers are finding your website in the first place! Bringing in paid traffic is great, but it’s best to know where your organic traffic is coming from first (that whole baseline thing, again). A few key places to look for actionable data:
- Social Media
If you find, for example, that most of your social media network traffic is coming to your site from Facebook, then you know to spend more marketing dollars on Facebook advertising.
- Referral Links to Track Digital Advertising & Content Marketing
You can get into the nitty and gritty of every single ad or blog post or white paper your company has ever published, but if the metrics point to a particular branding message that is outperforming others, check it out because there’s sure to be a reason why. It’s up to you to examine the location, time of day, and topic to interpret what’s making it successful. If there’s a particular digital ad or blog post that’s gaining traction, focus your attention (and budget) on that specific type of marketing messaging.
BONUS: Discover which geographic locations your site visitors are coming from by using this handy quick-glance visitor map from Cyfe. Gorgeous and simplified visuals like these make analyzing metrics super easy.
The beauty of data is that it takes the guesswork out of the sales and marketing process.
But don’t merely examine and spew impressive-sounding data points. Take smart and informed action that is sure to grow and move your business in the right direction.
Now that you know how to take your marketing analytics and turn them into data insights, let’s talk about how to present those insights to your boss or CEO. Presenting data can be incredibly intimidating and it can be difficult to help someone understand why it’s important. Let us help you! Our downloadable powerpoint Data Presentation Template will help you structure your presentation and give you some tips to help you present your data more effectively and really show your boss what you’re made of. Download it now!