5 indispensable marketing metrics to help small online businesses and start-ups measure performance

marketing metrics for small businessesAs a small online business owner or e-commerce start-up not only do you have a million and one things whirring around in your head, you also have to contend with small budgets, limited resources and constant time pressures. Having to then dedicate even more head space to performance measurements like web analytics can feel somewhat overwhelming. You can be left wondering where to focus your time and effort in a sea of numbers. To help you get the ball rolling we’ve outlined a few key measurements that are quick and easy to understand and can tell you all sorts of helpful things about your performance.

Start small and focus on a few key metrics

Of course there are all sorts of different ways for you to measure your marketing performance, from number of ‘likes’ on social media, customer satisfaction surveys or in-depth analysis of web analytics. Your chosen measurement depends on your goals and objectives and how much time and resources you have available.

Getting started with metrics can feel a bit daunting but the trick is to start small and focus on some key measurements. Don’t be tempted to rely on a scatter-gun approach to marketing where you do lots and hope that some of it will pay off. With small budgets it is essential that you can account for every penny and feel secure that the money and resources you’ve invested are working hard for you. Sign up to Google Analytics and learn to analyse what it is your metrics are telling you. You can then implement whatever changes are necessary to optimise your performance. The last thing you want is to throw good money after bad.

5 essential marketing metrics

We’ve outlined below some simple to understand measurements that can quickly help you identify areas that are paying off or conversely need improving. Of course, there are all sorts metrics you’ll want to analyse as your business develops but these five are a great starting point.

web analytics bounce rate1. Bounce Rate

“If you could only choose one metric to look at Bounce Rate might be your best choice” Google

What is it? Bounce rate is almost self-explanatory, it identifies the percentage of visitors to your site who view just one single page before leaving almost immediately. You are looking for a low bounce rate, the higher the percentage the higher the likelihood of there being a problem. For example visitors came, looked, didn’t like what they found and so left. The general consensus amongst web analytics experts seems to be that about 30-40% bounce is a good target to aim for anything above 50% needs investigating.

What does it tell me? The key things your bounce rate could be telling you is whether there is a problem with the quality of the traffic coming into your site, your page may be loading to slowly or your landing page is putting people off.

What should I do next?

  • Firstly check that you’ve added your tracking code to your page and that the keywords and search terms you are using echo the content of your site. If there is a mis-match you are going to be enticing in the wrong traffic. No matter how great your website looks they just aren’t interested in its offerings.
  • Make sure your website is loading quickly. People don’t have the patience for a website that loads slowly  – they’ll simply give up and move on elsewhere.
  • Check out your landing page. Don’t underestimate the importance of a good landing page. It should be well-designed, easy to navigate, contain quality content, reflect the promise you made in whatever promotion enticed them in the first place (so try to always have a separate landing page pertinent to each channel or campaign) and have a strong call to action.

web traffic source2. Traffic sources

What is it? On your Google Analytics dashboard the Traffic Source metric tells you where your website traffic is coming from – what platform are your visitors using to find you?

What does it tell me? It will tell you the percentage of visitors coming in through each channel. So traffic coming in via search engines using particular keywords is your Organic Search traffic. Direct traffic is those visitors who entered your website’s URL  into the browser. Social traffic are those who arrived through your social media platforms and  Referral traffic will tell you those visitors who clicked on your link from another website.  It is  good way of identifying which areas you need to focus on to drive traffic to your site.

What should I do next? Spend sometime looking at each traffic source. Are you doing as well as you expected or do some channels need some work. For example the percentage of visitors finding you via organic search will give you a good indication of how successful your search engine optimisation is. If it is not as good as you’d hope spend some time looking at how you can improve your content. Your content is absolutely essential in improving your search engine ranking.  Equally if you find that you are putting lots of time and effort into Facebook but actually you’re getting a better percentage of visitors from Pinterest then it may indicate that it’s more worthwhile for you to put some of the time you spend on Facebook into Pinterest.

 

cash flow management3. Cost-per-acquisition

What is it? Cost-per-acquisition (CPA) is the average amount of money it costs you to acquire a new customer. Divide the total costs of  acquisition (for example sales and marketing spend) by the total number of new customers over a specific period –  for example 6 months.

What does it tell me?  Cost-per-acquisition will tell you if you’re spending too much on acquiring a new customer. For example, does what you spend on the acquisition of a new customer exceed the profit your new customer is generating for you?

What should I do next? Are you spending more than you can afford?  Investigate where you are spending your marketing budget. Examine the performance of the marketing channels you are using to acquire your new customers in more detail. Which leads us nicely onto…

 

4. ROMI Return on marketing investment

What it is? ROMI is your Return on Marketing Investment. A simplistic calculation for ROMI could be: Total revenue generated from a campaign / Total campaign cost. Remember to multiply the result by 100 as ROMI is usually expressed as a percentage.

What does it tell me? The higher the percentage then the better the campaign is working. What you don’t really want are percentages that are in the negative. Work out the ROI for each campaign you undertake.

What should I do next? Think about what campaigns are giving you the best return on investment. You can then allocate your budget in the most profitable areas and get rid of the campaigns that are losing you money.

shopping cart abandonment rate5. Shopping cart abandonment rate

What is it? Your shopping cart abandonment rate is the percentage of customers leaving you during the conversion process. To find out where people are abandoning you, in Google Analytics go to conversions and look at goal flow.

What does it tell me? These people had already decided to part with their money but somewhere during the conversion process they’ve quit. It will give you an indication whether there is a potential problem during the checkout process that needs addressing.

How you can improve it? Identify the steps on your flow that have the highest abandonment percentages and think about what it could be that is making people leave. For example do you present them with an overly long registration form, are their some hidden shipping costs that suddenly appear or is confusing wording making it difficult for people to know what to do next? Try to make your checkout process as simple and straightforward as possible. Don’t ask for too much information and don’t have any hidden costs appearing out nowhere. 

 Next steps…

As your business grows and develops you’ll want to start delving a bit deeper into measuring and understanding performance.  Moving forward you will need to have clear goals and set yourself specific objectives that you can measure using the most appropriate metric. Of course numbers on their own mean little, it is about understanding what it is your metrics are telling you. Only then can you make the right improvements.

Try to get yourself into the routine of regularly checking your metrics on Google Analytics (or whatever web analytics programme you are using). Before you know it you’ll become  proficient in reading metrics, identifying trends or spotting any hiccups!

 

We’d love to hear your thoughts and experiences on this post, so do please leave a comment.

 

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