From the early years of trading, marketing is one of the essential elements of every business. As a business grows, it needs a robust plan and strategy for sales and creating revenue. By the time, many different, sufficient and insufficient, strategies have been presented; and clearly, not all of them were successful and practical. By having a brief study of different marketing strategies, we clearly understand that The Time changes the important metrics for startups. There are various features in every business that define particular metrics for every business. Hence, for each business, we need specific marketing metrics.
Time changes anything including rules and criteria; and so are the startups. Yes! Startups have quite a different atmosphere. But as long as you are selling something – a physical product or a service – you need sales strategies and marketing plans. You need to consider several metrics which are vital for the growth of your business.
Before jumping into the topic, there is a crucial point to be mentioned, and it is measuring. You need to measure your movement, your progress, and achievements or your failures. If you are going forward in the right way, then go on. But if not, you need to revise your marketing plans and strategies. As it’s obvious, you need to know more about marketing metrics for your startup. So, let’s hack the important marketing metrics for startups.
Important Marketing Metrics for Startups
1- Customer Maps
You may not consider this one as a Marketing metric. But, it will help in improving your sales growth rate a lot. You can use Google Analytics to know about “Time on Site” of your users or customers. This approach is used by famous for tracking their customers and understanding about their behavior and mind state while they are
purchasing or just surfing! You can also analyze and find out about the weak points of your website that customers don’t spend enough time on them.
2- Customer Acquisition Cost & Customer Lifetime Value
There are two key elements you need to know if you want to have a successful business:
- Customer Acquisition Cost (CAC)
- Customer Lifetime Value (CLTV)
These two factors are highly relevant to each other. Most of the businesses pay enough attention to their conversion, but they forget about their Customer Acquisition Cost (CAC). A high CAC cost means you are paying too much money to acquire new customers.
CLTV is how much you expect to earn from a customer during the time they are with your company. Actually, it is Actualized profit of a customer minus the acquisition cost. CLTV is a combination of the following:
- AC acquisition cost
- N number of years
- Rn/Cn revenue/cost at year n
- p probability of not defeating
- r interest rate
The formula for computing CLTV is:
LTV tells businesses how much revenue they can expect one customer to generate throughout the business relationship. The longer a customer continues to purchase from a company, the higher their lifetime value becomes.
If your CAC is more than your LTV, then you need to be concerned about the rest of your business life. On the other hand, if your CLTV is more than your CAC, you’re on the right side.
3- Social Media Mentions and referrals
It’s tough to deny the importance of social media and the referrals made in them. They are excellent potential for the growth of your business. If you have mentioned by your fans, users, or customers, you’ve got a huge chance to get introduced to others and increase your CAC. You’ll be also able to analyze different groups of customers and anticipate their behaviors. Then, you can take actions to reach your goals in the way that your followers desire, and it means more money. So, pay enough attention to your mentions on social media!
4- Customer Retention
It is acceptable for you as a startup to focus on customer acquisition, but don’t miss the retention. Retention is one of the most important marketing metrics for startups. Customer acquisition is the first step you need to take, and the rest is about retention. All you do to keep your customers and satisfy them are known as retention-related activities.
Besides, it costs X times more (depended on the business category) to close a deal with new customers than it does to sell again to the current one. That means you shouldn’t forget your existing clients!
5- Return On Ad Spend (ROAS)
Advertising may be very money-consuming in your business, and you need to be sure about something: If your advertising plans are working or not?
To know the answer, surveys and simple researches are required. By studying your data, you can know about the return rate of the advertisement you do. The formula for Return On Ad Spend (ROAS) is simple: Revenue / Cost = ROAS. You divide the revenue that is produced by advertising to the dollar amount that is spent on that particular advertising to obtain ROAS.
6- Average Order Value (AOV)
The most crucial element of a business is the customer. Yes! in every business -whether it is a classic business or a startup- you need more and more customers, and after attracting new customers, you need to ensure them to buy your product or service. Then it is time to raise the average order value (AOV), which determines your business’s success.
Average Order Value (AOV) = Revenue / Number of orders
Increasing AOV means, instead of focusing on generating new users to the website focus on selling more to the current customers by navigating them wisely in the service.
7- Customer Churn
Churn is another fundamental metric you should keep your eye on. This is a measure of how many customers stop paying you for your product or service. Some startups measure churn at a short period and some others wait for more to judge about an inactive customer.
There are hundreds of metrics out there in the marketing world, which would give you insights if you’re in the right direction or not. It’s crucial to pick the best metrics for yourselves. It’s widespread when startups depend themselves on wrong parameters and after a while face the failure.