10 Metrics To Evaluate Your Marketing Strategy
What makes the names Coca-Cola, Apple, McDonald's, Gucci, and IKEA unique? There's nothing special about the words themselves. What makes them stand out are the ideas they bring to mind and the feelings they inspire. When we see these names, we instantly think of their colors, logos, products, and reputations. That's the power of branding.
These companies have invested time and money into building unique images in the minds of their market. This investment pays off when a customer chooses one of these products over a competitor's. However, marketers can't rely on hope alone to achieve this. You need accurate metrics to understand if your marketing strategies work. Without data, there's no way to measure the impact of your plan.
Marketing metrics show a company's performance and how well its strategies work. They allow businesses to examine past performance and adjust future campaigns. Metrics can also provide insights into how a company compares to its competitors.
Some key uses of marketing metrics include:
You might wonder whether marketing metrics and KPIs (key performance indicators) are the same. They are often interchangeable but not identical—a marketing metric measures overall health, while a KPI measures progress toward specific goals. Whether a metric is a KPI depends on your business's objectives.
Suppose your business wants to increase conversion rates on a landing page by 30%. Many numbers affect that goal, including page visitor numbers, bounce rates, time spent on the page, and conversions. None of these are KPIs because they only provide some of the details needed to see if you have reached the goal. You might focus on increasing page traffic, but that doesn't mean conversion rates will increase.
The KPI in this scenario is the conversion rate calculated from visitor and conversion numbers—the number you want to see increasing.
Let's explore ten key health metrics that businesses often use to evaluate the effectiveness of their marketing strategies.
1. Awareness
You recognize Nike and the other names mentioned at the start of this article. These companies are known worldwide and are worth billions of dollars. Awareness measures how many consumers recognize a company and its products.
Consumers trust familiar names more, so awareness strongly relates to sales. As long as there are no negative associations, people buy from familiar companies.
High awareness also protects against new competitors. Building awareness takes time and money. It gives established companies momentum that new ones may need help to overcome.
You can measure awareness through:
2. Engagement
Engagement measures direct contact between consumers and your touchpoints, like websites, eCommerce stores, physical locations, social media, advertising, sales teams, and customer support teams—the more interactions, the higher the engagement.
Engagement shows a healthy relationship between your business and its customers. Businesses aim to increase engagement because engaged customers buy more products, show more loyalty, and are more aware of the company.
Engagement also strengthens your business compared to less engaging competitors. It's essential when launching new products or entering new markets.
Metrics for engagement include:
3. Sentiment
Sentiment measures how consumers feel about your products. The metrics we've examined so far measure awareness and engagement. Sentiment analysis helps put those metrics in context and helps businesses understand positive or negative attitudes.
You can measure sentiment at different levels. At a high level, a company might be interested in people's feelings toward the business. But you can also focus on feelings about specific products, marketing strategies, and events.
Sentiment can change quickly if a company acts in ways loyal and engaged consumers dislike. Monitoring sentiment and responding to evolving attitudes is vital.
You can measure sentiment with:
4. Top-of-Mind Awareness
Top-of-mind awareness (TOMA) measures if your company is the first to come to a consumer's mind when asked about a product category or industry. Which names come to mind when you hear "flatpack furniture store" or "smartphone manufacturer?" It might not be IKEA, Apple, or Samsung, but there's a good chance it is because these companies are top-of-mind for many American consumers.
TOMA is the flip side of awareness. When prompted with your company, awareness measures if consumers know your products and services. Top-of-mind awareness measures if they are likely to think of your company when prompted with a product or service. TOMA is vital because consumers are more likely to buy from businesses they recall when faced with a purchase decision.
TOMA is usually measured with market surveys. Marketers ask consumers from a given market segment about a product category and calculate a percentage based on the respondents mentioning the relevant business.
5. Associations
Associations connect your business to concepts, emotions, events, and activities. Phillipe Patek may bring to mind luxury, high-end fashion, and innovation in mechanical engineering. IKEA may bring to mind practicality, convenience, and value.
Associations aren't numbers but are qualitative relationships. However, they can measure if consumers think of your business positively or negatively. Analyzing associations and their emotional value helps marketers develop and target strategies.
Strategies often aim to create new associations or challenge existing beliefs. Tools like templating platforms and asset management software help consistently form the desired associations across various touchpoints.
6. Purchase Intent
Purchase intent measures how likely consumers are to buy your products over time. It is based on the number of consumers ready to buy, as opposed to those who have recognized a need or started a search but have yet to be ready to buy.
Many factors impact purchase intent, including seasonality, awareness, sentiment, engagement, and more. Understanding purchase intent allows you to focus marketing resources where they are most effective. For example, advertising outdoor grills in January may be less effective with low purchase intent.
Purchase intent is a complex metric with multiple variables. It is usually measured by analyzing past sales and marketing data and conducting consumer surveys.
7. Loyalty
Loyalty measures how willing consumers are to buy from your business repeatedly over a long time. It benefits sales and marketing budgets because keeping customers is much cheaper than attracting new ones. It's also a key health metric.
Healthy businesses create loyal customers who keep coming back for more. A company that can't generate loyalty experiences high customer churn. They need to fill the marketing funnel with new prospects constantly. This strategy works for some business models, but keeping long-term relationships with loyal customers is a key goal for many companies.
Changes in loyalty can assess the success of your company's strategies and customer experience. A decrease in loyalty indicates trouble and should prompt investigation and action to address customer dissatisfaction.
Customer retention rates, negative churn, repeat purchases, and lifetime value usually measure loyalty.
8. Net Promoter Score
Net promoter scores (NPS) measure how likely customers are to recommend your company to friends and colleagues. It's one of the simpler KPIs that captures essential information about your business's health.
NPS is determined by a one-question survey that asks customers how likely they are to recommend your company on a scale from zero to ten. Zero is "not at all likely," and ten is "extremely likely." Promoters rate the company 9-10, passives rate 7-8, and detractors rate 6 or less. Your NPS score is the percentage of promoters minus the percentage of detractors.
NPS is valued because it relates to a company's long-term health—businesses with high scores do better over time. It's also a helpful indicator of marketing success. A positive change in NPS signals that a strategy is at least somewhat successful.
9. Customer Lifetime Value
Customer lifetime value (CLV) measures the revenue your business can expect from the typical customer. It's often used with average income and profit and compared to customer acquisition costs to determine the cost-effectiveness of marketing and sales strategies.
In the context of branding, CLV offers insights similar to loyalty. All else being equal, growing CLV indicates that your customers are happy with your business.
Marketers can segment their customers to identify underperforming groups and develop strategies to target those groups.
CLV is calculated using analytics data from sales platforms. CLV is: