| What Are the Marketing Metrics that Matter in Business? Small businesses should pay more attention to actionable metrics rather than vanity metrics. |
You’re investing time and money in marketing. How do you know if it’s working?
You should measure the success of your online marketing activities.
According to Constant Contact, 23% of SMBs are unaware of what’s working, so they can’t measure their marketing efforts.
In this article, I’ll show you the key metrics that matter for your small business growth, so you can concentrate on activities that can double your revenue.
GroXcelent enables business founders like you to monitor the marketing KPIs that drive results.
Key Takeways
- Understanding the right marketing KPIs is crucial for driving SME growth.
- Focus on metrics such as customer acquisition cost, customer lifetime value, conversion rates, and return on investment to measure and enhance marketing effectiveness.
- Regularly analyzing these metrics can help businesses make informed decisions and optimize their marketing strategies for better results.
The “Vanity Metrics” Trap: Why Do Many SMEs Track the Wrong Data?
TL;DR: Many SMEs track “vanity metrics” like social media likes and follows. These don’t show real business growth or return on investment.
You check your social media stats. Your followers are sky-high, so you feel good.
But your sales aren’t increasing. These are vanity metrics.
Vanity metrics are the most common marketing data people use to measure performance, but they don’t show the actual return on investment. They appear impressive but lack real business impact.
They look great on the surface and give you the impression that you excel in your marketing efforts. However, you realize these numbers are superficial when you dig deeper.
Ever seen a company’s social media account with a huge following? How many of those people buy the business’s product/service? That’s the real issue.
I’m not saying your brand shouldn’t increase its follower base, but when it comes to real business growth, it’s better to focus on quality. If conversions are significant from your massive following, that’s genuine company success.
Here are more examples of vanity metrics for different marketing functions:
| Marketing Channel | Vanity Metric |
| Social Media Marketing | Comments, likes and follows |
| Content Marketing | Page/blog views |
| Paid Advertising | Ad impressions |
| Email Marketing | Open rate |
| Search Marketing | Rankings |
| Public Relations | Media mentions |
| Video Marketing | Video views |
Vanity metrics
These numbers waste time and money on efforts that don’t help your business grow. You focus on brand visibility instead of revenue generation.
There’s a place for measuring your digital footprint, especially in the era of AI when clicks are extremely low. That’s because you want to evaluate whether your marketing campaigns are effective in AI-first search.
A vanity metric is a statistic that appears impressive on the surface but is meaningless when you measure your actual business growth.
The Money Metrics: What KPIs Actually Impact Your Bottom Line?
TL;DR: Focus on marketing KPIs directly related to revenue and customer acquisition.
There are actionable metrics that matter to your business. They show if you’re making money or not, and directly contribute to your business success.
Here are examples of business KPIs:
4 Key Business Metric Examples:
1. Lead-to-Customer Conversion Rate
How many of your leads become paying customers? This shows the quality of your leads. It’s also called the sales conversion rate or just the lead conversion rate.
Why it’s important: It measures the performance of your company’s sales funnel. Are you able to convert qualified leads into actual sales?
How you calculate it:
How to improve it:
- Ensure your messaging highlights the value of your product/service. Let customers see how your offering can improve their lives.
- For example, if 10% of your leads convert to customers but competitors average 15%, adjust your sales pitch to emphasize unique benefits, such as faster delivery or cost savings, to close the gap.
- Create hyper-personalized and lead-nurturing marketing campaigns to move your prospects down the sales funnel. Use AI-powered marketing software or CRM for this step.
2. Customer Acquisition Cost (CAC)
How much does it cost you to get one new customer? A lower CAC means higher profitability.
Why it’s important: It shows the value that a customer generates.
How to calculate it:
- Zero in on high-quality leads to minimize marketing waste and increase conversion rate. These are leads that have a high chance of becoming customers. A CRM can help you determine this customer segment.
- Double down on cost-effective marketing methods such as SEO, content marketing, email marketing, digital PR, and social media.
- You can work with a marketing partner to scale your business growth through budget-friendly campaigns. GroXcelent integrates all your marketing from SEO to social media without breaking the bank.
3. Return on Ad Spend (ROAS)
How much revenue do you get for every rand spent on ads? This demonstrates the effectiveness of the ad campaign.
Why it’s important: It indicates the relationship between your advertising efforts and sales. Also, it shows how effective one campaign is compared to another.
How to calculate it:
- Learn from your competitors’ successful ads. Check where they allocate the majority of their advertising budget. For Facebook, look at the Meta Ad Library
- Fine-tune your keywords and ad bidding strategies. A paid marketing agency like GroXcelent has developed foolproof pay-per-click (PPC) frameworks to enable SMEs to achieve high ROAS.
4. Customer Lifetime Value (CLV)
How much revenue does a customer bring in over their entire relationship with you? This allows you to understand the long-term value of your marketing efforts.
Why it’s important: It shows how loyal a customer is to your organization and gives you an idea about your churn rate. Also, you can grasp your existing customers’ needs and find ways to invest in them. You can build long-term relationships with your buyers.
How to calculate it:
CLV = (customer value) x (company’s average customer lifespan)
Example:
How to improve it:
- Develop a loyalty program
- Focus on personalized marketing campaigns
- Improve your customer service
- Implement cross-sell and up-sell techniques
“It is always smart to keep your eye on revenue because everything else is a reflection of this number.” Visual IQ
Monitor the marketing KPIs in your business that show the real return on your investment.
Traffic & Engagement Metrics: What Numbers Show a Healthy Marketing Funnel?
TL;DR: Monitor traffic and engagement metrics to understand how customers interact with your marketing or brand.
These metrics aren’t for your bottom line, but they show the health of your marketing channels. You can identify problems by analyzing these numbers.
Consider the website performance metrics below.
Key Website Performance Metrics
5. Website Traffic
How many visitors come to your website? While this number doesn’t tell you the real customers, it allows you to see if your content resonates with some people. It’s not your North Star metric, but instead a data point that gives you some idea of your content’s value.
6. Brand, Topical Visibility, Mentions & Citations in AI Search Engines
Recent online data indicates a significant number of people globally turn to AI-powered search engines for answers. So, it’s vital to see if your brand or topics are visible in AI search.
That’s because if your brand isn’t visible in AI search engines, it’s challenging to improve your conversions, like sales.
How to improve it: Ensure your website is technically sound and mobile responsive through technical SEO. AI bots must be able to access and understand your content. Also, implement Generative Engine Optimization (GEO) tactics by using ultra-long-tail keywords, conversational queries, and FAQs into your content.
7. Bounce Rate
How many people leave your website after viewing only one page? A high bounce rate shows a problem with your website.
How to improve it: You can improve this number by strategically placing CTAs on your website, using visuals, videos, and a digestible content structure. Above all, write for the user.
8. Click-Through Rates (CTR)
Are your email campaigns effective? This metric indicates the number of people who clicked a link in your email. It could be a link to a blog post, an ebook, a research study, a sale, or a survey. The higher the CTR, the more effective your lead generation efforts are.
How to improve it: Zero in on refining your CTAs in the body of your email to improve this data point.
9. Conversion Rate
It tracks the number of clicks that led to a specific, meaningful action, such as requesting a demo, buying a product, or subscribing to a service.
How to improve it: Double down on optimizing your landing pages with benefit-driven CTAs, copy that mirrors your ICP (ideal customer profile), and a frictionless user experience.
Traffic and engagement stats are also important, as they let you see how customers interact with your content.
The GroXcelent Difference: How Does an Agency Simplify Marketing Metrics?
TL;DR: We track all the essential metrics for you. Our marketing analysts provide simple, clear reports that show you what’s working and how it impacts your revenue.
Not sure which KPIs to monitor? You don’t need to worry anymore because we do the legwork for you.
Our team of data experts keeps tabs on your brand & topical visibility in AI search engines and analyzes your conversion rates, CTRs, ROAS, and more.
You can see your progress in one place on our simple dashboards. A dedicated marketing analyst works with you to explain how each KPI affects your sales. This gives you a clear picture of your ROI.
Still not sure how to measure success? GroXcelent is an SME Growth Agency that makes it easy for busy founders to track KPIs that matter.
FAQs on Key Performance Indicators (KPIs)
| What are vanity metrics? A vanity metric is a measurable data point that appears impressive on the surface but falls short when it comes to showing real business growth. |
| What’s the difference between KPIs and vanity metrics? Key performance indicators are money metrics that enable you to see the connection between your marketing efforts and revenue. Vanity numbers are superficial statistics that don’t have any bearing on your bottom line. |
| What are the 4 key performance indicators? The 4 key business metrics for success include customer acquisition cost, customer lifetime value, lead to customer conversion rate, and ROAS in advertising. |
Stop Guessing Your Marketing Performance
Stop tracking vanity metrics. Focus on the money metrics that drive your business. These KPIs enable you to make smart decisions and grow your business.
Don’t get lost in data. Let our experts provide you with clear, actionable insights. GroXcelent is an SME Growth Agency for ambitious startups and growing SMEs. Our team of analysts empowers you to make sense of marketing KPIs. We’re laser-focused on your revenue.
Schedule a free strategy session with marketing analysts today! Discover real business growth.
