If you plan to have your own business on the Internet, you need to think like an entrepreneur. That means knowing how to measure and understand some metrics aimed at being successful in your actions and managing to monitor your results.
Knowing what each information generated by your business means is essential, because it helps to verify what has worked and what has not in your strategies. But before you start analyzing the results, you need to understand what you need to check.
First of all, you need to understand the difference between metric and dimension.
- Metric is everything you manage to measure in a certain universe.
- The dimension is the set of metrics.
But what does all that mean?
Think of the volume of trees in a forest. In this example, the number of trees is a metric, while the size of the forest, with its trees, is a dimension.
And why do you need to know it to produce and sell digital products? Well, that’s what we’re going to explain to you! in this post! Besides, you we will show the main metrics you need to know to improve your marketing strategies!
Ready to start measuring results?
Why is it necessary to think about metrics?
The creation of quality products is essential for the proper functioning of your business, but it is not possible to bet on luck if you have done it well. You need to pay attention to some processes that can measure everything you do. Excellent!
Good content marketing is one that deals with performance and results. And for that, it is important to think about metrics.
One of the biggest mistakes for those who think about this type of marketing strategy would be not to measure anything. However, measuring too much is not interesting either, because it hinders the processes. Therefore, the important thing is to find a fair balance for the frequency and quantity of measurement. of your results.
To determine what that balance is you need:
- Have a hypothesis.
- Test what you have presumed.
- Track metrics to see what got better or worse.
- From that, define the measurement frequency. This is essential so that you can make any necessary adjustments.
In addition, it is important to determine how you can achieve your goals and document all the strategies that will be used. Thus, you can perceive what did not work and adjust it to improve your results and not repeat mistakes. Or even the opposite: you can repeat strategies that have worked and make small adjustments to further improve your efficiency.
Difference Between KPIs and Metrics
Before even knowing what are the main metrics that every producer should look at, it is necessary to differentiate them from KPIs.
The key performance indicator (KPI, for its acronym in English) is the one that measures the performance of all the processes used by a company to achieve its initial objectives.
So, the KPI is the indicator that shows if your product or service managed to reach the initial determined objective. It is created from the metrics and is intended to show mathematically whether a certain goal has been achieved.
Metrics, on the other hand, are clear, simple and objective ways of monitoring and evaluating strategic processes. With them it is possible to measure the behavior of users on your pages. That is, they are indicators that show the involvement of the in each campaign.
A good metric is one that is:
- Punctual: that is, it is a result that arrives at the right time.
- Relevant – You need to show results that are really interesting and important to your business.
- Useful: it is necessary that the metric has some utility at that specific moment of analysis.
- Simple: when you look at the results, you must understand what they are for. Therefore, it is important to use easy terms that help to understand.
To better understand these differences, take a look at some examples of KPIs and metrics most used in e-commerce and digital marketing:
KPIs:
- Time spent by the user on the site
- Sales conversion rate
- Total revenue divided by total sales (average ticket)
- Number of newsletter subscriptions
Metrics:
- Customer Acquisition Cost (CAC)
- Lifetime value (LTV)
- Return on investment (ROI)
- rejection rate
Main metrics that should be used
If you want to achieve good final results, you must dedicate yourself to closely monitoring everything that happens in your business and on your website.
Not knowing how to correctly interpret the results obtained can make you make bad decisions about your next actions. And that can compromise the proper functioning and structure that you already have.
Before taking any action on the changes you need to implement you have to determine your goals. Knowing what you want to achieve will help you choose specific metrics aimed at making improvements concretely and correctly.
Some of the main objectives of content marketing are:
- Brand recognition as an authority on the subject
- Engagement of the public with the brand
- Client retention
- Generation of leads and new buyers
- educate the market
- Assist in the sales process
However, the choice of your goals depends on your service or product. So each business may have a different goal. The important thing is to know how to choose it carefully to better think about what results you will have to measure.
It is also important to think that measuring is something you always need to do. Remember to apply the use of metrics in the creation, execution and completion of everything you do, with which you manage to ensure that the results are more effective and objective.
1. CAC (Customer Acquisition Cost)
CAC is a metric that determines the value you spend to bring a new customer to your brand. That is, it is the value of each new consumer generated by your marketing strategy. For that reason, the marketing you are carrying out directly influences the cost of customer acquisition.
This metric is calculated by adding the cost of sales plus the cost of marketing.
Thus, if the CAC is high, it means that you need to review your marketing strategies and if certain services or products are really worth selling.
But if the results are the opposite, that is, a low customer acquisition cost, it means that your they are working fine.
This is time to decide if you can improve more. After all, even if something is working, you can always think of adjustments to make it even better.
2.Returning Customers
In its meaning in Spanish, it is registered customers. The customer return metric allows you to understand who are the people who have already bought your product or service and returned to make a new purchase.
It is very important to know the numbers of this metric well because it will help you optimize the results of some other product you have.
You have already paid for that lead (remember the CAC?), that is, he is already in your base and may have already bought something that you sell. So why not take advantage of the value already invested with that person and try to sell them again?
When you manage to sell again to a lead that you already had, you pay the cost of acquiring it again. That is, you charge twice for the same customer, even though you only spent to acquire it on the first sale.
In case your average number of returning customers is very low, you can collect the content you already have and create of value to catch the attention of your customers and enchant them again. This way you maintain their relationship with your brand and you can even sell another product to those leads later.
3. LTV (Lifetime Value)
The customer’s lifetime value (LTV) indicates how much the customer is worth to the business.
Do you know how long each customer stays with your brand? And how much does he spend during the entire interaction he has with your products?
Knowing these numbers means understanding the potential revenue and future profits that can be generated by a customer. That is, it is the value of the net benefit of each person during the time they are in contact with your brand.
The LTV is calculated from the multiplication of the buyer’s average ticket by the recurrence of those purchases during the months that they are your client.
4. ROI (Return on Investment)
Understanding what the return on investment has been is knowing if your product or service has managed to give a financial benefit after all the money you have invested in it.
This is a simplified and general financial performance metric that evaluates the profitability of your investments. That is, it has the objective of measuring if what you have done generated benefits.
To measure the you need to subtract the cost of the investment income, divide that result by the cost of what you have invested and multiply those results by 100.
5. Bounce Rate
With this metric you can identify the number of visitors who accessed your page only once and who, for some reason, did not continue browsing your site. Being able to quantify the number of unique accesses is important for you to see if your site or blog has good usability.
If the bounce rate is high, we suggest you think about ways to improve the user experience on your pages. This will increase the time people spend on your site, which can lead to more visitors, or even customers.
6. Average cash payment receipts
The average payment of these tickets is the metric that shows you the number of issued tickets that were actually paid.
And why is this metric important?
On average, cash payments represent 20% of the sales of a digital business. So, when you start working on the ticket conversion metric, it becomes easier to optimize your business and recover some sales percentages that were not being charged.
You can, for example, learn which are the best days of the week to issue a cash payment ticket and even try to understand which are the best payment dates according to the profile of your clients.
7. Average time to pay the ticket in cash
This is the metric that will show you how much time your customers spend from issuing to paying for tickets.
To achieve this metric is very easy. Simply collect the date the tickets were issued and the date they were paid and subtract those dates. Thus, you will see how many days a person spent to pay for a purchase made with a cash payment receipt.
This also helps a lot when deciding the expiration date of your tickets. If your customers are spending, on average, 3-4 days to pay for a ticket, it doesn’t make sense to issue a ticket with an expiration date of 2 days. If you do, the person may back out of the purchase because of the expiration date issue.
8. Refund rate
Have you ever stopped to think that when your payback rate is high, you’re losing all the money you’ve already invested?
We will give you an example to better understand:
If your rate of…
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