While many B2B and B2C marketers have similar goals, their audiences can be vastly different. Each group faces different challenges and applies different strategies. This also means that the marketing metrics and KPIs (key performance indicators) B2C marketers use to measure campaign performance are different from their B2B counterparts. The primary purpose of a marketing metric is to measure progress and boost performance. Here are seven B2C marketing metrics that you should prioritize most frequently.
1. Social Engagement
If you’re seeing a “Vanity Metric” red flag here, I don’t blame you, but hear me out: Customers rate recommendations from friends and family as the most significant influencer when they make buying decisions, and recommendations from members of their social media circle rank third.
This means that social engagement indicators such as likes, followers, comments, and shares on social media or your website can play an enormous role in your customers’ perception of your brand and their decision to buy. Monitoring, responding to customers, and optimizing for social engagement should be key for most companies’ sales and marketing strategy.
Optimizing for social engagement means measuring it. Each social network will have its own metrics and key indicators that matter. For example, on Instagram, it can be valuable to track your post engagement rate to know what types of content your audience values. Post engagement rate is calculated by dividing the number of likes and comments a post gets by your follower count.
For example, if your post gets 70 likes and 7 comments from an audience of 2,500 followers that is a post engagement rate of just over 3%.
While I don’t recommend defining business success solely on social media popularity, turning a blind eye to social engagement would be a big mistake.
2. Website Traffic
Website traffic is another marketing metric that is frequently red flagged, and it’s well justified: Raw page views hardly provide actionable insight.
That said, MarketingProfs’ B2C Content Marketing 2016 report explained that, while their survey showed sales ranked highest on metric importance overall, the most effective B2C marketers rate website traffic as more important. So what do those elite B2C marketers know about website traffic that everyone else doesn’t?
They know the key to getting value from website traffic: Attribution. Without it, traffic is essentially meaningless—you have no way of telling if a website visitor had intent to purchase, or if their visit was accidental. But with a tight attribution system, you know which campaigns drove the most traffic to your site, how engaged visitors were with your content, and what paths they took through your site. Attribution turns traffic into people and gives you the insight you need to optimize their experience with your brand. This is why most companies would benefit from measuring at least basic analytics, such as traffic and conversions, on their sites.
3. Conversion Rate
Conversion rate is where the rubber meets the road: It’s where you can see what percentage of traffic delivers tangible business value.
Typically, conversion is defined as making a sale and turning a website visitor into a customer. However, that definition can also be extended to include any action you most want a visitor to take. Maybe you want them to subscribe to a newsletter, download a mobile app, or follow you on social media—all of these can be considered conversions (or at least mini-conversions), and they all matter as part of your strategy.
The formula for calculating conversion rate is the number of conversions divided by the total number of visitors, expressed as a percentage. For example, if you have 500 visitors to a campaign landing page, and 45 of those visitors convert, you have a conversion rate of 45/500, or 9%.
This metric will help you to measure not only the effectiveness of your campaigns with acquisitions, but also the overall success of your business.
4. Lead Quality
Lead quality is a tricky metric to measure for B2C marketers, especially because B2C customers usually have a shorter decision-making process with fewer stakeholders than B2B marketers do. B2C businesses of all sizes and in all industries can struggle with measuring lead quality, and methods vary widely.
While some businesses may be able to apply a lead scoring system with highly-defined conversion points, many B2Cs will measure lead quality more indirectly. There’s no plug-and-chug formula. Instead, lead quality is defined using a combination of other metrics.
At its foundation, lead quality is about being able to make the right offer to the right people at the right time—essentially, it’s the core purpose of marketing. You have to measure the impact of your campaigns and run measured A/B testing wherever you’re able. As you sharpen this process, your overall lead quality will improve because you’ll be armed with the knowledge necessary to better target your best audience, perfect your offer, and hone your timing for optimal results.
5. Customer Retention and Loyalty
Customer retention and loyalty is a priority for B2C marketers. While B2Bs often enjoy the buffer of a multi-month contract, B2Cs typically face a shorter relationship with customers—unless they take steps to change it. But that analysis all starts with understanding how well you’re retaining customers.
Retention rate is measured with a simple formula where CE is the number of customers at the end of the period, CN is the number of new customers acquired during the period, and CS is the number of customers at the start of the period:
So, for example, if you start the month with 150 customers, gain 25 new customers, and lose 5 so you finish the month with 170 net customers, your retention rate would be ((170-25)/150) * 100 = 96.6%. Pretty simple, right?
Loyalty is one of the essential levers to move the retention rate needle, but how do you measure and improve something as intangible as loyalty? That’s where the Net Promoter Score (NPS) comes into play.
The NPS measures customer loyalty based on willingness to recommend the company, product, or service to a friend or colleague on a scale from 0 to 10. This number provides a bird’s eye view of customer loyalty, but soliciting further feedback is where the real insight is found. Although it doesn’t translate to a numbered score as easily, the reasons your customers are or aren’t loyal to your company can help you identify critical opportunities for improvement.
Since returning customers are typically more valuable than new customers, this is an essential metric to track for any company.
6. Marketing Revenue and Sales
In their book, Does It Work?, Shane Atchison and Jason Burby cite the example of the public service campaign Dumb Ways to Die, produced by the Melbourne Metro in Australia. Although the video went viral with over 100 million views and received several awards, later analysis showed that the campaign failed in its primary goal: to improve reckless behavior around trains.
Marketing has become notorious for this kind of grandiose “miss”—when campaigns are creatively stunning but fail to produce the desired results. In a 2012 study, the Fournaise Group showed that 80% of CEOs did not trust marketing teams because they felt marketers were too disconnected from business objectives. Ouch.
Since then, marketing has begun to make a major shift in priorities: It’s no longer enough to produce excellent creative work. That work has to produce business results, specifically revenue, and be able to prove it with KPIs and data.
To accomplish this, B2C marketers need to be able to calculate what percentage of revenue and sales is directly attributable to marketing. (This, again, is why a solid marketing attribution process is crucial for success.) For further marketing insight, calculate revenue by campaign.
7. Marketing ROI
When MarketingProfs asked about content marketing challenges, 46% of B2C marketers said measuring ROI was in their top 5. This is troubling, since not only is ROI important to prove marketing’s value to the C-suite, it also plays a major role in determining budget.
However, once marketing’s portion of revenue has been calculated, overall ROI is simple:
If your marketing attribution process allows you to calculate revenue by campaign, you can also calculate ROI for each based on individual campaign spend in order to better understand your marketing effectiveness.
Your Unique Data
These seven metrics are some of the most frequently used, and they address the most common goals of B2C marketing teams. However, metrics lists are never one-size-fits-all: Your business is unique, even among B2Cs, and you will need to evaluate the key performance indicators that most effectively measure progress toward your team’s specific goals.
At Grow.com, we want to make it simple for you to get value from your data. That’s why we pair every customer with a data analyst who helps identify the metrics you need to track and then builds them on your marketing dashboard. You know what you want to achieve—let us do the heavy lifting. Click here to sign up for a demo today!