Ninety percent of the world’s data was generated in the last two years.
By 2012, it reached 2.8 zettabytes (1 zettabyte equals 1,000,000,000,000 gigabytes), and experts projected that it would double by the end of this year.
I’d say we’re on track to do just that.
There’s no denying the amount of data we now have access to. What we may not realize is how useful it can be. Here’s what MIT Technology Review says:
Nearly any type of data can be used, much like a fingerprint, to identify the person who created it: your choice of movies on Netflix, the location signals emitted by your cell phone, even your pattern of walking as recorded by a surveillance camera. In effect, the more data there is, the less any of it can be said to be private, since the richness of that data makes pinpointing people “algorithmically possible,” says Princeton University computer scientist Arvind Narayanan.
Creepiness aside, as marketers, isn’t that we’re trying to do? To find our target market and figure out where they go online so we can put our message in front of them?
Data is how we do that.
The trick is to know what data you need to pay attention to.
So the question I’m asking today is not whether you track and use data but whether you’re using the right kind of data to get real results from your marketing.
In this article, I’ll look at the metrics you need to grow your business.
Metric number one: pageviews. They’re useful, right?
Wrong. Here’s why pageviews do NOT matterReal metrics provide answers. Vanity metrics provide eye candy.
For example, it’s always fun to open up Google Analytics and drool over the traffic reports. Your time isn’t entirely wasted, because there could be some therapeutic relief attached to the act.
But you don’t gain any valuable information about your site by going through traffic reports.
In fact, pageviews can be a negative measure of growth. If your site’s navigation is complicated, visitors will need to click on multiple pages to find what they’re looking for.
When your pageviews increase, your bounce rate becomes something unheard of in the industry—but UX goes down the drain. Someone who made the mistake of visiting your site once won’t do it again.
There are other things you should focus on—the metrics that really matter.
1. Conversion Rates
Your conversion rate is not only about converting raw traffic into paying customers. It’s also about identifying the traffic channels that are converting the most for you.
Is it organic traffic? Paid marketing efforts? Guest posting?
Are the keywords you are currently ranking for bringing you sales?
A little competitor research may help. Is a competitor consistently ranking better than you? Ahrefs position tool can help you find out which keywords they rank for and make money off of.
For example, I looked up Crazy Egg, and here’s what I learned.
Another easy way to measure the results of different marketing campaigns is to append a UTM parameter to the URL.
An ad on Facebook with UTM parameters looks like this:
You will find hundreds of case studies where conversion rates have risen by 100% or 200%. Don’t be disillusioned. Remember your goal here. It’s not to lift conversions to 200%.
The goal is to do better than you did before by studying the right metrics.
2. Facebook likes vs. Engagement
Facebook likes are not the same as engagement. Hundreds of tools out there thrive on vanity metrics. That is, they show you the number of tweets, likes and shares.
Unfortunately, these metrics don’t help you in any way.
In fact, a large number of Facebook likes may indicate that your fan page is full of bots.
Jeff Selig, the CMO of the social media marketing firm BostonMediaDomain, says,
“Marketing on Facebook is now about curating a following as opposed to just building numbers.
We gave up on [likes] ages ago. If you take likes out of the equation and you are actually selling something, I think you’re better off. I think the days of the popularity contest are over.”
How can you build a following?
By sharing content that resonates with your online audience. You should effectively be able to tell your stories.
Let’s look at the example of AutoBlog, a popular website in the automobile niche. Its Facebook page boasts over 416,000 likes, but a recent status update gathered a mere 31 likes.
What’s wrong with Facebook these days? Maybe it’s the content we’re posting.
Things at Carbuzz’s Facebook page—boasting 1.5 million likes—are different. Let’s look at some of their post headlines and their Facebook shares:
- The Mercedes 2025 Concept Truck is an Awesome Robotruck (37,575 Facebook shares)
- How Much is Ferrari Really Worth? (37,847 Facebook shares)
- Ford Racing Reveals Mustang GT King Cobra (47,680 Facebook shares)
Compare this to headlines on AutoBlog:
- Bentley EXP 10 Speed 6 gets positive reactions on auto show circuit
- Lamborghini Aventador SV production limited to 600 units
- 2015 Callaway Corvette Z06 gets new supercharger
With such boring, keyword-stuffed, SEO-optimized headlines, it’s no wonder humans don’t find the content interesting. There’s only one post that I somewhat liked: “Cars owned by Notorious Dictators.”
I’m not suggesting that you sacrifice news for spicy content, but adding a little spice can surely help.
3. The lifetime value of a customer
The Customer Lifetime Value, or CLV, is a prediction of all the value that a business will derive from its relationship with a customer.
In fact, it depends.
If the Cost of Acquisition (the money spent on acquiring a new customer) is higher than the lifetime value of the customer, then your business will fail in the long run.
This table can come in handy when determining where to put your money. (CAC refers to Customer Acquisition Cost.)
|Location||Total Spend||Customers||CAC||CLV||Revenue||Profit *|
|Lake Microsoft (Bing)||$250||25||$10||$100||$2500||$2250|
As you can see in this table, Adwords seems to be the cheapest method for acquiring new customers.
Should you spend your entire budget on Adwords?
As it turns out, Customer Acquisition Cost is only half the story. If you turn your attention to the third channel, Bing (Lake Microsoft), you can see that the Customer Lifetime Value for those leads is the highest.
In the long term, these are the customers who will make your business profitable.
How do you apply CLV to your business?
According to CustoraU, you need to approach lifetime value from the perspective of 4 things:
- Acquisition medium
The metrics you need to watch are the ones that tell you where people are coming from and how much they spend over time.
The first product purchased may not indicate customers’ total value to your business. They may enter through low-value products but upgrade to high-value products or become repeat purchasers of high-margin products.
Based on the data, you’ll be able to assess whether you’re underspending or overspending on customer acquisition. It will also tell you which channels deserve the lion’s share of your attention and which keywords are delivering your best customers.
The facts is in. Your success depends on your ability to find the data that connects you with your target audience so you can build your business—and your profits.
Don’t worry too much about tracking metrics like Facebook likes, Twitter followers, Pageviews, and so on. These are vanity metrics that do not actually help you.
Instead, try to gather real feedback from customers. A real business is built on the relationships you build with your customers.
Using metrics like customer lifetime value and conversions, you can see what’s really putting dollars back into your pocket—and use that knowledge to get measurable results.
What your favorite piece of data? And what does it tell you to help you optimize your conversions?
- Analytics and Conversions: Let Data Supercharge your Marketing - August 6, 2015