Shaun is a Growth Marketer at Lean Labs, working with deserving brands to create, implement, and optimize proven growth strategies.
Imagine you’re flying from New York to London. The plane has just taken off and you’re trying to get comfortable while sharing your armrest with a stranger.
All of a sudden a voice comes through the intercom, “Good afternoon folks, this is your captain speaking. I’d like to welcome everyone on Leftwing Flight 52B. I’d typically tell you what altitude we’re cruising at, but I’ve decided to complete this flight without indicators. I know the general direction we’re headed and I have great intuition. So just sit back, relax, and we’ll be arriving in London in like… a few hours.”
I don’t think you’d be sitting back or relaxing on that flight.
So then why do so many marketing leaders lead their team like this pilot? Growth marketing metrics are the indicators that tell you how well your plane is operating. Is the engine running smoothly while you cruise at the optimal altitude? Or is there a leak in the fuel pump or unnecessary drag?
By consistently measuring important and reliable metrics, your growth team knows exactly where to focus their energy. What needs to be improved? Where is there friction in the buyer’s journey? How can we make the marketing engine more efficient?
The “Truth North” Metric
The “North Star” metric. Have you heard of it before?
If you haven’t, think of it like this. What is the one thing you can track that determines whether your business is succeeding or not? At Lean Labs, we believe there’s one metric that rules them all: Growth.
Every goal you set and every metric you track should point towards growth. After all, if you’re not growing, you’re dying. That said, there are some metrics you absolutely must track and others more for vanity.
Equally important is to quash the misconception that growth marketing, with its experimental and agile approach, is just a series of quick wins. In fact, the best growth marketers are data-driven and track the metrics that matter over quarters and years to determine what is and isn’t working.
In this blog post, you’ll discover the key metrics you need to track and where they fit into the marketing funnel. Even if you only track these 6, you’ll be able to hone your strategy and scale your business.
What are Growth Marketing Metrics?
Before we dive into metrics, let’s recap what growth marketing is.
Growth marketing is a full-funnel approach to marketing that utilizes the buyer journey and the 6 Levers of Growth. At every step of the buyer journey, you win or lose customers depending on how you attract, engage, and ultimately delight them.
So, where do metrics come in? With six levers to focus on, you need to know whether your efforts will bear fruit or fall flat. Growth marketing metrics are indicators on the dashboard of your growth engine. They help you optimize performance and determine where to invest your energy.
A data-driven approach allows you to establish baselines, track progress over time, improve what’s winning, change what isn’t, and hone your marketing strategy. Does that sound difficult or complicated?
It doesn’t have to be.
With a platform like HubSpot, you have a single source of truth where all of your metrics live. You can take massive action, see results, and make the best use of your time.
That said, which metrics are most important to track? Read on to find out.
1. Awareness Metrics
First, what is awareness? Simply put, it’s how many people know who you are. This can be measured by tracking how many visitors come to your site each month, and how many people follow you and interact with your company’s content on social media sites and content platforms like Youtube or Medium. We typically recommend focusing on monthly site traffic.
Sounds simple, right?
It is, but there are nuances to consider.
Traffic for the sake of traffic is a vanity metric. If the people visiting your site aren’t interested in what you offer and aren’t likely to buy from you, what’s the point? You need the right kind of traffic.
The metrics you track must always be attached to a goal. Let’s say you want to drive more qualified leads to your website. How can you track that?
You might look at:
- Page views
- Time per page view
- Bounce rate
- Top traffic source
Identify pages that are performing well in terms of relatively high views, low bounce rate (less than 90%), high time per pageview (greater than 6 minutes), and high CTA click rate (greater than 1%). Knowing which pages are performing well allows you to reverse-engineer those pages to figure out what’s working, and then do more of that with other pages.
To dig deeper, you can break traffic down by page type. How many people are visiting your blog? Are they reading your articles? Do they take the next step?
Also, consider your product and service pages. If you’ve designed your website for cold, warm, and hot leads, are visitors moving through your buyer journey?
To dig even deeper, you can look at where traffic is coming from:
- Organic Search
- Paid Search
- Email Marketing
- Social Media (organic and paid)
You can track every single metric and create reports that inform your next strategy. Do you need to track every metric? That’s up to you and depends on the goals you’ve set.
Understanding where your most valuable traffic is coming from allows you to double down on that winning channel. Are 90% of your MQLs coming from organic social? Then go figure out what you’re doing right on social and do more of that.
Pro tip: Set SMART goals and watch your results transform.
2. Acquisition Metrics
The right kind of traffic coming to your site makes acquisition easier. Acquisition metrics focus on how many visitors you turn into qualified leads through forms, offers, and lead magnets.
Again, you’ve got to set goals and carefully create your offers and lead magnets to target the people most likely to buy from you. Acquisition guides Awareness. If your traffic isn’t converting on your lead magnets, are they the right fit?
The Acquisition Metrics to Focus On
The most important acquisition is monthly marketing qualified leads (MQLs). Why? These are the people who are aware of what you can do for them and are taking the next step on the buyer journey. They want to learn more about you and build a relationship.
What is an MQL?
A lead is any visitor who you have contact information for. It may be someone who subscribed to your newsletter, converted on a lead magnet offer, or booked a demo. But not all leads are qualified to buy from you.
Marketing qualified leads (MQLs) are leads that meet your minimum criteria to market to, and MQL criteria is unique to your business.
Some businesses will only work with companies that do over one hundred thousand dollars in revenue. Others only want clients who are based in North America. Still, others only work with companies that have more than 50 employees.
All of these are examples of MQL criteria and can be used to determine if a lead should be marketed to as an MQL.
As you can see, an MQL is a lead that has opted in to hear from us and meets our criteria for who we’re willing to work with. They might repeatedly visit our site, download a free resource, or opt-in to a program. They might not be ready to buy, but they’ll be more receptive to a sales pitch because we’ve built trust.
Keep in mind, we want MQLs to turn into SQLs (sales qualified leads)
Once you understand your MQL criteria and apply it to your sales system, you can look for trends. Look at your best customers: What channel did they come through? What pages did they visit? What offer did they convert on?
Determine which pages and offers convert the highest quality MQLs. Knowing why your customers choose you and what drew them in helps inform your marketing campaigns in the future.
Conversion Rate: The successful transition from one part of the buyer’s journey to another. Are your leads converting to paying customers? Are your marketing efforts nudging prospects closer to a sale? Where do leads drop off?
To calculate your conversion rate, simply divide the number of conversions by the number of people who took action and multiply the result by 100. For example, if 200 people sign up for your webinar and 50 buy, your conversion rate is 25 percent.
The conversion rate doesn’t only apply to customers making a purchase. Someone downloading an e-book or filling out a form is also a conversion.
Luckily, it’s possible to track conversions across multiple channels. Think about your touchpoints and the desired action you want customers to take.
- Lead magnet conversion
- Calls to action (CTA), both navigational and conversion
- Landing page visits and conversions
Pro Tip: Determine the conversion rate by channel for a particular offer. Maybe paid visitors convert at less than 1%, but organic visitors are north of 20%. These differences will skew the overall conversion rate of the page, and understanding this breakdown can inform your marketing. For this example, you’d want to direct paid visitors to a different landing page and send more organic visitors here.
3. Activation Metrics
Awareness and Acquisition feed Activation. In the Activation stage, you’re nurturing MQLs to become SQLs. How easy this is depends on the quality of your leads. You’re set up for success if you’ve done an excellent job of attracting your ideal customers and providing value to them.
Attaching a Lead Score is an excellent way of determining whether a lead is solid.
What is an SQL?
A Sales Qualified Lead (SQL) is a prospective buyer ready to talk to your sales team. In an ideal world, your marketing team qualifies them as a genuine lead. So basically, an SQL is an MQL who has taken a sales action, such as booking a call or requesting a demo.
Tracking SQLs and where they come from helps you understand whether your marketing efforts bear fruit.
Once a prospect takes a sales action, you can consider them ‘activated’. Of course, activation might mean different things to different companies. For a relatively inexpensive SaaS product, for example, an activation event might be when a customer creates a profile and starts using your product. For a high-ticket product, activation is typically when an MQL raises their hand to talk to sales, often by requesting a demo.
The easiest metric to track here is the activation rate.
Number of users who completed activation event / Total number of signups x 100 = Activation Rate (%)
A low activation rate indicates that your sales or onboarding process is too difficult or confusing. It might also mean your customers start using your product and realize it’s not for them. In which case, it’s back to the drawing board. Pass go and start again with Awareness and attracting the right leads.
4. Revenue Metrics
The fun stuff! We all want to make money, right? But how can you track revenue? We can break it down into bite-sized chunks and make it easy to understand.
Monthly Recurring Revenue (MRR)
The total revenue generated by your business from active subscriptions per month is called monthly recurring revenue.
Number of monthly subscribers x revenue per user = MRR
Example: If you have 10 subscribers paying $1000 per month, your MRR is $10,000.
As with all metrics, there are nuances. For example, you also need to calculate MRR from existing customers when they upgrade, as well as MRR from previous customers who decide to reactivate their subscription, and lost MRR from customers who decide to downgrade or cancel their subscription.
Annual Recurring Revenue is also valuable. If a customer purchases an annual subscription for $10,000, you know that money is coming into your business. It helps predict future growth and builds momentum for marketing and sales efforts.
Customer Acquisition Cost (CAC)
It’s all well and good celebrating when your prospect turns into a customer. But do you know how much it costs your business to acquire customers?
With the Customer Acquisition Cost metric, you’ll know how much you spend on marketing and sales efforts, and you can calculate marketing return on investment (ROI). To calculate CAC:
Choose a period (month, quarter, or year). Add together your marketing and sales expenses and divide the total by the number of new customers acquired during that period. For example, let's say in August, you spend $10,000 on marketing and sales. You also generate 100 new customers in that period.
$10,000 / 100 = $100
Each customer cost you $100 to acquire.
The obvious aim is to reduce the cost of customer acquisition. Doing so improves the health of your marketing, sales, and customer service departments. Reducing CAC while maintaining lead quality makes all of your marketing more profitable and sets your business up to scale growth profitably.
Launching a new marketing campaign will either help or hurt your company. Return on investment (ROI) is the amount of revenue generated from a campaign compared to the amount of money you spend on it.
It’s difficult to determine overall marketing ROI because marketing tactics are different and produce contrasting results. For simplicity, you want to get more than a dollar back for every dollar you spend. Anything less than a 2:1 ratio isn’t profitable. A great ratio is 5:1 (5 being revenue). Note that it’s easy to determine ROI for paid efforts but not so much for organic efforts. Why? Paid advertising tracks ROI automatically.
Organic marketing is a longer game and involves tracking numbers over time. HubSpot has a handy formula for calculating ROI here.
For a complete picture of marketing ROI, you’ll need to consider the time invested, the revenue generated, wages, overheads, and other expenses. Look at page analytics and non-financial returns such as engagement and unexpected traffic boosts.
Close Sales Rate
A simple calculation for your closing rate is:
# of new customers / # of SQLs = Closing Rate
Why is your closing rate significant? It links back to your other metrics. Are your marketing efforts producing quality leads? Are they sales-ready? The obvious additional benefit is tracking the efficiency and effectiveness of your sales team.
5. Retention Metrics
To get a complete picture of the metrics that matter, you must look at retention metrics. Crushing your marketing and sales doesn’t mean much if your customers don’t stick around.
It’s a solid idea to track how many customers you lose in a predetermined time period. Why? You need to know how customers leaving impacts revenue, and you definitely need to create ways to improve and reduce the turnover rate.
For companies whose customers pay regularly, churn rate is critical. And when it comes to growth, the lower your churn rate, the better. Think about your CAC. Do your customers stick around long enough to recoup the cost?
Churn rate calculation:
Lost customers / total customers at the start of the predetermined start period x 100
Let’s say you had 100 customers at the beginning of the month, and you lost 20 by the end. Divide 20 by 100, and you get 0.2. Multiple 0.2 by 100, and you get 20. Or a 20% churn rate.
Customer churn happens. What’s important is that you find out why a customer leaves. What can you do to prevent other customers from leaving for similar reasons? Interview existing and lost customers, analyze your product, talk to your customer service team, and evaluate your onboarding process.
Asking for feedback is a fantastic way to address problems and concerns before a customer leaves. Communicate proactively and build rapport with your customers, so they begin to view you as a trusted partner.
Customer Lifetime Value (CLTV)
Acquiring new customers can be costly. In fact, it costs up to 5 times more to acquire a client than keep a current customer.
Coupled with the statistic that a 5% increase in customer retention increases profits by at least 25%, it’s clear that you should consider spending a good proportion of your marketing budget on delighting and keeping the customers you already have.
CLV is the total revenue your business can expect from a single customer throughout their time using your product or service. The longer a customer is with you, the more likely they will trust and buy from you again.
The customer journey from the awareness stage to becoming an evangelist for your brand has to be spot on for your customers to stick around. Marketing, sales, and customer service teams all play a role.
When you identify the customers that contribute the most revenue to your business over time, you can serve them with products and services that make them happy and target more clients just like them.
Make your customer journey consistent. If you wow potential customers with content that helps solve their problems, you can delight them with a great onboarding process once they decide to work with you. Next, respond promptly to customer questions, queries, and complaints. Finally, better customer service keeps customers around, so always be on hand to provide an unparalleled customer experience.
6. Reputation Metrics
“Your reputation precedes you.”
Your customers might use that phrase positively or negatively. They either expect good things or wait for you to slip up. This is why it’s crucial to have positive reviews of your product or service in plain sight. And, by the way, you should be actively asking for positive reviews.
Number of Reviews
You want to increase the number of positive reviews and raise the average rating of your business on online forums and review sites. Reviews are social proof. Customers want to know if their needs will be met. Many quality reviews build trust and paint you in a good light.
Whether you want to attract new customers or retain your existing customers, take care to respond to positive and negative reviews to show that you listen to your customers and want to improve their experience.
Number of Case Studies
One of the most powerful ways to show a potential customer that you’re the company to go with is by showing them that you’ve already solved the same problem they have multiple times. A diverse set of case studies from companies large and small tells potential customers that you’re capable and trustworthy.
Case studies are one part of your overall marketing strategy. Think of the impact of the story, the video, the quotes, and the success of your current clients. Repurpose and redistribute case study content throughout the buyer journey to make the most of it.
Net Promoter Score
Unfortunately, customers with a bad experience are more likely to write a bad review, and they tell 3x as many people about it, too. Sucks, huh?
NPS stands for Net Promoter Score. In a nutshell, it measures how likely your customers are to recommend not just your product or service but your brand as a whole to a friend or relative.
You’ll need to survey your customers to calculate your NPS. Simply ask, “On a scale of 1-10, how likely are you to recommend us to a friend?
Here’s what the scores mean:
- 9-10: NPS Promoter, loyal customers who will bring in more business.
- 7-8: NPS Passive, indifferent customers who might promote you but could easily switch to your competition.
- 0-6: NPS Detractor, unhappy customers that could damage your brand by sharing bad experiences.
Don’t be afraid of these numbers. Use them to define risks, opportunities, and ways to improve. Don’t just track the number and ignore it. Follow up with customers. What do they appreciate about your service or brand? What don’t they like? Where would they want to see improvements?
Reviews, case studies, and NPS. All three point to how people perceive your brand and the value you provide.
How to Choose Which Growth Metrics to Track
While we believe you need to track these six metrics, it might initially feel overwhelming. So pick a goal.
Let’s say you’re launching a campaign:
- What are you trying to accomplish with this campaign?
- How does it relate to the business outcomes?
- Will it drive growth?
For example, if you’re trying to drive awareness, you’ll focus on website traffic and driving quality leads to your pipeline. A tool like the Growth Grader, which you can find at Growthgrader.com, can help you evaluate your marketing funnel holistically to identify the highest-impact metric to target each campaign.
Growth Marketing Metrics: Look to The North Star
The one true metric is growth. We recommend tracking quarter-over-quarter revenue growth. Every other metric is a leading indicator of future growth. These can help you determine the most significant opportunities to improve your sales funnel and increase revenue growth.
If the metrics you track don’t point towards growth, they’re probably not worth tracking.
Traffic for the sake of traffic doesn’t help you convert more customers. The number of people who spend time on your page, navigate your website, and convert on CTAs is part of the traffic profile you want to track.
A platform like HubSpot stores your analytics and provides a ton of data that’s actionable, including reports. For a CRM and sales platform, it’s a cut above the rest.
Lean Labs works with our clients to drive massive growth. With all of our clients, we use a tool we developed to help us determine the most valuable lever of growth to target each campaign.
The Growth Grader helps you analyze your current marketing metrics to determine where you are strong and where there are gaps. We use this tool with every client each campaign to decide which one metric we will work to improve during that campaign.
We decided to make our most valuable growth tool free to our readers, and you can get access here: GrowthGrader.com.
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