A CMO’s advice: Don’t panic. Open rates were vanity metrics anyways. Here are the metrics you really want to measure.
If the data privacy changes with iOS 14.51 and Google Chrome2 weren’t enough, Apple’s come out with another update that has marketers panicking: Email open rates are going away in iOS 15. And as consumers request more control over their privacy, we can only expect Google and other service providers will follow suit.
But don’t worry, open rate has always been a vanity metric anyway. It doesn’t indicate true engagement, so it’s unreliable to tie back to your business goals. As open rates follow third-party data out the door and businesses focus on Customer-First Data™, it’s all the more important to measure the things that will show the actual impact of your marketing efforts on the business. The metrics you measure depend on your goals.
The problem with vanity metrics
Vanity metrics look exciting. As marketers, we drool over upward climbing graphs of social likes and followers, website visitors, email subscribers, and more. They can make us think our marketing efforts are paying off. But in reality, they don’t tell us anything about business growth.
Likes and followers on social media can be purchased or come from bots. Plus, even real likes don’t indicate true engagement. How long do you really linger on a post as you’re scrolling through your feed? Many people give it a double-tap and move on.
Website visitors mean nothing if that traffic isn’t qualified. How many of those visitors are signing up for your email or SMS list or making a purchase? If you have increased website traffic but your conversion rate has plummeted, the efforts that resulted in increased traffic aren’t working.
And once someone is subscribed to your texts and emails, are they engaging with your content? You’ll need to track click-through rate and revenue growth alongside list growth. It does nothing for your business if you convert the wrong people to your subscriber list.
You need to choose metrics that signal engagement and growth.
The metrics that matter (it depends on your goal)
When you pay attention to the right metrics, you can make more educated business decisions.
Know what your goal is, then start by looking at a few of the metrics below.
Goal: Increase retention
As advertising acquisition costs skyrocket and third-party data goes away, turn more attention to your current customers. You have tremendous leverage at the bottom of the funnel. Engage your interested, high-intent customers to drive higher lifetime value (LTV), more repeat purchases, stronger loyalty, and greater word-of-mouth.
Use these actionable metrics to analyze your customer retention strategy and figure out what is and isn’t working:
- Lifetime value (LTV) — aka customer lifetime value (CLV): Actionable metric #1. As far as retention goes, it all needs to lead back to the revenue you earn from customers over time.
- Percentage of revenue from Owned Marketing channels: It’s not enough to have subscribers or even clicks. What channels are bringing your customers back for more?
- Customer happiness: Track scores like net promoter score (NPS) regularly to know how satisfied your customers are post-purchase. This can indicate how likely they are to come back.
- Purchase frequency: Purchase frequency varies widely depending on if your customers are purchasing products built to last a long time or something more consumable. Tie purchase frequency back to product type and other metrics like customer happiness to identify if a dropping purchase frequency could be due to the nature of the product or a bad experience. Customer loyalty programs are great for increasing purchase frequency.
- Average order value (AOV): It’s cheaper and easier to retain an existing customer than convert a new one. So increase AOV with your returning customers to get more bang for your buck. Bundle products or offer incentives like free shipping or gifts for a higher cart value.
Now that you know the health of your retention efforts, you can make real changes based on performance. Check out these customer retention strategies to implement in 2021.
Goal: Improve acquisition
With increased advertising costs and the loss of third-party data, it’s all the more important to make sure your marketing efforts are as efficient as possible. Use these metrics to make sure your focus is on the right place:
- Percentage of revenue from Owned Marketing channels: Like with retention, it’s essential to know how your email, text messaging, and website are contributing to customer growth.
- Average order value (AOV) for new customers: One of the best ways to offset the cost and effort of acquiring a new customer is to increase AOV. Boost AOV by advertising bundles, recommending complementary products at checkout, or offering incentives like free shipping and gifts.
- List growth and revenue growth in tandem from email and SMS channel: If acquisition is the goal, you want your email and SMS growth to lead to something other than a long list of subscribers. Be sure to track how subscriber growth correlates to revenue growth.
- Website conversion rate for new visitors: When you know how many website visitors convert, you can drill down to referral sources to make sure you’re getting the right people on your website and identify opportunities to improve the page prospects are landing on.
- Funnel metrics like cart abandonment and browse abandonment rate: Where are potential customers falling off? Know these numbers so you can see if your improvements to the customer journey are paying off.
Ready to boost your acquisition strategy? Check out these customer acquisition tips to win more customers.
Goal: Grow brand awareness
Gaining customers starts with discovery, so don’t forget about your brand awareness strategy. Consider these actionable metrics to define your goals around:
- Social shares: Substitute likes and followers for social shares. When people share your content on social media, they value it enough to pass it on to others, and it indicates a deeper level of connection to your content.
- Video engagement rate: To really understand if a video is working, you need to go beyond view count. How long is your audience watching your videos? Where in the video do they stop watching? Are any parts being re-watched? These answers can influence how you create new videos.
- Email and text messaging opt-in conversion rate: This is better than counting website traffic or total subscribers in isolation. If you’ve increased traffic but conversion rate is low, you’re not getting the right people on your site.
- Click-through rate (CTR): As far as engagement goes, CTR is better than open rate to indicate engagement. There are so many reasons a subscriber might open your email that have nothing to do with interest. Maybe you had a catchy subject line, or they’re simply opening to unsubscribe. Or, when a spam detector is scanning a message, that can also count as an open. So leave open rate in the past and measure CTR instead.
Looking to up your awareness game? Now is the perfect time to invest in SEO. You get the benefit of new eyes from relevant search terms without the cost of advertising. Read how to boost your organic search rankings.
Prove the value of your marketing efforts with metrics that matter
The data privacy changes are uprooting everything we’ve come to depend on as ecommerce marketers. But the change doesn’t have to be painful.
Look at this as an opportunity to create great experiences your customers want to be a part of. Use the right Customer-First Data to fuel personalization efforts and measure metrics that matter to make the right business decisions. Your business will be better for it.
Data privacy changes still freaking you out? Take a breath and read about the data privacy changes and what it means to be customer-first. You’ve got this.
1“You have control over what you share.” Apple.com
2“Charting a course towards a more privacy-first web.” Blog.googleBack to Blog Home