oday’s post was written by Solomon Twum, General Manager of 3rd Floor Limited, a leading digital marketing agency with branches in Ghana, Nigeria and Kenya.
For any SME or a Start-up, there is usually the challenge of limited resources for marketing activities. Measuring the performance of your marketing is crucial to ensuring you’re getting the most out of your efforts. To do this you need to understand and know how to manage and implement metrics.
The most common metrics used for measuring marketing performance are discussed below:
1. Customer acquisition and growth rate
This metric measures the conversion of enquiries into sales or paying customers. It takes time to build, but it is important organisations in the start-up sector monitor this on a monthly basis. What this metric does for your small business is to provide a basic gauge of product acceptance in the market. It will also determine what new strategies are needed to increase market share as you seek to grow the business.
2. Product development response
This is another measure of marketing performance for a start-up business. The product development response is the speed at which areas of the product or service that are not good as they should be, are rectified or turned round. For a start-up business, this is very important, since it allows the company to ensure customers are satisfied from the onset. Once you are able to ensure customer satisfaction from the very onset, it makes it difficult for the few customers gained to consider other alternatives being offered by the competition.
3. Cash-burn rate
This is a measure of how soon it will be, at current expenditure rates, before the available cash for marketing activities runs out. As a start-up business, keeping an eye on cash is a very important measure. This helps us appreciate how long the organisation can continue to fund its marketing activities, so it can start growing.
All of the measures discussed will help the start-up subsequently obtain “hard” data metrics, such as new customer gains, customer acquisition costs, cost per lead, new product purchase rate and activity ratio for social media activities among others.
Are there any other metrics you use when measuring your marketing activities?