A:

Marketing is an essential facet of business operations regardless of industry, consumer base or business size. There exists a need to continuously connect and engage with new prospects while maintaining fruitful relationships with current customers due to the increased level of competition in the marketplace. An organization implementing a marketing strategy faces the risk the marketing campaign will fall short of its intended goal. However, closely monitoring metrics that track the progress of marketing initiatives helps an organization invest marketing dollars wisely. The performance metrics used in tracking the effectiveness of a marketing campaign include total and unique visitors, origin of traffic, bounce rate, total conversion, lead to close ratio and customer retention rate.

Total and Unique Visitors

A main component of a marketing mix in the business environment is the use of a company's website to inform, connect and engage with consumers. Total visits to a website provides insight into how well a marketing campaign aimed at driving traffic performs over time. Total unique visitors is also an important metric as it provides information on the number of single or recurring visits to a website. A marketing campaign is effective when total visits and unique visitor metrics increase throughout the campaign.

Origin of Traffic

A number of businesses have embraced the use of social media sites to boost brand awareness and relay ongoing marketing messages to current and potential customers. The purpose of social campaigns is not necessarily to drive traffic to the social media site but rather the company's website where additional information is gathered and purchases are made. The effectiveness of a marketing campaign that focuses on driving traffic to a company's website through outside sources can be measured through the origin of traffic metrics. If total visits to the company's site are generated from social media, the marketing campaign is deemed successful in its reach.

Bounce Rate

Another important metric in marketing is the bounce rate as it provides the percentage of visitors to a company's website that leave shortly after visiting. Bounce rates are high when a number of visitors click through to a website but do not click any additional links or request information from the company. A low bounce rate provides a greater chance of visitors completing the task the marketing campaign was intended to produce. These results often include filling out a contact form, signing up for a newsletter or completing a sale.

Total Conversion and Lead to Close Ratio

An important measure of marketing effectiveness is return on investment (ROI) quantified by total conversions and the lead to close ratio. Conversions equate to success for the organization and most commonly come in the form of completed purchases. A company's lead to close ratio measures how effective sales efforts are after a customer engages with the marketing campaign. Both conversions and lead to close ratios are high when a marketing strategy is connecting with consumers in a meaningful, profitable way.

Customer Retention Rate

Companies must also work to retain current customers through their marketing efforts. A subscription-based business model and an e-commerce company can easily measure the number of customers who return for repeat purchases. Retention rates are often higher for the organizations that focus a segment of their marketing strategies on past or current customers.

RELATED FAQS
  1. What factors should a company consider when creating a marketing budget?

    Understand the process of creating a marketing budget, and learn the specific factors that should be considered for any company ... Read Answer >>
  2. What metrics are most commonly used to evaluate companies in the electronics sector?

    Learn what metrics are most commonly used to evaluate companies in the electronics sector and the specific qualities of each ... Read Answer >>
  3. Why are efficiency ratios important to investors?

    Learn about efficiency ratios, such as the asset turnover ratio, and why these metrics are important to investors when analyzing ... Read Answer >>
  4. How do Internet companies profit if they give away their services for free?

    Learn how companies in the Internet sector make a profit when service, content and user applications are offered at no cost ... Read Answer >>
  5. What price metrics can be used to compare companies in the industrial sector?

    Discover some of the best equity evaluation measures that investors and analysts commonly use for comparing companies in ... Read Answer >>
  6. How do I use the debt ratio to decide when to invest in a company?

    Understand the calculation and interpretation of the debt ratio and how this metric is used by investors to analyze a company's ... Read Answer >>
Related Articles
  1. Financial Advisor

    A Financial Advisor’s Guide to Google Analytics

    Google Analytics is a great tool to help advisors measure the effectiveness of their web efforts. Here's a quick guide.
  2. Small Business

    How to calculate the return on investment (ROI) of a marketing campaign

    Learn to make the most of your marketing spending. Know how to measure its results by calculating the return on investment (ROI) of a campaign.
  3. Small Business

    How To Monetize Your Website

    New technologies and services have made it easier to make money from your website than ever before.
  4. Financial Advisor

    Financial Advisors Should Try These Digital Marketing Tools

    Advisors don’t need to be digital marketing experts to reap the rewards of being online. All they need to know is where to find the right resources.
  5. Financial Advisor

    An Example of an Advisor's Successful Marketing Plan

    With more investors using social media, financial advisors are moving their marketing online. Here is an example of a digital marketing plan for advisors.
  6. Financial Advisor

    This is What a Great Advisor Website Looks Like

    It’s not enough to just have a website. Here are three amazing advisor websites that go above and beyond.
  7. Financial Advisor

    Websites: The Front Door to Your Advisory Practice

    Having a vibrant and dynamic online presence is for many organizations even more important than having an actual brick and mortar office.
  8. Financial Advisor

    How to Nail Your Advisory Firm's Website

    Your website can be your most powerful tool for generating leads and establishing credibility and expertise. Here are tips on how to maintain it.
  9. Financial Advisor

    Are You Marketing Your Advisory Business Efficiently Online?

    Too often, advisors do not use their time efficiently when building and managing an online presence.
  10. Investing

    Financial Advisors: Social Media Is a Gold Mine (FB, TWTR)

    Learn how social media is a gold mine for financial advisers. Maintaining a social media presence enables you to reach customers, and it provides social proof.
RELATED TERMS
  1. Metrics

    A wide variety of tools that managers and executives can use ...
  2. Soft Metrics

    The intangible elements that define the presence of a company ...
  3. Social Media Optimization (SMO)

    Social media optimization (SMO) is the use of social media networks ...
  4. Cost Of Acquisition

    Cost of acquisition is the total expense incurred to attain a ...
  5. Social Networking

    The use of internet-based social media programs to make connections ...
  6. Phishing

    A method of identity theft carried out through the creation of ...
Hot Definitions
  1. Receivables Turnover Ratio

    Receivables turnover ratio is an accounting measure used to quantify a firm's effectiveness in extending credit and in collecting ...
  2. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations.
  3. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  4. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  5. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  6. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
Trading Center