[Infographic] Four Marketing Metrics to Track During (and After) a Global Crisis
The coronavirus pandemic has changed the way many small businesses have had to operate over the last month or so. Although there is discussion of some local governments lifting stay-at-home orders soon in order to improve their economies, we will be seeing the effects of this crisis for quite some time.
This “new normal” will be much different from the way things were before. Many small businesses will feel the need to cut back on costs, and may look to marketing costs firsts. As a marketer, this breaks my heart, because as my favorite quote by Henry Ford says:
Stopping your advertising to save money is like stopping your watch to save time.
Nonetheless, your marketing budget will need to change. Here are some metrics that you should start tracking now to help you understand how to evolve your marketing budget in this “new normal”.
Change in Customer Lifetime Value
Customer lifetime value (CLV) is the total amount of money that a customer is expected to spend with your business during their lifetime. CLV can be calculated in different ways based on the type of small business you own, but the basic formula is:
[average value of a purchase] X [number of purchases from a customer per year] X [length of customer relationship in years]
If you have seen a drastic decrease in business from repeat customers, your CLV has probably decreased as well. For example, if you own a small coffee shop, and your regular customers have been coming in less frequently because they are working from home, the average amount of money they spent with you has gone down.
The specific metric you should identify here is the change in CLV that you have seen since the pandemic started affecting our country. This will help you determine how much money you should be spending to acquire new customers (which we will talk about in the next section).
To Track: Use sales numbers from before the year 2020 to see what your CLV was pre-COVID-19. Then calculate CLV using sales numbers from this year to compare the change. As local shelter-in-place mandates are lifted, it would be a good idea to contine tracking this metric as your local economy opens back up.
Change in Customer Acquisition Cost
Customer acquisition cost (CAC) is how much it costs your business to acquire a new customer. This is calculated by by adding up all of the marketing and sales costs associated with earning new customers (or converting existing customers into repeat customers) and dividing that number by the total number of customers won over from those efforts. Here is the formula written out more clearly:
[total amount spent on marketing and sales] / [number of customers won from those efforts]
Again, in the midst of this pandemic, we want to track the change in CAC. When you compare this number to the change in customer lifetime value, you will be able to effectively determine how much money (and time) you should be spending on your marketing efforts to attract new customers.
Going back to the coffee shop example, if your CLV has dropped from $250 to $150, you want to make sure that your CAC hasn’t increased to above that number. So if a $150 Google Ads campaign doesn’t bring you any customers, it’s time to reduce that budget, or look for other ways to spend that money that will be more effective—like SEO!
To Track: First, track all of the hours spent on marketing, as well as the costs associated with that time. Add it to any other marketing costs—think ads on Google or social media, email marketing platforms, etc.—and divide that number by how many customers were won over from those efforts. If you’re not sure, give your best guess based on conversations you or your staff has had with new customers.
Recalculate this number any time you calculate your CLV. These two metrics go hand-in-hand when it comes to developing your marketing budget.
Social Media Engagement
Predictions show that more people are spending time on social media while staying at home, which is why it’s so important to continue communicating with your customers on social.
With this in mind, make sure to keep an eye on your social media engagement. Social engagement is defined as shares, likes, and comments on your posts on social media. This is a great way to measure the success of your social media efforts, even if sales are down. The focus here should be on building and maintaining a relationship with your audience so that when they’re in a better position to buy, your brand will be at the top of their mind.
Nancy Kapoor writes for Social Media Today that interactive content as a digital marketing strategy will skyrocket this year. That’s because interactive content like 360-degree videos, quizzes, and polls are, by nature, a call-to-action. Interactive posts on social media can not only be shoppable, but shareable as well.
Photo by ROBIN WORRALL on Unsplash
To Track: Individually track engagement metrics on each platform that your small business is active on. Additionally, don’t forget about what your goals are for each platform. For example, if you are posting on Instagram to increase awareness from users between the ages of 25-34, don’t roll those engagement numbers in with those of your Facebook posts, where you might be trying to reach a different type of audience.
Stay agile. Find which type of posts are more successful and which ones have lower engagement rates.
Email Opens & Clicks
In March consumers saw a spike in emails sent from all kinds of brands making statements about how they were handling concerns about the pandemic. Most people found this to be kind of annoying.
Unsurprisingly, Salesloft reported that sales emails with “COVID-19” or “Coronavirus” in the subject line saw a 40% reduction in reply rates.
With this in mind, you may be thinking that email is a no-go right now. However, just like social media, email has the potential to help you create a much stronger relationship with your customer base (if you do it with the right intentions). Here are my three best recommendations:
Don’t try to incite fear.
Be positive, but...
...don’t be ignorant.
To Track: If you’re still sending marketing emails at this time, it’s important to keep a close eye on the open rates and click-through rates of your emails. If you’re seeing a significant drop in these metrics from before, you might want to think about changing up the content or just taking a break for a few weeks. Otherwise, you may see your unsubscribe rates shoot up, and those are contacts you may not be able to win over again.
As the economy starts to open back up in your area over the next few months and you adjust to your “new normal”, I hope you use these metrics to make re-budgeting less daunting and easier to understand on the marketing front.
If you’re a small business wondering where to go next, I’m happy to provide a free 30-minute consultation to talk about your goals and develop a plan of attack. Fill out the form below to sign up!
Hi! I’m Jennie.
Thank you for visiting my blog! I write about marketing tips for small businesses and how to succeed as a female professional. I write from experience about the things that I love.