Key Metrics and Strategies for Digital Marketing Success
1. Identifying Qualified Users for a Company
Indicators of user qualification:
- Behavior: User is looking at pricing plans.
- Nationality (language): User’s language preferences.
2. Understanding DAU, WAU, and MAU
- Daily Active User (DAU): The number of users who interact with your page in one day.
- Weekly Active User (WAU): The number of users who interact with your page in seven days.
- Monthly Active User (MAU): The number of users who interact with your page in thirty days.
3. Churned Users
A churned user is a customer who has stopped subscribing to or canceled a subscription service.
4. Symptoms and Alerts of Churn
- Users attempting to cancel their account or subscription.
- Expired credit cards.
- Users who have not completed or have skipped the onboarding process.
Churned users are users who interacted with your app in the past but haven’t interacted with it within a particular time period. These users could have uninstalled your app or stopped using it without deleting it.
5. Customer Lifetime Value (CLTV)
Customer Lifetime Value (CLV or CLTV) is the average revenue you can generate from customers over the entire lifetime of their account. It represents the projected revenue a customer will generate before churning.
The basic formula for calculating CLV is:
ARPU * Gross Margin * Average duration of customer contracts
A ratio of 3:1 (CLTV to CAC) is generally considered a good benchmark for business prosperity.
6. Customer Acquisition Cost (CAC)
CAC is the cost of attracting a new customer, including advertising, marketing, special offers, etc.
Formula:
(Marketing Expenses + Sales Expenses) / Number of Customers Acquired
7. Google Analytics: Dimensions vs. Metrics
Dimensions are attributes used to describe, segment, organize, and sort data.
Metrics are quantitative measurements of data. Dimensions are the labels used to describe them. Metrics are always expressed numerically.
Source vs. Medium: Source is usually linked to a company’s name, while the medium is the channel within that company (e.g., Source: Google, Medium: CPC or SEO).
8. Bounce Rate
Bounce rate represents the percentage of visitors who enter the site and then leave (“bounce”) rather than continuing to view other pages within the same site. It is calculated by dividing the number of single-page visits by the total number of visits. A bounce rate of 70% or higher is generally considered bad.
9. Cohort Analysis
Cohort Analysis involves grouping users by shared characteristics, typically by acquisition date (the first time a user visits your website). This allows you to compare the behavior and metrics of different cohorts over time, identifying high-performing or low-performing cohorts and the factors driving their performance.
Cohort analysis is crucial for measuring user retention. It helps answer the question: “Are users returning or not?”
Retention
Retention measures how many users return to your product over time. Focusing on retention as a primary growth metric can lead to sustained growth.
Retention Curve
A Retention Curve is a line graph depicting the average percentage of active users for each day within a specified timeframe. It represents the percentage of visitors who leave or bounce back from the website without interacting with any element.
Critical Event
A critical event is a user action within your product that aligns closely with your core value proposition.
Interval
Interval refers to the expected frequency of product usage. Some products are designed for daily use (social networking, media, games), while others are used less frequently (on-demand services, e-commerce).
Types of Traffic
1. Organic Traffic
Organic traffic comes from search engines (Google, Bing, etc.). It’s the result of users clicking on search engine results pages (SERPs). It’s highly valued in marketing due to its exponential results.
2. Direct Traffic
Direct traffic comes from users directly typing your website’s URL into their browser or using bookmarks. It often indicates brand awareness.
3. Social Traffic
Social traffic comes from social networks (Facebook, Twitter, Instagram, etc.) when users click on shared links. Sites like Quora and Reddit can also fall under this category.
4. Referral Traffic
Referral traffic comes from other websites linking to your site. It’s often a result of effective content marketing.
5. Email Traffic
Email traffic comes from your email campaigns. Proper tracking requires integrating your email marketing software with Google Analytics or using UTM parameters with “email” as the medium.
6. Paid Traffic
Paid traffic comes from paid advertisements (Google Ads, Bing Ads, etc.), typically with “ppc” or “cpc” as the medium.
7. Display Traffic
Display traffic also comes from paid advertisements, but the medium parameter is usually “display.” These are often banner ads seen on news sites, blogs, or affiliate sites.
How to Improve Retention
- Improve your product.
- Improve your onboarding.
- Make your product stickier.
- Catch users before they leave.
- Remind users of your value.
- Bring back users after they’ve gone.
- Target a more suitable audience.
What is CRO?
Conversion Rate Optimization (CRO) is the systematic process of increasing the percentage of website visitors who take a desired action, such as filling out a form or becoming customers. It involves understanding user behavior and identifying obstacles to conversion.
What is a Conversion?
A conversion is a visitor completing a site goal.
Macro-conversions (primary goals):
- Purchasing a product
- Requesting a quote
- Subscribing to a service
Micro-conversions (smaller conversions leading to macro-conversions):
- Signing up for email lists
- Creating an account
- Adding a product to the cart
What is a Lead?
A lead is a user interested in your value proposition who is starting to exhibit buying behavior. This interest is expressed by sharing contact information.
Types of Leads
Marketing Qualified Lead (MQL)
An MQL has shown interest based on marketing efforts. They actively engage with your content (e.g., downloading trials, filling out forms, adding items to a wishlist).
Sales Qualified Lead (SQL)
An SQL has expressed enough interest to move into the sales process. Examples include responding to emails, contacting you directly, or revisiting key pages.
Lead Scoring
Lead scoring is a marketing automation technique to organize and prioritize leads by assigning scores based on their actions. Higher scores indicate a greater likelihood of purchase.
Lead Magnets
A lead magnet is an offer (e.g., a free PDF, eBook, video) provided in exchange for contact information. The goal is to maximize the number of targeted leads.
Lead Nurturing
Lead nurturing is building relationships with prospects throughout the customer journey to encourage them to choose your brand when they are ready to buy.
Opposite of Churn?
Retention.
Conversion Attribution
Conversion attribution identifies which channel led a user to perform a desired action (conversion) on a website or app.
Network Effects
Network effects can drive retention rates up over time. Products like Facebook or Slack benefit from network effects, making them harder to churn from.
Churn Rate: Causes of Churn
Churn rate is the percentage of users who stop using an app within a given period.
- Attracting the wrong customers.
- Poor onboarding experience.
Onboarding and Why it Matters
User onboarding is the user’s initial experience with your brand, product, and people. It sets the tone for the relationship, increases customer lifetime value, reduces churn, and turns users into fans.
CAC inside CLV
CAC (Customer Acquisition Cost) is the investment in attracting a new customer.
Communities
Loyalty Objectives
- Retain new customers.
- Reward existing customers.
- Drive lifetime value.
Difficulties of Attribution
Cross-Device
Payback Period
The payback period is the time it takes to earn back the cost of acquiring a new customer. For example, if CAC is $100 and you make $25/month from that customer, the payback period is four months.
Conversion
Conversion marketing aims to increase conversions, turning site visitors into paying customers.
Why Create a Community?
Communities offer scalability (members help each other) and a motivational dynamic (members feel useful and connected).
Reasons to create a community:
- Enhance personal connections.
- Shared hobbies.
- Create a movement.
- Gain connections.
- Business goals (connecting employees, customers).
Common Financial Goals for a Community
- Reduce support costs.
- Increase member success, loyalty, retention, or NPS scores.
- Gather insights from members.
- Attract new customers.
- Improve staff collaboration/productivity.
- Charge membership fees/advertising.