Whether you’re trying out a new workout plan, planning for future expenses, or limiting your screen time (sorry for increasing it in case you are…), you are tracking some variable to measure how successful your progress has been.
The same should apply for your business.
Ignorance may be bliss in some cases. But not when you’re potentially wasting your money or time. This is why it’s imperative to set up analytics.
Not sure where to start?
We have the answers you’re looking for.
You will want to set up analytics on the following:
We’ll discuss each tool and what they track in more detail below.
Regardless of which tool you use, measuring your key performance indicators (KPIs) will give you insight on the current status of how your channels are performing.
Some important KPIs to measure include:
More on what those are and what they mean in regards to your business later…
Now, let’s dive in.
Tired of not knowing how your website’s performing?
Similar to a lenient diet plan, it could be frustrating wondering what you’re doing wrong and trying out new strategies only to not see a difference.
Google Analytics eliminates that and keeps you in the loop.
Your site’s analytics gives you complete awareness of who your visitors are and which areas could use improvement so you can meet your goals.
Google Analytics tracks heaps of data, but don’t let that data allow you to fall victim to information overload. It’s there to help.
Some metrics Google Analytics tracks include:
Knowing who your visitors are and their behavior makes all the difference in determining how successful your site is.
Which pages are they looking at most? Which are they neglecting or exiting out of? Where are conversions happening?
Google Analytics lays it all out on the table for you.
Want to set up Google Analytics?
Google Tag Manager is not by any means a replacement for Google Analytics, but rather, a tool that will undoubtedly improve your experience. It’s like Google’s Analytics’ trusty sidekick.
Want to check that particular tags fire when you click on a specific button? Or take you to the correct page?
GTM lets you test your tags so you’re sure they work.
All you need to do is add the tracking code to your website and you’re good to go.
Say goodbye to hard coding every single page just for certain tags to fire at a certain time.
Other tags compatible with GTM include Facebook Pixel and Google Ads Remarketing Tag.
Want to set up Google Tag Manager?
You know those late nights when you’re on Amazon just itching to spend money on a bunch of items you absolutely don’t need?
Once you’re in your right mind again, you think, ‘Oh wow, I’m so glad I didn’t buy this ridiculous sit-stand-recline workstation…” (Please look them up if you’ve never heard of them.)
While you may be over your ludicrous Amazon searches, you keep seeing these products pop up as ads no matter which site you’re browsing.
Is your phone stalking your purchase history?
But the site’s tracking pixel is.
A pixel is responsible for tracking traffic, impressions, email interactivity and conversions. (Psst, you will absolutely want this for your business.)
This pixel is like Hansel and Gretel. But instead of dropping bread crumbs, it drops cookies so it’s able to track users’ internet behavior.
How does that benefit you?
If you have a campaign on Facebook, this pixel will measure, optimize and build audiences by reaching those who may be interested. If someone’s activity shows they’re interested in similar products/services to yours, the pixel takes note of that and displays your ad so those particular users discover you.
If you’re looking to have a much more effective campaign that will retarget and nurture leads, Facebook Pixel is the way to go.
Want to set up Facebook Pixel?
When someone looks at your ad, that is a view, or an impression. However many times your ad is found (and loaded) determines how many impressions it’ll get.
This is how you’ll find out how many people your ad is reaching and lets you gauge how well your campaign is working.
Impressions aren’t everything if the conversion rate falls flat, but they do increase brand awareness.
As we mentioned previously, impressions aren’t everything.
But clicks are a step in the right direction.
People see ads all the time. Some websites claim the average American sees 5,000 ads a day. Others claim that’s BS.
Regardless of what that number really is, we know it’s high considering ad blockers exist. And let’s not forget the term ‘banner blindness’ does too.
When your ad gets clicks, it’s clear that users find your ad intriguing and capable of cutting through the noise.
So what’s a good indicator of whether people are interested in your ad?
Your click-through rate.
The higher amount of interest your ad has generated, you guessed it...the higher your click-through rate.
When more visitors are interested, the better your chance of someone taking action and improving your conversion rate.
Cost Per Click (CPC)
Cost per click tells you how much you’re paying for a single click on your PPC ads on Google Ads. The amount varies based on your max bid, quality score and ad rank.
According to WordStream, the average cost per click for search is $2.69 and $0.63 for display across all industries.
Your CPC determines how much your campaign will cost you. The amount spent is an indication of your ROI and the quality of that investment.
Not only that, but you can check to see how your ad is performing on multiple platforms and see which is the most profitable.
Spending too much money on clicks and want to increase your ROI?
A few ways to reduce your CPC include:
Spend wisely and watch your site get quality traffic you can afford.
Every business owner dreams of getting more conversions.
Your conversion rate shows you who, out of all those views and clicks, actually took some sort of action!
This lets you know exactly how your pages are performing. From there, you can see which areas of your site/campaign are doing well and which need improvement.
Conversion rate optimization (CRO) gives you an idea of why conversions may not be happening and what you can do to increase your chances of visitors converting.
But more on that another time.
Cost Per Sale
When running ads, it’s important to have an idea of just how much money you’re spending every time a customer converts and which ad the sale generated from.
Your CPS is a beneficial metric to know since you can see where you can reduce your costs, improve your results and even increase your revenue.
To calculate your CPS, you must take your total advertising cost and divide it by your total number of sales.
Cost Per Acquisition (CPA)
Cost per acquisition refers to how much money you’ll pay for every new customer you get in your campaign.
Your CPA is a good way to measure the revenue impact of your campaign and find out how much it costs for your customer to convert. This will ultimately tell you whether you need to make any changes to your current strategy.
You can see an increase in your ROI within a fairly short amount of time by reducing your CPA.
Ways you can reduce your CPA:
Want to calculate your CPA?
Simply divide your total cost by the amount of new customers you’ve made.
MQL to SQL Ratio
Your marketing qualified leads have their eyes on you, but they’re not ready to take action yet. Sales qualified leads are ready for a direct sales follow up.
You could think of your MQLs as those who are interested in dating you and need to see what more you have to offer before making a commitment. Your SQLs, on the other hand, are ready to put a ring on it.
Now, this isn’t an episode of The Bachelor by any means. But the more SQLs you have, the better.
Your MQL to SQL ratio helps you discover the quality of your leads and how well your sales team is managing their pipeline.
Customer Lifetime Value
Most of us have companies we’re loyal to whether it be Amazon, Nike, or the local plumber.
Because we trust and enjoy their services or products they provide. Maybe we also value what they stand for.
The goal is to have customers keep coming back and providing them with an incentive to do so.
Customer lifetime value, or CLV, refers to the total amount of money someone gives your company since finding your business. This allows you to measure how valuable a customer is.
There are two types of CLV: historic and predictive.
Historic is the accumulated amount a customer has spent since their first purchase. Predictive, on the other hand, is a little bit trickier since it accounts for historic CLV as well as behavioral variables.
A few advantages to having a high CLV include:
As you could imagine, the higher CLV, the better. It displays customer retention and whether someone is likely to recommend your company.
Calculating CLV tells you how much a customer has previously spent at your business and it can also give you an idea of how much you’ll profit off each customer.
Want to find out how valuable your customers are?
First, you must find out what your customer value is. You will get that number by calculating the average purchase value and multiplying it by the average purchase frequency rate. Once you have that total, multiply it by your average customer lifespan.
And voila, you’ve got your CLV.
The Bottom Line
Setting up analytics is a must for every business owner.
Knowing your strengths is important. But so is knowing your weaknesses.
The tools are out there to stay completely in the know when it comes to your business’ performance. Stay up to date with your site and campaign analytics at all times so you can come up with a bulletproof marketing strategy.
Eliminate guessing and find your way to making informed business decisions. Let the data guide you.