This will clear your marketing metrics fundamental and will push you to become a digital marketer.

1. Marketing Metrics
10 Most Important
to Track

2. To lend a helping hand, the eLama marketing team has decided
to cover key marketing metrics, their advantages and calculations.
Nowadays, marketing goes hand in hand with analytics. Marketing
has become far more measurable than ever before. So, you can
estimate customer engagement and determine which tactics work
and which don’t through the use of marketing metrics.
It’s not always clear which metrics you should use to measure
the effectiveness of marketing campaigns, and more importantly,
it’s not obvious how to use them to improve your results.

3. ROI (return on investment) reflects the efficiency of your
investments. The easiest way to calculate ROI is to deduct
the marketing costs from the total profit and divide
the balance into them:
ROI (return on investment)
ROI = ((Total profit - Marketing costs) /
/ marketing costs) * 100
CPO (cost per order) can be translated as «cost per order»
and indicates how much the advertiser has paid for selling
one unit of the product. In marketing, this metric
is calculated by the formula:
CPO (cost per order)
CPO = Marketing costs / The number
of orders
Let's start with the basics:

4. CPC (cost per click) is the price you pay for a click, the amount
that an advertiser pays to ad system for click. No matter how
manytimes the ads are viewed, the advertiserwill only pay for
the number oftimes it is clicked. Howto calculate CPC:
CPC (cost perclick)
CPC = Cost to theAdvertiser / Number
of Clicks
CPA(cost per action) — with the help ofthe CPAmetric,
advertisers can calculate how much they have paid for
targeted action on their site. In otherwords,
CPAis the cost per action. Howto calculate CPA:
CPA(Cost perAction)
CPA= Marketing costs /The number
oftargeted actions

5. Customer Lifetime Value (LTV) is one of the most important
marketing metrics. It is the average revenue you get from
a customer during your relationship. By using LTV you can
calculate how much you should spend to acquire new
customers. You are in profit if your LTV is higher than your
CAC (cost to acquire a customer). If it’s not, you are in loss.
Calculate this value mathematically using one of the methods
enumerated below:
Customer Lifetime Value
This method requires more input but results in greater precision
T = average number of orders (sales) per month
AOV = average receipt
AGM = share of profit in revenue ALT = average duration of customer
interaction with the company (in months)
LTV = Total revenue from a customer -
- Customer acquisition and retention cost
LTV = Average purchase * Average number of purchases *
* Average retention time in months or years
LTV = ((T * AOV) * AGM) * ALT
Advanced marketing metrics to strengthen
your marketing campaign:

6. Determine the real return on investment
(ROI) against the cost of acquiring a new
customer
Maximize lifetime customervalue in relation
to the cost of attracting new clients (CAC)
Elucidate yourtarget audience
Strategize customer retention more accurately
Knowledge of LTVis needed to produce
a comprehensive cross-section of clients based
on theirvalue. By means ofthorough comprehension
and proactive use ofthis metric, any company can
build a strategyto work with their specific client
base and focus its attention on the group of clients
with whom it is more profitable to do business
WhyLTV?

7. Customer Acquisition Cost (CAC) is the total sales and
marketing cost of convincing a potential client to buy your
product or service. In other words, it is the average amount
of money that you have spent to acquire a new customer.
To calculate CAC just add all of your marketing and sales
costs for a specific period together and divide them
by the number of customers acquired during that period:
Customer Acquisition Cost (CAC)
As previously stated, your CAC should be lower than your LTV.
Otherwise, you are not in profit.
For instance, if you spent 150000 per month and got 25 new customers,
then your CAC is 6000.
CAC = Marketing and sales costs / The number
of customers acquired during that period

8. LTV to CAC ratio measures the relationship between
the lifetime value of a customer and the cost of acquiring them.
This ratio shows the performance of your investments into
marketing and sales. Tracking this metric over a time period
provides you with an insight into your business strategy.
For example, if you’re spending too much per customer
or if you’re missing opportunities from not spending enough.
LTV:CAC
An ideal LTV:CAC ratio should be 3:1 or higher. The value of a customer
should be three times more than the cost of gaining them. At the same
time, higher is not always better. Keep in mind that if your ratio is too high,
it is likely that you are under-investing in marketing and sales.
For example, if your LTV is $3,000 and your expenses for acquiring
a customer are $1,000, then your LTV:CAC ratio would be 3:1.
Once you have both LTV and CAC calculated,
it’s easy to calculate their ratio. Just divide LTV
by CAC.

9. Payback CAC is a measure that shows how long you take
to earn back the CAC you spent to get a new customer. It tells
you break even on a specific customer, group of customers
or all of your customers.
This metric is relevant for SaaS companies where you have
to spend money upfront to acquire new customers and payback
comes over a period. You become “profitable” and your CAC
is recovered once the sum of the profit from a customer
overcomes the amount of money invested in their acquisition.
Payback CAC
How to calculate Payback CAC:
Take your CAC and divide it by margin-adjusted revenue
per month for the average new customer you just acquired.
Thus, you get the number of months to payback.
CAC = average customer acquisition cost
MRR = average monthly recurring revenue
ACS = average cost of service
Payback CAC = CAC / (MRR - ACS)

10. The Marketing Originated Customer Percentage is a ratio that
shows what percentage of your business is driven by marketing
efforts. This metric is very useful in determining how the efforts
of your marketing team affect your business.
It is calculated by dividing the number of customers through
marketing leads by the total number of customers.
Marketing Originated Customer
Percentage
Marketing Originated Customer % =
= New customers started as a marketing lead /
/ All new customers in a month
It’s typically expressed as a percentage, so multiply your result by 100
This metric is similar to the Marketing Originated Customer
Percentage but it takes into account all of the new customers
that marketing interacted with while they were leads anytime
during the sales process. The number of these leads is obviously
higher than the Marketing Originated percentage.
Marketing Influenced Customer Percentage
Marketing Influenced Customer % = Total new
customers that interacted with marketing /
/ Total new customers

11. Conclusion
what’s working and what’s not
Measuring these metrics on a regular basis is crucial for marketing and
gives you an opportunity to understand .
The metrics provide you with a full insight into the performance of your
investments. Based on the results you get from these metrics you can
analyze and optimize your marketing strategy.