Effective Marketing Audit: Vital Indicators for a Strategic Advantage
January 23, 2024
A marketing audit comprehensively analyzes a company's marketing efforts, including strategies, goals, and performance metrics. By assessing the effectiveness of these elements, businesses can identify areas for improvement and make data-driven decisions to drive growth.
The common KPIs are only sometimes the most effective indicators of success. When devising a marketing strategy, it is crucial to consider multiple metrics to ascertain which campaigns and tactics have the most significant effect on achieving desired sales and marketing outcomes. With the correct metrics, businesses can implement plans based on accurate and complete data.
Selecting applicable marketing KPIs, however, can be daunting. Fortunately, it is possible to discern which ones suit a particular venture best.
This article will discuss the top metrics to monitor when conducting a marketing audit to help businesses evaluate and optimize their marketing efforts for their target audience.
Marketing Revenue Attribution
Marketing Revenue Attribution is ascribing recognition to distinct marketing avenues and campaigns for their financial benefit. This is significant because it enables businesses to comprehend which promotional tactics produce the most income and where they should spend their capital for optimum ROI.There are various techniques for marketing revenue attribution: Last Touch Attribution, First Touch Attribution, Linear Attribution, Time Decay Attribution, and Data-driven Attribution.
Through Last Touch Attribution, credit for a sale is attributed to the most recent marketing encounter before becoming a brand's customer. On the other hand, First Touch Attribution awards praise for a sale to the initial marketing contact before a customer acquires. Additionally, with Linear Attribution, each advertising event is given the same degree of accolade. In Time Decay Attribution, more tribute is provided to touchpoints closest to the purchase.With Data-driven Attribution, machine learning algorithms analyze all customer interactions and offer acknowledgment based on how much each touchpoint contributed towards the conversion.It is crucial to remember that every individual attribution technique is not infallible, and the optimal approach for a firm may depend on the industry, customer journey, and data accessibility. It is also important to observe both the top-of-the-funnel metric and the bottom-layer metric (profits) to gain an all-encompassing perspective of the campaign outcome.
Customer Acquisition Cost
Customer acquisition cost (CAC) is a crucial metric to monitor in a marketing audit. It is the total cost of acquiring a new customer, including all marketing and sales expenses. This metric is important because it allows businesses to understand the cost of acquiring new customers and compare it to the revenue generated from those customers.To calculate CAC, businesses can add up all of their marketing and sales expenses for a specific period of time and then divide that number by the number of new customers acquired during that period.
For example, if a business spent $50,000 on marketing and sales expenses and acquired 100 new customers, its CAC would be $500. This means it costs the business $500 to acquire each new customer.
Monitoring CAC is critical because it allows businesses to understand the cost-effectiveness of their marketing and sales efforts. By comparing CAC to a customer's lifetime value (LTV), businesses can determine if they are spending too much to acquire customers or have room to increase their marketing budget. Additionally, CAC can be used to compare different marketing channels and campaigns to determine the most effective at driving new customer acquisition.
It's important to note that CAC can vary depending on the industry and business model, and it's essential to track this metric over time to see any trends or changes. Additionally, businesses should monitor the customer lifetime value (CLV) and ROI of different campaigns and channels to understand how they impact the business's growth over time.