We delve into the seemingly complex world of demand generation metrics and break them down in an easy-to-understand way to help you measure your marketing success.
A demand generation strategy is a chain of marketing efforts that you make to increase the demand for your product and brand.
If done right, your demand generation ideas can rapidly boost your brand’s worth and likewise increase your store’s conversion rates.
The most important part of a demand generation strategy is keeping track of demand generation metrics in order to help you figure out if your marketing efforts are going in the right direction.
Below is a list of the 12 demand generation metrics to track your marketing success.
When you’re calculating your demand generation, two vital components should be carefully considered, i.e., activations & signups.
Activations refer to any campaigns, events, and more that you execute to raise brand awareness.
Meanwhile, signups simply indicate how many people have signed up for your service. Tracking both of these together makes sense to understand how certain activations affect your signups.
For instance, if your custom merch promotion campaign generated a 50% increase in demand and signups over a thirty-day period confirms that your demand generation strategy is a success.
Conversion rate by channel means dividing the number of leads generated by the total number of traffic brought by that specific channel. A channel can include social media platforms, YouTube advertisements, Google Ads, or others.
Here’s an example – if you’re working on a print on demand marketing campaign, and you receive 100 visitors in a month from your Facebook page, and 20 of them buy your products, your Facebook channel conversion rate would be 20%.
By comparing all of your channels and the number of traffic being generated by each channel, you can measure which channel needs improvement and which is already functioning efficiently.
There’s a simple formula to calculate your return on investment. The difference between how much you invested in your business and the amount of profit or loss you generated from it is your return on investment.
Related: How to measure digital marketing ROI
ROI is the most basic demand generation metric, while the others revolve around its purpose. Technically, ROI is used to evaluate how smoothly an investment bore fruit.
In any business, investments are divided into different segments, such as the stock you purchase, the amount spent on marketing, employee salaries, or online store subscription fees.
Each investment and its ROI are calculated separately. You can also draw comparisons and rank each investment for a clear understanding of your demand generation strategy.
Content marketing is an essential part of your marketing plan, and that includes your product descriptions, landing pages, website content, and blog posts. The purpose behind content marketing is to provide valuable and trusted content to your audience and thus also use the power of words to rank higher on search engines.
Like other metrics, content performance is specific and measured separately. You should look at a variety of metrics your content generates: traffic, registrations, and conversions are the main ones.
Moreover, you should check these metrics over time and see how content updates and other changes impact them.
Contribution to total revenue is simple to understand.
The amount of revenue that your demand generation strategy is making compared to other revenue-generating plans, the difference is the information that you need to know to decide if you’re moving in the upward direction.
The calculation of your contribution margin is done by using the following formula:
(revenue – variable costs) / revenue
Ruler makes the process of tying marketing to revenue easy. It tracks every visitor touchpoint across the full customer journey and enriches your lead and opportunity data, allowing you to track where your highest-converting customers came from.
How Ruler attributes revenue to your marketing
Cost per acquisition (CPA) indicates the total expense associated with gaining a new client to do a certain action.
Basically, CPA shows the cost of moving a single buyer through your marketing funnel from first contact to the final conversion.
Take, for instance, that you manage a Facebook ad campaign for your eCommerce site that offers handcrafted goods. Your campaign had a $1,000 total budget. You determined that the campaign had resulted in 50 purchases after it was over. You spend $20 on average to bring in one new consumer.
The cost per lead, or CPL, pricing system for digital marketing requires that the advertiser pay a certain amount for each lead produced. Businesses that provide high-value items or subscription services often use CPL in eCommerce.
CPL is simple to understand yet very effective in demand generation.
Take, for instance, that you require five leads to close a transaction, and your cost for each lead is $200, your cost per sale will be $200 x 5 or $1000.
You would anticipate making one sale if your marketing team produced five leads.
An MQL is someone interested in your brand, and you’re pretty sure that he will make a purchase if your marketing is done right.
To check who’s your MQL, here are a few steps to follow:
For example, if on your blog page, your MQL repeatedly visits “How to Sell on Etsy” blog or otherwise visits a product page quite often, you can tempt them with discounts or other ways to make purchases.
As simple as it sounds, an SQL is someone that your sales team has already successfully received sales from. These are the basic leads, often termed – hot leads.
However, to determine an SQL, you need similar data intelligence. A few determining factors are listed below:
Brand sentiment is the overall feeling that underlies each mention of your company. In consumer remarks, brands may elicit favourable, negative, or neutral feelings. It is basically unspoken feedback from your customers.
Over time, your brand sentiment should increase if you’re successfully distributing branded content for your marketing and advertising purposes.
Customer lifetime value (CLV) is a commercial indicator that assesses the typical customer’s potential earnings over the term of their relationship with a business. Calculations of client lifetime value may be complicated by variations in items, prices, purchase frequency, and volume.
A demand generation strategy can be useless if your target customers are not converting into referrals or sales or coming back as repeat buyers.
Payback period is the total number of years that it is going to take to recover the invested amount in the business. Simply divide the initial cash expenditure of a project by the total amount of net expected revenue that the project produces annually to learn how to calculate payback time over the years.
An ideal payback period for eCommerce businesses is approximately 12 months or less.
All businesses, big or small, new or old, need a demand generation plan to proceed with their marketing and brand establishment.
But, in order to keep a check and balance on their demand generation strategy, they must follow the metrics to track their marketing success and to determine if their marketing strategy is going in the right direction.
The eCommerce world is highly saturated, and it requires systemic intelligence to determine which attempt towards marketing is wrong, which can lead to a loss, which is gaining success, and which needs improvement.
By carefully viewing these statistics and making data-based decisions, you can be among the successful businesses that keep an eye on their future and are thus least likely to face any hurdle on their way.
Filip Nikoloski is a Partnership Specialist at Printify. Printify is a transparent print-on-demand and dropshipping platform designed to help online merchants make more money in a simple and easy way.