Predictive Marketing: Analytics vs. Metrics

When quantifying marketing campaigns the focus must be on two distinct aspects of what we do: metrics and analytics. Often, these terms are used interchangeably, but in truth they are two very different constructs.

What is the difference?

  • Metrics are individual data points related to one specific measurement.
  • Analytics is the act of merging metrics to achieve a more holistic view of the data; with the goal of reaching scalable conclusions.
Predictive Marketing: Analytics vs. Metrics

Google Analytics are the most utilized “analytics” as they examine website and campaign metrics (sessions, page views, bounce rate, traffic sources, exit pages, goals, interactions per visit, social overview and acquisition overview.) Yet, each metric can be further categorized based on qualifiers, including which device types, regions, languages and browsers have been accessed by the end user.

In marketing, there are six metrics that can effectively calculate both performance and ROI, yet how often are they consistently utilized?

1) Customer Acquisition Cost (CAC)

CAC is the average amount of money spent to acquire a new customer. It is calculated based on the total sales and marketing cost divided by the number of new customers within a certain time period. You can create two types of CACs: the 100% online CAC and the combination of online and offline CAC.

2) Marketing Percentage of CAC

What is the percentage of the CAC that pertains to marketing cost? To realize this with the ratio, the total marketing cost is divided by the sales and marketing costs.

3) Ratio of CLV and CAC (CLV: CAC)

Find the ratio by dividing the Customer Lifetime Value (CLV) — or the Lifetime Customer Value (LCV) — by the Customer Acquisition Cost (CAC).

4) Time to Earn Back CAC

It is extremely important to know how long it will take to recoup the money spent to obtain each customer in a strategic effort to set future marketing budgets and pragmatic revenue goals. Figure out the total time (weeks, months, quarters or years) needed to earn back the CAC.

5) Marketing Originated Customer Percentage

This metric measures how much new business comes from marketing leads. After dividing the total number of leads in a month with the total number of new customers, the Marketing Originated Customer Percentage is revealed.

6) Marketing Influenced Customer Percentage

This metric measures the role of comprehensive marketing strategies and the impact each had in the acquisition of new customers. To find this figure, the total number of customers who actually engaged via marketing activities divides the new customer total.

These six marketing metrics provide a foundation for predictive marketing analytics, helping to further model and score categories. By understanding these metrics, the analytics can be properly designed to provide the required data sets.



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