Any digital marketing campaign which is set up to promote your new home building company needs to be measured in several ways to establish its viability and your return on investment. Many business owners believe that all they have to do to assess their marketing is check how much revenue is being created but the digital marketing experts will tell you that does not paint the full picture with regards to a campaign’s success.
There are multiple metrics and measures which can give you an indication of how much your digital marketing efforts are succeeding and building a complete picture from each of these metrics, is how you will be can arrive at a definitive answer. Here, we are going to cover 5 of these metrics, and they are the ones which every business owner, including those who own new home building companies should regard as the most indicative of their digital marketing’s performance.
Metric #1: Cost Per Prospect/Lead
Cost per prospect or cost per lead is how to calculate the cost of bringing each individual into your sales funnel. Each business may have a different definition of what they would classify as a lead, but for most, it will be someone who has effectively raised their hand and asked for more information about a product or service. Take the total marketing spend and divide by the number of individual prospects. $5,000 spent to acquire 200 prospects is a cost per lead of $25.
Metric #2: Conversion Rate
This measures the number of people who are exposed to an advert or any form of sales or marketing message who actually take the action that was wanted by the business. It can obviously be used to measure sales conversions, but it is also useful for measuring the conversions for actions such as requesting a quotation or downloading a brochure. An example is 2,000 people seeing a marketing message with 200 of them clicking through to give a conversion rate of 10%.
Metric #3: Cost Per Customer/Client
This is a way in which your business can determine how much it is spending in advertising and marketing to acquire a customer who goes ahead and purchases the services or products that you are offering. This does not measure how much each customer spends within the period being assessed, but rather how many of them purchased and how much the company spent per customer. An example is 10 customers from a campaign costing $8,000 is a cost per customer of $800.
Metric #4: Revenue Per Customer
This is the reverse of the previous metric as, instead of calculating how much each customer is costing the business to acquire, we now have a measure of how much they are spending on average. We obviously want this figure to be much higher than the cost per customer. Taking the same 10 customers, if we have revenue totalling $35,000, then the revenue per customer is $3,500.
Metric #5: Lifetime Value Of A Customer
This applies when you have an opportunity for a customer or client to use your services purchase your products on more than one occasion. In that case, they will be spending money on multiple transactions and so we want to measure how much that is likely to total over the time they remain a customer. This is simple addition for each amount a customer spends, but you can also average it across your entire customer base, which can be useful for long-term financial planning.