Measuring Success

There are many numbers to look at that are indicators of success, but we find that many businesses and other marketers become overly obsessed with the wrong metrics. For example, click-through-rate is an important AdWords metric. Some people obsess about click-through-rate, and are completely focused on trying to improve it. The problem is that a higher click-through-rate is not necessarily a good thing. It depends on who’s clicking, and why. A higher click-through-rate could be a bad thing as much as it could be a good thing.

We start our optimization process by considering the number one metric to be: dollars in the bank.

While considering dollars in the bank to be the number one goal/metric, these two metrics become the next ones to consider:

• Cost per acquisition— (How much does it cost in advertising dollars to gain a customer?)
• Lifetime customer value—(Considering all value, such as resells, cross-sells, and referrals over time, what is the value of gaining a customer?)

If you are doing lead generation, the questions are:

• What’s the lifetime value of a customer?
• How many leads turn into a customer? (Or, what is your close rate?)
• How much does it cost to get a lead?

E-commerce is a bit simpler, because money flows in directly. In this case, the key numbers are:

• Cost per acquisition
• Amount of profit per sale (OR) Lifetime customer value

There is no doubt that many, many other metrics are important to evaluate in the optimization process. We are very focused on basic metrics that show in Google AdWords, such as cost-per-click, click-through-rate, number of impressions, average position, quality score, etc. But we believe it’s crucial to look at engagement metrics coming from Google Analytics as well, such as time on site, number of pages viewed, bounce rate, and more.

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