Measuring the impact of product marketing is an ongoing process for many organizations. Some product marketers have found it hard to quantify their efforts and tie it to business impact. The truth is, product marketing has a significant impact on business, for both B2B and B2C companies. In fact, product marketing has an impact on the ultimate KPI - revenue.
Previously, we’ve asked B2B product marketing leaders to weigh in on the most important metrics to track. Now, we’ve asked B2C marketing leaders which product marketing metrics are critical to their strategy. Let’s take a look at nine KPIs, covering overall business impact, customer acquisition metrics, and qualitative metrics, from B2C marketing leaders.
Key Business Metrics
One of the toughest metrics to measure, but one of the most important metrics, is revenue. Tying your product marketing efforts to revenue is incredibly important. There are a few ways you can go about tying product marketing to revenue, and you can also measure that impact year over year by setting a growth goal for your team.
“At the end of the day, product marketing is in charge of making a product commercially successful. It's a great idea to track other metrics like close rate, cost per acquisition, and churn rate, but revenue should be your ultimate metric for gauging success. Not only do we track our revenue hourly against the previous year and our goal of 15% growth year-over-year, we meticulously document it by site and medium. This enables us to quickly identify the problem when sales are down and react accordingly.”
Sales Conversion Rate
It’s important to measure traffic and CPA, but it’s also important to measure the conversion rate from visit to customer. This will tie into CPA, CAC (customer acquisition cost), and overall revenue.
“Yes, the traffic to your site might increase week over week or month over month, and your lead generation might be up 50% from last year. However, if the sales conversion generated from all these marketing successes aren’t so great, then we have a problem. It’s very important to measure our overall sales conversion rate right from how a prospect first become aware of your business through to the actual purchase. Measure each campaign’s contribution to actual revenue."
When it comes to product launches, there are many KPIs you can be tracking. Depending on the scope of your launch, whether it be a feature launch or a complete product launch, you can look at these two metrics - feature impact on conversion rate, and product impact on customer value. These metrics will help you understand how new features impact conversion and how new product releases impact the overall value your customers are receiving from your offerings.
Feature Impact on Conversion Rate
“The primary goal for many new features launched on an ecommerce website is to increase the conversion rate. At minimum, a feature should not decrease the website's conversion rate. The exact metric could be specific to the part of the customer journey where the feature lives (e.g. increase in new registrations), or the website's overall conversion rate. We typically run an AB test to measure the feature's impact on conversion rate, which isolates the impact of the feature, rather than looking at overall conversion rates or a before-and-after analysis.”
Product Impact on Customer Lifetime Value
“If we are launching an entirely new product, then it's very important for us to understand the product's impact on customer lifetime value. In other words, we want to understand if the new product has a positive impact on the overall value customers receive from our portfolio of products and services. It takes longer to measure changes in lifetime value, and the analysis is more complex, but it's an ideal north star metric. Typically, we'll use a 10% hold-out group for this analysis.”
Customer Acquisition & Retention
Cost Per Acquisition (CPA)
As you invest more in your marketing efforts, you want to measure your CPA, so that you can learn where to pivot in your paid strategy.
“The most important product marketing metric for us is the CPA or cost per acquisition. It tells us how effective our marketing efforts are compared to the number of new customers we get. In other words, if our cost per acquisition is too high, it means that our current marketing efforts are too expensive for the customers that we can get. Furthermore, that means that we need to focus on channels that are less expensive and have a better ROI. If you have an excellent product and a great lifetime value, it won’t matter much if your initial cost to acquire your customers is too high."
Customers often take a non-linear path to conversion, and can interact with many of your campaigns, products, and content. Attribution modeling helps you get visibility into how each of those steps in their lifecycle are impacting your end goal.
"It's important to know where your customer acquisitions are coming from. Usually you are using more than one marketing channel to acquire customers. Knowing and tracking which channel your conversion came from is called attribution modeling. For example, to market my app, I might have digital ads, billboards, a snazzy storefront, a website, social media accounts, and a great app store profile. Which of these is the most effective at getting me new customers? This is tricky because you often have to pull data together from various sources and reconcile differences in numbers. However, with a strong attribution system in place you will know where to allocate your time and other resources to more effectively build and market your brand."
Of course, you want customers to buy your product or service. But you also want to encourage a long-term relationship rather than a one-time purchase. If you offer subscriptions, measuring the lifecycle of your subscriptions can give you insight into the value, customer satisfaction, and churn rates.
“Subscription sign-ups is the most important thing for B2C companies conducting business online, because it represents recurring revenue. Anyone can buy a product once to try it, but signing up for a subscription is a measure of loyalty to the company, and carries a much higher customer lifetime value. It's for these same reasons that angel investors and VCs put so much weight on subscription metrics.”
Time on Page
Knowing where customers come from and if they purchase your product or service is highly important. But, it’s also important to measure engagement through metrics like time on page. If you notice a drop on certain pages, maybe it’s time to tweak your messaging.
"Time on page is extremely important. It's one thing if a click-bait ad pushed a bored Internet user into visiting your website. It's another thing entirely if an interested, potential customer is engaged while scrolling through your webpages. If you can follow their journey through a number of pages, and exit page, all the better! Time on page will tell you if you have a potential customer to re-target, or a bored phone zombie you should exclude from your next ad campaign."
Voice of the Customer
No one knows the impact of your product better than your own customer. Your customers can act as an extension of your product marketing team. You should use their voice and sentiment as a way to measure your product marketing success.
“In any marketing you're only guessing until you talk to your customer and know what they want. Some important questions to ask your customer are things like, How likely are you to recommend this product to a friend? or What do you like most about the product? or What do you like least about the product? Getting input from your customer gives you direction. You can make this into a metric like the number of customers we talked to about this decision.”
Measuring the impact of your product marketing efforts can help you shape future projects, launches, and share results with your key stakeholders. When measuring your product marketing activities, be sure to cover a wide range of metrics from customer feedback to sales numbers to website activity. The more you measure, the more insight you have into the impact of your business.
Topics: Product Marketing