Building a new lean startup from scratch is no easy task for any founder or CEO. If you are among those founders that have done this, you understand that every process from developing your product to marketing to consumer satisfaction can be tricky. And don't even get us started on the financial aspect of launching, maintaining, and growing a startup business in today's economy.
We know how it is running the lean startup lifestyle, including wearing multiple hats and being worn incredibly thin. One minute you think you have things figured out, and the next a new event flips your business or industry on its head. Marketing is unfortunately one of those areas that tends to fall by the wayside for startups with focuses on operations, sales, and finances.
Running a startup is a warzone with landmines to avoid everywhere and fires to put out constantly, even when it comes to the marketing department. Even marketing best practices can be potential PR crisis in the current climate. And now with rising prices and cut ad spend during a recession, marketing budgets are getting reduced really fast.
So how can startups track important details when they are working on the big picture issues and fixing frequent problems? What are ways that a startup can monitor their marketing campaign progress?
Startup Measurements And Mistakes
Startups function a lot differently from an already established company when it comes to marketing, advertising, and branding. The types of marketing strategies utilized, the way they are conducted, and how the results are measured all differ. This can be difficult to record and analyze properly for lean startups, where founders and employees where multiple hats and everyone is stretched on time while avoiding burnout. Sometimes freelancers are hired from around the world, in person or remotely, for short periods of time.
There is always a lot going on in a startup company so it's easy for founders or employees to drop the ball on some of the basics. So tracking the right analytics and marketing measurements often gets lost in the shuffle for many lean startups.
Tracking Time
If you can't track your lean startup marketing results, how do you know what's working and what needs adjusting?
When setting up your lean startup business, you need to ask yourself some serious questions:
- Do I know and understand what my small business’s Key Performance Indicators (KPIs) are?
- How much understanding do I possess about the startup processes?
- How do I measure a small business's marketing success?
There are different startup metrics to consider, but let's focus on the important ones for measuring success.
Startup Marketing Campaign Metrics And KPIs
To ensure a startup business runs at an optimal level, there are many metrics and KPIs that need to be taken into account. Simply put, your business metrics are, by definition, the various means of measurement used to acquire accurate information about different business processes.
The key metrics for SMB marketing campaigns can be used to:
- Give you performance data like the number of people reached and conversions recorded by such campaigns.
- Analyze the strengths and weaknesses of the SME campaign.
- Know what marketing campaign yields the most results.
With the information obtained, you can easily track the success or failure of all the strategies that the startup uses with KPI or OKR. The right software will help your startup business measure success accurately. Collaborating with a virtual executive assistant is also an option to ensure accurate tracking and actionable insights without overburdening yourself or your existing team members.
Having said that, let us examine some of the key metrics startups can use to track the success of their marketing campaigns.
1. Marketing Return On Investment (ROI)
In measuring the success of your startup's marketing efforts, you have to consider marketing ROI. Marketing ROI refers to the return on investment that is made from any marketing campaign.
When you know the marketing return on investment, it becomes easy for you to determine whether the marketing strategy is a success or not for an SME or LLC startup. It is also a good way of comparing marketing campaigns to determine which was the most effective. One way to test multiple campaigns for success is through A/B testing.
Marketing Return on Investment for startups can take different forms and they include the following options below:
ROI On Social Media Ads
In the digital world that we live and do business in today, social media plays a vital role. It is not just a tool that is used for social interaction, but can also be used to market products and services that are being offered by a startup.
If social media ads are one of the marketing strategies that you employ for your startup, then one key metric of measuring success is ROI on social media ads. To achieve this, you have to carefully analyze how much is spent to run these ads and compare it to the return on sales it brings to the startup.
For example, let's say you spend $200 on social media ads on Facebook. If that ad gets 500 clicks with 10% conversion rate, that means 50 people are buying your product. If that product is sold at $10, total sales recorded will be $500. You ROI on $200 spent for that ad is $500. You are making $2.50 on each $1 you invest into social media ads, which is a 250% profit. A better way to measure ROI is to also look at the payback period. This is particularly useful in subscription based services or products that drive repeat purchases like a social media marketing tool or CRM.
ROI On SEO And Content Marketing
A common marketing strategy among many businesses, both small and large, is SEO and Content Marketing.
SEO is Search Engine Optimization and refers to all the efforts put in place to rank high (the goal is always to be on the first page) on search engines like Google, Bing, Yahoo, Baidu, Yandex, DuckDuckGo, and YouTube. These efforts can include web optimization, content optimization, and keyword placement in articles, among others.
Content marketing, on the other hand, refers to the act of using content to attract leads and sales. This type of content is usually written to inform prospects and existing customers about a particular product or service offered by a startup. The end goal is so that after reading information on the startups website or elsewhere on the web, users can engage with the startup through a call to action provided in the content.
If you use SEO or content marketing for your startup, then you can also measure the return on investment this marketing effort is bringing to the startup.
ROI On Paid SEM
Search Engine Marketing is a combination of search engine optimization and paid search ads. The aim of this marketing campaign is to draw more customers to your startup while still retaining existing ones.
Paid SEM with Google Ads (formerly AdWords) or cheaper Bing Ads makes it possible for people who are searching specific keywords relating to your startup to find you. To drive sales using paid SEM, the focus is on choosing the right keywords to connect your startup to its customers. Utilizing a paid service to find the right keywords can save you time and marketing efforts. While you can do this yourself, it can be quite labor intensive; this job can be outsourced with a dramatic ROI in sales when done properly. You have to be strategic and experienced when bidding on keywords and analyzing ad conversion rate to optimize your PPC ad results while reducing costs.
In measuring the ROI on paid SEM, you have to look at its impact on the ranking of your startup in organic search results. You also have to pay attention to how many new customers are finding and engaging with your startup online. The higher the number of new customers your startup records from organic searches, the more effective paying someone to conduct keyword research and SEM is.
Paid ads help rank you higher quickly and temporarily, but are not organic search results in nature. Once you stop paying for the ads, your ranking will dissolve, although the extra website traffic and potential subscribers you gained from the ads could help your website's long-term organic results indirectly. Organic search results through SEO tend to have long lasting rankings once you get to the first page of Google or other top search engines.
ROI On Traditional Media Ads
Traditional media ads include television, print, radio, billboards, flyers, direct mailers, kiosks, banners, etc, and they can still be used by startups to market their products and services to prospects. However, it is important to mention that tracking the ROI on traditional media ads and its effectiveness can be very difficult.
To determine the success of traditional means of advertising, you can conduct a brand survey asking people how they heard about your business. You can also pay attention to social media mentions immediately when the campaign is launched or promoted on traditional media to know what people are saying about it. Make sure your applications are working to get accurate data.
2. Increase Or Decrease In Sales
Sales metrics are data points for measuring the performance of a startup. These metrics help to track a business' performance based on its goals and identifies the strengths and weaknesses of such performance.
This metric of measuring marketing efforts is vital and must be treated as such. Sales metrics are typically measured over days, weeks, months, and yearly can tell you whether or not customers are interested in your products or services.
Some examples of essential sales metrics include:
Opportunity-To-Win Ratio:
Sometimes referred to as win rate, this ratio is used to measure the success of sales recorded when there is an opportunity. This is particularly useful for B2B startups and businesses.
Average Deal Size:
Average deal size, as it relates to business sales, gives you an idea of how much you are making on an average per deal. It is difficult to increase sales without knowing your average deal size.
Churn Rate Of Customers:
Churn rate refers to how good you are at keeping existing clients. Churn rate is a good sales metric because how well you can retain customers determines how much sale you can make over a specific period. This is particularly useful in cases where repeat purchases are expected such as subscription based businesses. Always remember that it is a lot cheaper to retain existing customers than it is to acquire new ones!
3. Conversion Rate
Conversion rate, as a key metric for measuring the success of your startup's success, refers to the total number of visitors who have carried out certain tasks on your business website and blog. When there is a high conversion rate compared to what was previously recorded, that's an indication of a successful marketing campaign.
In determining conversion rate, several factors must be considered such as the number of visits, interactions per visit, and the value per visit. The best way to boost conversion rates are to add clear calls-to-action and design smart landing pages.
Startup Success Metrics Conclusion
Running a lean startup is no easy feat in this day and age. We deal with it everyday and sometimes during the Lean Startup Life it is hard to see the forest through the trees. Luckily there are numerous metrics used to monitor the success of your startups with new analytics tools. The few startups success measurement metrics outlined above will serve you well to ensure your startup retains or acquires the new potential to reach greater heights.
