Inbound Marketing For Dummies

Chapter 25

Ten Important Inbound Marketing Metrics

One of the goals of inbound marketing is to create avid fans of your company’s brand and products. These loyal repeat customers, known as Lifestylers, live your brand and advocate for your products. Knowing the value of your customers and defining their dollar value over the lifetime of your relationship helps you calculate a return on your marketing investment. So, in this chapter I outline the ten important inbound conversion metrics for you to populate your Customer Conversion Chain, enabling you to reverse-engineer a plan. Calculate the numbers for each metric, beginning with the end in mind (LTV) so you can make more educated decisions when allocating your marketing resources.

Lifetime Value Of Your Customer (LTV)

Your customers are worth more than one purchase. Their value to your company can be defined in influence and in dollars over the course of your business relationship with them. For purposes of calculating ROI, you can simply use the lifetime value of your customer (LTV). Using historical sales data, you can figure it in two different ways. The first one is this:

Average Transaction Purchase Amount ($) × Average Number of Purchases = LTV

For this first formula, let’s use the example of an online education company whose average course fee is $30. If this company analyzes its data to discover that an average student will take ten courses, the lifetime value of its customer is $300. ($30/course × 10 courses = $300) ...