- Magnetic Marketing
- 6 metrics to obsess over
6 metrics to obsess over
That will take your CRM program to new heights
Welcome to the 31st issue of Always Be Learning. The newsletter that crosses the i's and dots the t's... or something like that.
If you were forwarded this email, you can subscribe by clicking below:
Friend of the program:
Your next business idea, delivered weekly.
Trends tells you the next big thing – months before everyone else. Their dynamic team of business analysts already outlined 1,000+ vetted business ideas you can start in a weekend, and they send new ideas and market signals straight to your inbox weekly.
I've been a subscriber for over a year, and I never plan on canceling my membership. It's that good.
Today's Marketing Breakdown:
In today's issue I'm going to walk you through the metrics I'm looking at on a daily, weekly, and monthly basis from a CRM perspective.
In each timeframe, I'll cover 2 key metrics. By the end of this issue, you'll walk away 6 key CRM metrics you should be obsessing over for your business.
1. List Growth
The success of your CRM program is highly contingent upon the size of your Email and SMS marketing lists.
This is the first stat I look at every day to spot-check if there are any red flags I need to look into.
Every lead captured goes through your welcome series and converts x% of signups into paying customers. This helps lower your CAC as you are converting leads that may have otherwise bounced from the site.
You want to see steady and predictable list growth when you log in every morning.
2. Total Repeat Sales vs. Forecast
I've worked at startups for my entire career. If there's one thing I've learned, business owners don't like missing forecasts.
Are you going to make massive adjustments to your plan 4 days into the month? No.
But it definitely helps to spot trends earlier than later and get your gears turning about what the team should do if the pace for the month isn't looking good as the days goes by.
Pro tip: it's not uncommon to see brands running "End of Month" sales. Know why they're doing that? To ensure they hit their monthly sales goals :)
(Retention marketers trying to forecast repeat revenue 👇)
1. Email and SMS Revenue Per Send
Rather than focus on total Email and SMS revenue, I like to look at Revenue Per Send.
Total Email and SMS Revenue should grow as the business grows, but Revenue Per Send is a better indication of how your campaigns and automations are improving over time.
You can segment Revenue Per Send out in a bunch of different ways:
By Channel (Email vs. SMS)
By One-Off Campaign
Looking at all of these different views paints a holistic picture of how your marketing campaigns are performing.
2. New vs. Repeat Customers (vs. Cancels)
Depending on the current goals or strategy for the business, these metrics can be pretty different.
I've been at companies where the business was mostly reliant on repeat customers and I've been at other companies where the majority of revenue is coming from new customers.
It's important to track how these percentages change over time to understand how the total business is performing.
I added "Cancels" to the end of this metric for subscription companies (something I watch closely at the Beard Club).
Two things I'm looking for with cancels:
Are we adding more customers than losing each week?
Is the # of cancels as a % of active customers remaining flat or decreasing?
1. LTV Cohort Analysis
This is my favorite dashboard to look at every month. It's a chance to start fresh with a new cohort and check in on the progress of cohorts of first-time customers that came in during recent months.
The chart should look something like this:
I could talk in circles about the importance of this dashboard but that's a newsletter issue for another day :)
To be quick, the main things I'm looking for are:
Are we improving each cohort month after month? If no, what's happening?
What are the characteristics of our top performing cohorts that made them so valuable?
Are we hitting our target LTV goals by Month 3, 6, 9, etc. How long is it taking us to make a profit on a newly acquired customer?
This is a pretty complex topic so here's an article that does a decent job breaking it down in more detail if you're interested 👇
2. Retention Analysis
Similar to the LTV cohort analysis, I look at a similar chart for Customer Retention and Revenue Retention. Instead of $ figures, I'm looking at %s.
Customer Retention - What % of customers that purchased for the first time in January came back to purchase in February? in March? April? etc.
Revenue Retention - What % of new customer revenue from January was retained in February? in March? April? etc.
The further you get from the first purchase month, the lower your retention rates will become over time.
What am I looking for?
Are the customer and revenue retention charts aligned or not? e.g. Higher revenue retention with lower customer retention would indicate you are retaining the most valuable customers, but less of them.
Are we retaining more customers and revenue than previous months? Is it flat? Is it declining? Based on that answer, what do we think caused this change?
Is their any seasonality to our retention? How did the October 2022 cohort compare to October 2021?
This doesn't cover all of the metrics I'm looking at on a routine basis, but it does cover most of the foundational metrics.
The main thing here is that every business is completely different. e.g. Measuring the retention rate of sports gamblers at FanDuel was a different world compared to measuring the retention rate of guys buying beard growth supplements.
Run these numbers for yourself, set your benchmarks, and then try to beat them every day, every week, every month.
There you have it! 1 marketing tip to help grow your DTC business.
Here’s what else I’m checking out in the DTC marketing world:
Hope this has been helpful!
If you enjoyed it, please forward it along to your marketing friends.
See ya next Thursday,
Looking for more great business content? Here are 5 of my favorite beehiiv newsletters that I never miss: 👇