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Apr 11, 2001
How To

Key ROI Metrics B-to-B Marketers Should Use for Online Campaigns

SUMMARY: Return on investment (ROI) is really in the end all that matters. It's not about open rates, or clicks, or visitors.... Get quick, utterly practical guidelines on what you should be measuring in terms of your online marketing here.
Click throughs don't do it anymore. These days ROI rules. According to Christian Sarkar of BMC Software, B-to-B marketers need to measure four different types of metrics to determine an online campaign's success:

Metric #1 Attraction
How much does it cost you to acquire each new visitor? What are visitors worth to you if they don't buy anything? (For example, some companies have started selling banners to 3rd parties on their corporate sites.) How big is the total audience who might visit your site, and how much is it worth to you to grab a certain share of that pie?

Metric #2 Conversion
What's your conversion rate from visitor to opt-in? (An opt-in can be anyone who signs up at your site to receive something from you -- perhaps a newsletter or sales quote.) What's your cost of site maintenance per conversion? (Due to fixed costs, this should go down as you add on opt-ins or buyers.)

Metric #3 Retention
What percent of your opt-ins actually convert to become paying buyers? What's your churn rate -- repeat visitors who are more likely to buy vs. first timers who are less likely to buy immediately. What's your opt-out percentage (i.e. people who say "take me off your list.") How old is your average opt-out? Long-term members or buyers should be less likely to opt-out.

Metric #4 Value Transfer
What's your value per transaction per customer? How many transactions does the average customer make over time? (i.e. lifetime value) How do repeat customers' purchases and cost-per-purchase compare to first-time buyers? What's your customer churn rate -- what percent are very likely to buy from you again?

Don't be alarmed, if you're not already collecting all of these metrics. Few marketers we speak with are all the way there yet. However, these types of metrics should be on your list of goals for the next 12-24 months as you evolve your Web site and marketing database. At the very least, they will help you defend your online marketing budget during the next budget season!
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