When you understand how marketing channels develop over time, you can see if trends are emerging and how your KPIs based on RetentionX insights are improving the quality of your new customers.
So let's take a look at the development of your marketing channels!
Definitions
Your UTM source tags form the basis for linking the performance of your marketing channels with all purchases of your customers. This will allow you to understand your customers’ marketing journey from start to finish.
But before you dive into data analysis, let's ensure that we are on the same page. You can evaluate the performance development of your channels based on the following metrics:
| Purchases |
Number of orders resulting from the marketing source (based on UTM parameter tracking). |
| Conversions |
Number of conversions tracked by the advertising platform (based on the their attribution model). |
| Attribution Rate |
The share of conversions reported by the advertising platform, that is also tracked via the UTM parameters. |
| New Customer Share |
Share of new customers out of all conversions. |
| LTV |
Average current Lifetime Value of your new customers acquired via the channel, calculated by Sum of Net Revenue - COGS. In addition, we calculate the average LTV of your new customers after their first 30 days, 90 days, 1 year, 2 years, and 5 years. |
| CAC |
Customer Acquisition Costs calculated by |
| Payback Period |
The number of months it takes for LTV to be equal to CAC. |
| Ad Spend | Ad Spend reported by the advertising platform. |
| Impressions |
The number of users who have seen the ad; reported by the advertising platform |
| Clicks |
The number of times the ad is clicked; reported by the advertising platform |
| Click-Through Rate |
The number of clicks you receive on your ad per number of impressions; reported by the advertising platform |
| Conversion Rate |
The number of conversions per number of clicks |
|
AOV |
The Average Order Value of customers acquired via a channel |
| Product Return Rate |
The average percentage of products returned that were from orders placed through this channel |
| Gross Revenue |
Purchases * AOV |
| Net Revenue |
Purchases * Net AOV |
| ROAS |
Return on Ad Spend calculated by LTV / CAC. In addition, we calculate the ROAS of your channels after the first 30 days, 90 days, 1 year, 2 years, and 5 years. |
Attribution Model
Typically, a user does not convert immediately after just one interaction with your campaigns, but has multiple touch points. For example, a prospect is targeted on Instagram, but clicks on the campaign without placing an order right away. Later, he returns to your store through an e-mail campaign and ultimately makes a purchase. Which marketing channel then gets the credit after the customer converts?
That’s where marketing attribution models comes in. Different attribution models factor in the customer journey's various touch points, so you’ll have an objective view of which marketing channels led to the most conversions.
- First Click: Conversions are attributed to the first click/channel that the customer interacted with.
- Last Click: Conversions are attributed to the last click/channel that the customer interacted with.
Use Cases
You are spendinga lot of money on marketing but are you getting your money's worth? With RetentionX you can measure the quality of resulting customers for each source by comparing investments vs. returns. Based on this you can dynamically adjust your budget to the quality of your customers and scale your best channels. You should especially take a look at:
- Customer Lifetime Value
- Return on Ad Spend
- Average Order Value
What You Need
- Most important: UTM parameters
- Marketing Campaign Journey
- Marketing First Click Date
- Marketing Last Click Date
- Customer ID
- Order Number
- Order Date
- VAT
- Discounts
- Shipping Revenue
- Stock Keeping Unit (SKU)
- Items Sold
- Item Price
- Cost of Goods Sold
- Product Returns
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