What are marketing performance metrics and why are they important for tech startups?

Marketing and sales are an essential part of any business. In most cases, without them the product or service remains unknown. While large companies with a long-standing reputation might be able afford to slack off a little bit on the marketing (they definitely do not do that though), a small tech startup must do what it can to get in front of as many potential clients as possible.

These days, there are many tech startups. Most of them fail pretty fast. That is just the reality of it. Often, that failure is hard to predict, but there are some methods to see it coming. When investors or managers analyse the chances of a startup “making it big”, there are many metrics they look at to make sure the company has what it takes and the business model is sound. Many of those performance indicators should sound familiar to you: ROI (Return on Investment), PM (Profit Margin), Sales Revenue, etc.

There are, naturally, several metrics for analysing the marketing and sales part of a business. Below we will take a general look at some of the most common ones, so you can use them when analysing your business, competition or an investment you are considering.

For the purpose of this article we will not bore you with any formulas or all that technical stuff. The goal here is to give you a general idea. Enough to understand the reports and know if you need to look into those metrics or not.

MROI

You might have heard of ROI. It is a widely used metric, showing how lucrative a certain investment is. Now, MROI stands for (Marketing Return on Investment). Many companies include this metric in their financial report. It shows how much money the company gets for every dollar they invest in marketing. Of course, the higher the number, the more effective the marketing is. Pretty simple, isn’t it?

Customer Retention Rate and Churn Rate

CRR (Customer Retention Rate), as the name suggests, represents the percentage of customers that the company was able to keep over a certain period of time. Naturally, a high percentage means that many clients stay with the company and that is good. Churn Rate is the opposite, as it shows the percentage of clients that left the company. You might see either one. These two are very important for a growing company.

Now you know your marketing metrics. Of course, there are many more, but these ones are the most widely used (and for a good reason). Monitoring them is important to ensure that the company is doing well and has the potential to grow. And now you can do it too!