Evidence That Promotional Marketing or Word-of-Mouth Works Best

The growth of the sharing economy is a global phenomenon that has resulted in a significant impact on business and marketing. As a business owner, marketer, or brand manager, you may be wondering how to measure the success of your marketing efforts. Perhaps you’ve seen the increased interest in “cost-per-acquisition” metrics when it comes to marketing. If so, this blog post is for you. Here, we’ll discuss the various ways that you can use data to measure the success of your marketing efforts and the benefits of each approach.

Cost Per Acquisition

If you’re new to the field of marketing, you may be wondering about the meaning of the term “acquisition” when it comes to marketing. In essence, when you acquire a consumer or a patient for your product or service, you’ve succeeded in marketing it. However, understanding the cost that you incur to acquire a new customer can be difficult. To make it easier, you can segment your acquisition costs by identifying the various channels that you used to reach your target audience. For example, did you pay to advertise on a popular online marketplace or were you referred by a friend who already uses your product? Knowing the differences between these types of acquisition costs is vital in order to have a clear picture of your marketing ROI. Below, we’ll discuss the various ways that you can track the cost of acquiring a consumer or a patient for your product or service.

Direct Traffic

In some scenarios, you may be able to easily track the cost of acquiring a consumer or a patient. You may see increased traffic from organic searches, paid social media ads, or referrals. When you have direct evidence of the traffic that resulted from your marketing efforts, you can easily identify which campaigns were most effective and most cost-efficient. Some marketers track the success of their campaigns using direct traffic as a metric. The advantage of this metric is that it provides you with evidence that your marketing dollars were not wasted. However, this metric does not take into consideration all of the aspects that could affect the eventual purchase of a consumer or a patient. Even though you may have garnered interest from a specific audience, you cannot assume that they will all end up purchasing your product or service. This measurement does not reflect the success of your marketing strategy.

Cost Per Action (CPA)

If you’re looking for a metric that can more accurately measure the success of your marketing efforts, you may want to consider looking into the cost per action (CPA) metric. Just like cost per acquisition, the cost per action metric calculates the total cost that you incur for rendering a specific action (i.e., making a purchase, filling out a form, etc.) on your behalf. Because the CPA metric takes into consideration all of the actions that you as a marketer have prompted, this measurement can provide you with a more accurate picture of the success of your efforts. While CPA may not be a perfect metric, it does provide you with a starting point for measuring the effectiveness of your marketing campaigns. The key is to track this metric over time so that you can see how effective your various campaigns were. In some scenarios, you may find that one type of marketing is more effective than another. For example, paid social media ads may be more successful than organic search engine results, which may in turn be more effective than paid web banners. Knowing what worked and what did not work from a metrics standpoint can only help you improve. Additionally, many businesses that offer CPA metrics also provide you with the opportunity to track the action that you prompted in real time so that you can have a clear picture of the results of your efforts. With increased accuracy and transparency, you can be confident in the value of your marketing budget. Just remember to be consistent with your efforts across all marketing platforms so that you don’t see discrepancies when comparing the data. A large variety of customers can also end up along with a large percentage of repeat business when using CPA metrics due to word-of-mouth marketing. In other words, people may discover your product or service via social media, then go on to recommend it to their friends. When these people eventually purchase your product or service, it’s often because they heard about it through an endorsement from a trusted source. This type of marketing can be extremely effective because it allows you to target the right audience and establish credibility quickly.


When speaking with business owners and marketing executives, it’s not uncommon for them to cite the struggle of getting prospects to take the next step in the buyer’s journey as the most significant challenge in marketing. Once you have their attention (i.e., acquired a consumer or a patient), what next? Essentially, once you have their attention, you can follow up with a series of emails, online chats, and phone calls, which are known as conversion funnels. A conversion is any action that a consumer or a patient takes after being inspired by your message, whether it’s emailing you, opting in for your newsletter, downloading an app, or making a purchase. Conversions are typically measured using a combination of click-throughs (i.e., the number of times that a person clicks on an ad or a piece of content), visits (i.e., the number of times that someone lands on a given website URL), and purchases (i.e., the dollar amount that a person spends within a given time period). When you convert someone from an unattached visitor to a valued customer, you’ve succeeded in marketing. To have accurate and measurable results from your marketing efforts, you must track conversions from the end user’s perspective. In other words, you must look at how many conversions you’ve achieved from an acquisition perspective, but you must also determine how many of those customers would have ended up purchasing your product or service, even if they had not been prompted to by your marketing efforts.


Another way that you can measure the success of your marketing efforts is with website visits. Essentially, when a person visits your site, you’ve successfully marketed to them. In some scenarios, you may see a direct correlation between increased website traffic and increased sales. In other scenarios, you may see that some visitors are more valuable than others. For example, if you have a product review website, you may want to consider using the average time on the site as a metric. In this case, you would want to see longer average time periods for more expensive visitors in order to prove that they are more valuable than average visitors. In some scenarios, you might see that specific pages within your site get a disproportionately high number of visitors compared to other areas of the site. In these cases, you can assume that specific pages contain content that is highly valuable to your target audience and that they are therefore referring friends and family to the website to discover this content. In short, every time that a consumer or a patient comes back to your site, you’ve succeeded in marketing. Visits are typically reported in terms of pageviews (i.e., the total number of pages that someone viewed within a given time period) and traffic sources (i.e., the methods that someone used to arrive at your site, such as social media, direct traffic, or search engine results). When you track these metrics over time and compare them to previous years, you can easily see the impact of your marketing efforts. As with most metrics, consistency is the key when it comes to website traffic.

Cost Per Click (CPC)

Depending on your budget and the type of content that you create, you may want to consider looking into the cost per click (CPC) metric as well. With the proliferation of online advertising and content sources, you may see that ads display on various sites, such as social media platforms and online forums. When an ad is clicked on, you may be required to pay a certain amount of money to the owner of the platform. CPC is generally calculated as the total cost of clicks (i.e., the cost of acquiring a consumer or a patient) divided by the number of times that your ad was clicked on. The higher the cost per click, the more valuable your audience is. In some scenarios, you may see that certain types of content, such as landing pages or blog posts, get a disproportionately high number of clicks for a given amount of money spent. Just remember that creating content to attract visitors to your site and drive them to take a particular action, such as purchasing a product, can also be considered as an effective form of marketing. In most cases, however, tracking CPC for individual pieces of content is not possible, so you cannot easily compare the cost-effectiveness of various content offerings. Instead, you must look at the overall performance of your content strategy.