A brief overview of some critical metrics that you won’t find in Google Analytics

Restored from the Empower Network archive (2011–2017), lightly edited to meet our current advertising standards. Views are the original author’s.

The advent of the internet has helped businesses immensely. Today more than 2.4 billion people use the internet all over the world. Internet has revolutionized the way people do business. It has broken boundaries.

Internet has helped businesses all over the world widen their reach. It has reduced costs and saved time for businesses. Thanks to the internet a software business located in the UK can sell its product to a customer located in Australia.

Most of the businesses all over the world have significant online presence. They have their websites and blogs. They also use social media websites like Facebook, Twitter, Pinterest, LinkedIn and Google Plus.

In order to make the most of the internet, it is not enough to create websites and blogs; and to open accounts in social media websites. It is important to know how your websites and blogs are performing. You need to use some metrics for this.

Many analytical tools, with their metrics, help you in this. Google Analytics is one such tool. It is immensely popular among marketers all over the world. Since Google Analytics is a visit based analytics tool (and not a customer based tool), it has its limitations.

There are some metrics which you won’t find in Google Analytics, but are essential to understand the health of the business. Here is a brief overview of some of them.

Churn

For any subscription business, retention is critical. Cost of acquiring a new customer is more than cost of retaining an existing customer. Churn is the percentage of your subscriber base you lose in a month. It is one of the important metrics.

The higher your churn rate, the faster and cheaper you have to acquire customers to replace the ones who have left you. Reducing churn lifts the ROI of all your marketing activities. Businesses all over the world are focusing on reducing churn.

ARPU

The Average Revenue Per User (ARPU) measures how much each customer buys from you on a monthly basis on an average. It can be calculated by dividing the total revenue by the number of customers.

This metric helps you to determine your business’ ability to reach revenue targets. It also helps you to understand which revenue or customer acquisition levers you need to work on. It is one among very helpful metrics.

CAC

The customer acquisition cost (CAC) is how much you invest on every customer. This has to be ideally lower than the LTV. The more the difference between LTV and CAC, the better it is for the business.

CAC can be calculated by dividing the total costs by the number of customers. It is related to metrics like CPC, conversion rate, etc. The CAC to LTV ratio will give you an idea of where your business stands.

LTV

The lifetime value (LTV) is the average revenue a customer will generate over time. It is a function of persistence and ARPU. Persistence is the opposite of churn.

LTV = Persistence X ARPU.

The higher the lifetime value, the more the profit.

The above-mentioned metrics help you in analyzing the performance of your business, thereby enabling you to take effective decisions.

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