Marketers have one job: to deliver a return on investment.
You can look at all of the tricks of the trade to generate leads and traffic, but how do you know if your marketing tactics are delivering results?
About 75% of the leading marketers are turning to a broad approach to measure results. They draw data from a wide variety of sources to draw a complete picture of their marketing efforts and their customers.
You want to follow their lead, which is why you need digital marketing KPIs. Keep reading to learn what KPIs are and the ones you need to track in your marketing campaigns.
What Does KPI Stand for in Marketing?
KPIs are key performance indicators. They measure a specific aspect of your marketing efforts. The reason why you need them is that they are quantifiable.
In the past, marketing efforts were hard to track. Think of billboard advertising as an example. You have a billboard on the highway, and your phone rings more often than it did before the billboard went up.
Is that because of the billboard, or is there another cause? There’s no real way to know. The great thing about digital marketing is that everything can be tracked easily.
The question is what do you need to track.
The Top Digital Marketing KPIs
You don’t have to track all of these KPIs to measure your marketing performance. Your KPIs need to be aligned with your business goals. For example, if your business goal is to increase revenue, KPIs related to increased awareness aren’t as relevant as conversions.
The other thing you need to be aware of is the assumption you make based on the numbers. It’s easy to assume that an increase in traffic means that your digital marketing campaign is working.
It could turn out that you’re getting more traffic, but it’s the wrong kind of traffic because they found your site based on an SEO term that’s not relevant to what you do.
As you pick your KPIs and read the results, it’s critical to report the working assumptions behind those numbers. These are the top digital marketing KPIs that you should consider.
1. Percentage of Conversions
The percentage of conversions can be measured as the percentage of people who visit your site and become leads. This is a top of the funnel KPI that measures the quality of the traffic you’re bringing to your site.
This article shows you how you can boost your conversions if you find that percentage is low.
2. Cost Per Conversion
If you’re using paid advertising to generate leads, you want to know what your cost per conversion is. Let’s say that you’re spending about $2,000 a month on a pay-per-click campaign.
That campaign generates about 16 leads a month, you’re spending $125 per lead. This could be good or bad depending on your product or service.
An attorney that charges $2,000 on average per new client would find that the ad spend is worth it. On the other hand, selling a $20 product would require you to reassess your ad spending.
3. Lead Quality Percentage
How many of those leads become customers? That will tell you whether or not your campaign is reaching the right people. It can also be an indicator of your sales team’s inability to close leads.
It’s important to work with your sales team to narrow down the issue and work together to fix it before you spend more money on lead generation.
4. Cost Per Sale/Lifetime Value of a Customer
You need to know how much a customer will spend now and how much they’ll spend over the course of their lives.
You may run a campaign that generates a small amount of revenue, but if you know that your customer has a lifetime value of over $5,000, that can be a huge return on investment.
5. Digital Marketing ROI
How much is digital marketing contributing to your bottom line? This is where you prove your worth as a marketer.
This is a KPI that marketers have trouble with because you have to get the attribution right all the way through the funnel. If you know the percentage of conversions and the leads that become customers, you’re on your way.
At that point, all you have to do is take the revenue generated by digital marketing and divide it by the cost of your digital marketing.
6. Source of Leads
When you know you’re getting high-quality leads, you want to know where they came from. Google Analytics can tell you where your traffic is coming from and how they become leads.
You might find that SEO is delivering the most leads, while another source is delivering the most traffic.
You can set this up in Google Analytics by using Goal Flow or by using UTM tracking in your marketing.
7. Channel-Specific KPIs
In digital marketing, you have a plethora of options to promote your brand. You can measure the effectiveness of each channel by utilizing channel-specific KPIs.
For example, email marketing success can be measured by open rates and click-through rates. If you have an offer in your emails, you can also measure the conversion rate.
In social media, you can measure the engagement of posts, the number of followers, and the amount of traffic each social network generates.
Improve Your Marketing by Measuring Results
The only way to know if your marketing spending is working for you or against you is to measure results. These digital marketing KPIs are the ones you want to track to measure conversions, the quality of those conversions, and results.
Your KPIs have to be aligned with your overall business goals to know if your business is heading in the right direction. You also have to not your assumptions, which will allow you to make the necessary improvements in your campaigns.
At the end of it all, you’ll have stronger campaigns and better results because you’re measuring your success.
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