The days of making business decisions based on speculation, theory, and gut instinct are long gone. As the digital revolution forces entrepreneurs and marketers to be even more in touch with their consumers, it has also resulted in the emergence of new tools for measuring the quality of these interactions. Using these tools can provide data that can give information on the efficiency of your marketing campaigns and assist you in identifying growth prospects.
When determining whether or not your marketing efforts are effective, the first step is to define your success criteria. Measuring and optimizing any process is vital, and marketing activities are no exception.
When you define and track key performance indicators (KPI) for your marketing initiatives, you can easily determine what works and what doesn’t. You can then allocate your marketing budget to the most successful initiatives to ensure marketing success.
To continuously improve your marketing approach, you need to review different variables that all contribute to your total return on investment (ROI). The following are some metrics that you should track for your marketing campaigns:
1. Determine Your Traffic Sources
Analyzing the traffic produced by various sources is an excellent way to evaluate your marketing efforts. If you’re into data analysis, then you’ll like this tool called Google Analytics. You can see traffic by source, such as organic, paid, referral, social media, and direct—providing you with a clear image of where prospective customers are coming from.
2. Cost Per Lead (CPL)
Cost per lead (CPL) is the amount of money you pay to produce one new lead for your company. In marketing, it’s used to assess and track the performance of marketing efforts. Obviously, if you’re spending more money on getting new leads than you’re receiving from having that specific lead become a paying client, you’re doing something wrong.
You don’t need a complex cost per lead calculator to do a simple calculation. Simply divide the total amount of money spent on lead production during a certain time period by the total number of leads created during that same period.
3. Customer Acquisition Cost (CAC)
Customer acquisition cost is similar to CPL in that it looks at conversions rather than simple leads. It’s a way of figuring out how much it costs to acquire a new client. If you divide your entire digital marketing spend by the number of clients you get over a certain period, you’ll arrive at your ROI.
4. Return On Advertising Spend (ROAS)
It’s easy and straightforward to figure out how much money your advertising campaigns make. To figure out your return on advertising spend (ROAS), divide the total amount of money you made from your advertising campaign by the total amount you spent on ads.
It’s very important for you to keep track of this digital marketing ROI metric if you’re running any kind of online advertising campaign.
5. Response Time
Even though your sales team is the only one who can change this number, it’s still one of the most important things about conversion rate. If your sales team isn’t able to quickly jump on leads that come from your marketing efforts, it’s important to figure out what’s going on.
Work together to open the floodgates when more leads are needed and close the yoke when the sales team doesn’t follow up quickly enough.
6. Return On Marketing Investment
Keeping this metric in mind helps marketers focus on growing the most profitable activities and cut back on the ones that take up time and money.
Take your total revenue and divide it by your total marketing investment to get your return on marketing investment, which will indicate much money you made.
7. Branded Search Queries
If you look at branded search queries over time, you can see if your brand awareness has gone up. By keeping track of how many people search for your brand name every month, you can figure out how well your digital marketing strategy is working. This means that the more branded searches you get each month, both through organic and paid marketing, the more people are hearing about your business.
This is a very important metric when you spend money on things that are hard to track, including display ads, content marketing, and other top-of-the-funnel efforts.
8. Customer Lifetime Value (CLV)
If you run any kind of business or do any kind of digital marketing, you need to know about customer lifetime value (CLV). So, what does the CLV tell you? It tells you the amount of money you spend on a new customer to get them.
Anyone involved in marketing knows that it costs less to keep an existing customer than to convert a new one. There’s nothing wrong with that, but there are a lot of subtleties to it. What about the customers who cost you more to serve than they make? Which customers or groups should you spend more time and money on?
How you answer those questions is what CLV is all about. So, over the course of their relationship with the company, it shows how much money each customer is worth to the company. It’s a good metric because it shows how important each customer is to the company.
9. Customer Experience And Satisfaction
Customers want 24/7 services across all platforms. They’re not afraid to switch sides and are more outspoken on social media if these preferences and demands aren’t met.
In an era of increased competition and consumer power, enterprises must distinguish themselves through customer experience. Thus, to increase customer satisfaction, retention, average profit margin per customer, and lifecycle value, organizations should continue to prioritize the exceptional customer experience.
Use this data to target the worst customer experiences at each touchpoint. Invest in innovation and marketing campaigns to please the consumer.
10. Sales And Revenue Growth
Sales growth is a metric that shows how well your sales team can make more money over a certain period. It’s a strategic indicator that helps business executives make decisions. Moreover, measuring sales and revenue growth will help you better plan your business strategy.
You should now understand why marketing metrics and KPIs are vital for the success of your enterprise. In particular, these are the benefits of the marketing metrics discussed above:
- You won’t know whether your marketing efforts are beneficial until you monitor campaign outcomes.
- By linking metrics to company goals, you can ensure that you’re prioritizing marketing initiatives accordingly.
- Measuring outcomes can help you avoid wasting time, effort, and resources.
- You or your team can’t disagree with hard data that proves your marketing efforts worked.
It’s obvious that measuring marketing metrics and KPIs is critical. Embracing that notion will allow you to take steps that will help you develop effective strategies in the future.
Oliver Perlman is a digital marketing specialist and writer. He’s been in the industry for more than ten years. He shares his knowledge by writing blogs and guest posts online. During his free time, Oliver enjoys yoga, cooking, and camping.