Luckily when it comes to digital marketing almost everything can be tracked. With modern marketing platforms such as Google Analytics you can easily analyze your audience’s behavior and get the idea about the effectiveness of your ad by tracking specific metrics.
However, quite often digital marketers forget to track the most valuable marketing KPIs that can actually show if the strategy is working. Without tracking these KPIs you cannot really measure how successful your overall marketing efforts are. By ignoring these KPIs you lose your chance to improve your strategy instead of blindly continue following it.
In this article, we will talk about the most important marketing KPIs every digital marketer should track.
What are the Five “Must-track” Marketing KPIs?
Without a doubt, custom marketing KPIs can significantly vary depending on the business. Of course, it is important to track such metrics as impressions, click-through-rates, conversation rates, and etc. However, by focusing only on these metrics you will miss the chance to get a clear picture of how your overall marketing efforts impact your business.
In order to make better data-driven marketing decisions it is crucial to track KPIs that are related to your business goals. These KPIs can directly affect your marketing objectives.
Let us have a closer look at each of these KPIs.
1. Digital Marketing ROI
One of the most important “must-track” marketing KPIs is Digital Marketing Return on Investment (ROI).
This KPI indicates how successful your marketing efforts are in terms of your business profitability.
Digital Marketing ROI differs from overall ROI by focusing only on marketing numbers. In other words, instead of calculating overall costs and revenue, you concentrate only on those numbers that are connected to marketing: marketing expenditures and gains from investment.
Digital Marketing ROI measures the outcome that is generated on your digital marketing activities, based on the amount of money you have spent on it. As a result, you can have either a positive or negative return on investment. Positive return on investment signifies that your marketing efforts are bringing in more money than you are spending on them.
It is important to calculate not only overall ROI but also ROI from individual marketing channels.
Therefore, by tracking this marketing KPI you can find out which marketing activities are worth investing and which are not. Having this in mind you can enhance your marketing strategy by wisely allocating your marketing budget.
2. Landing page conversion rate
The second marketing KPI that must be tracked regardless of the industry you are working in is the landing page conversion rate.
You cannot doubt an unquestionable value of landing pages, since this is the place where you as a company build trust and convert visitors into leads.
Having landing pages added to your campaigns does not guarantee you an increase in conversions.
Even if your landing page brings a lot of traffic without generating leads it is worthless. That is why it is important to pay attention to this KPI. A low conversion rate signifies that the landing page does not work and you need to take action to improve it.
In order to maximize the performance of your landing page you can try out the following tricks:
- Check if your content is clear, laconic, and persuasive (addresses the main value of your product or service).
- Make sure that your promotional message and the landing page are in tune with each other
- Change your CTA: make the color of the buttons more catchy. Highlight the value in your CTA text.
- Visual graphics: add product images or other eye-catching visuals. Important that the images should have a high quality. Nowadays there are a lot of tools for creating your own visuals. By using high-quality video content you can easily enhance conversion rates by 80%.
- Add testimonials.
Moreover, in order to understand what works best we recommend running the AB test.
3. Cost Per Lead (by channel)
The other “must-track” marketing KPI is Cost Per Lead. This KPI measures the average price of getting a new lead for your company: in other words, how much money you usually spend on getting a new lead.
You can easily measure CPL using this formula:
Cost Per Lead = Spend / Number of leads
Similarly, as with Marketing ROI, you can measure the overall CPL and CPL from individual marketing channels.
If you want to be more precise, calculate individual CPL for each marketing channel. This can help you to evaluate and compare the effectiveness of marketing performance for each channel.
Based on this analysis you can allocate your resources differently in the future. As a result, you can optimize your marketing strategy and increase marketing ROI.
4. Organic Traffic
Having high organic traffic means having a better chance of getting leads that can easily convert. Those users who found your website by using the search engine’s organic results are more likely to become a paying customer, since that means that they already have a specific established need which brings them closer to the decision of buying the product.
Therefore, it is crucial to monitor this marketing KPI and work on its improvement. In the end, every company wants to have most of their traffic come from organic search.
In order to improve your website’s ranking make sure that you have a clear SEO strategy. Do not forget to keep an eye on the latest SEO trends.
5. Customer Lifetime Value
Last but not least, Customer Lifetime Value is considered one of the most important marketing KPI to measure. This metric indicates the expected total revenue (long-term value) from a single customer account.
Monitoring this marketing KPI can help you to retain highly valuable customer segments, reduce churn rate, and expand your customer’s lifetime value.
By ignoring this marketing KPI, the company is risking to spend too many resources (time and money) on acquiring and retaining customers whose lifetime value is not worth the cost. As a result, companies are blindly spending money on something that will not bring profit.
Therefore, it is important to identify the customer segment that can potentially bring more value and focus on this segment.
You can calculate CLV by using this formula:
CLV = (Annual revenue per customer * Customer relationship in years) – Customer acquisition cost
To increase CLV you need to develop and maintain lead nurturing campaigns. This implies providing new services, products, and resources to your existing customers.
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Read more about Marketing ROI optimization and Benefits of Predictive Analytics in Marketing.