5 Digital Marketing KPIs You Should Be Tracking
Lets learn 5 Digital Marketing KPIs You Should Be Tracking. One of the primary reasons that digital marketing is so amazing, is the ability to track everything that’s going on. Clicks, likes, impressions, conversions, attribution, open rates, behavior on website, and so on these are called Digital Marketing KPIs.
How do we make sense of all of this data? How do we make sure that we’re staying on track with meaningful goals?
Key performance indicators (KPIs) in this article, we talk specifically about Digital Marketing KPIs.
A Digital Marketing KPI is a measurable value that indicates how effectively a company is reaching key business objectives, or more specific to digital marketing, how well the digital campaigns are performing.
There are many important digital marketing KPIs – this article lists 37 for example. Certainly, you’ll want to be sure to track the KPIs that are most appropriate for your particular situation and goals. However, the following KPIs are fundamental, and important in almost any scenario.
Digital Marketing KPI: Cost Per Lead
Simply acquiring as many leads as possible isn’t necessarily optimal. You’ll want to track how much it costs to gain each lead – the lower the better.
This calculation is as simple as: (cost of campaign / total # of leads).
Do this for each source of leads (display advertising, social media, blog, email campaigns, etc.) By tracking this metric, you’ll be able to understand which channels are most cost effective.
Digital Marketing KPI: Revenue Per Lead
In addition to Cost Per Lead, you’ll want to get a rough measure of the sales value of each lead.
Calculate this with: (total attributable revenue / total # of leads)
With this Digital Marketing KPI, you’ll be able to understand which of your channels are most profitable, so you can allocate your budget accordingly.
Digital Marketing KPI: Website Conversion Rate
The website is at the center of almost any digital strategy. However you are driving traffic, whether it is social media, email marketing, paid advertising – your website needs to be performing and converting that traffic.
Calculate your conversion rate with: (conversions / total website visitors).
Whatever your conversions are (email sign ups, form submissions, purchases, etc), you’ll want to track them to make sure you’re getting the most out of your traffic.
Digital Marketing KPI: Customer Lifetime Value
Customer lifetime value is one of the most important KPIs that you can track. It is the metric which tells you how much total revenue you can expect from a single customer over their “lifetime” of doing business with you.
Here’s a basic calculation for CLV: (average sale per customer) x (average number of times a customer buys per year) x (average retention time in years for a customer).
We know that it is much more cost effective to retain customers than it is to gain new ones, and so it is a good idea to nurture the ones you already have. By tracking CLV, you can better understand your customer retainment.
Digital Marketing KPI: Return on Investment
This is perhaps the most important Digital Marketing KPI for any digital marketer. It answers the bigger picture question of “is any of this working?” and if so, “how effective is it?” It justifies your efforts.
Calculate this with: (total revenue attributed to digital marketing – total cost of digital marketing) / (total cost of digital marketing)
In order to calculate this accurately, make sure to stay on top of revenue attribution, so that you can properly trace sales to their corresponding digital campaigns.
By properly tracking these, and other Digital Marketing KPIs, we can be certain that we are staying on track, make informed and confident decisions, and further optimize our digital strategies.