Learn about the 15 most critical digital marketing ROI Metrics KPIs to know and track.
Digital marketing and the performance and ROI measures that go with it are changing at a breakneck pace.
The digital transition has progressed years ahead of schedule in recent years (thanks in large part to COVID).
Any marketer who has played in Google Analytics can attest to the fact that the sheer amount of data access can be overwhelming.
It’s critical that you’ve established the essential metrics you want to track in order to cut through the noise and effectively analyze the ROI of your digital marketing efforts.
What are the Key Digital Marketing ROI Metrics which are to be followed?
This article will provide you with 15 key Digital Marketing ROI Metrics KPIs to help you calculate the return on your digital marketing investment. It shows you if your efforts were successful and where you might need to make changes. Which Metrics Helps in the Evaluation of Digital Marketing ROI?
- Cost per lead (CPL).
- Lead close rate.
- Cost per acquisition (CPA).
- Average order value (AOV).
- Conversion rates by channel.
- Conversion rates by device.
- Exit rate.
- Click-through rates on blogs.
- Customer lifetime value (CLV).
- Net Promoter Score (NPS).
- Time spent on a project/campaign vs. the amount of money earned.
- Traffic to lead ratio.
- Return on Ad Spend (ROAS).
- Total revenue.
- Customer retention rate.
1. Cost Per Lead
If you’re collecting leads on your website, you’ll need to know how much each lead costs.
If the cost of each lead exceeds the revenue generated by closing leads, you have a negative return on investment.
Knowing your cost per lead allows you to assess the effectiveness of your marketing activities and provides you with the information you need to make future strategic and financial decisions.
2. Lead Close Rate
How do you keep track of how many leads are shuttered?
This happens much too often offline, which means that it isn’t being linked into analytics or the data you’re collecting online.
That’s OK, but you should keep track of your lead closure rate so you can compare it to the number of leads created.
This will ensure that your digital marketing efforts are generating profitable leads.
This data can also be used as a check against fresh digital marketing campaigns.
If you have a sudden influx of new leads but they are closing at a lesser rate, you may need to modify your targeting efforts.
Close rates provide information on how sales teams and representatives convert leads into sales.
3. Cost Per Acquisition (CPA)
You should now be able to calculate your cost per acquisition using the information provided above.
Simply divide your marketing costs by the number of sales generated to arrive at this figure.
You now know how much it costs to make a sale, which can help you better understand your return on investment.
Many digital marketing leaders use Cost per Acquisition (CPA) models, in which they only pay for leads or sales that meet a certain threshold or target.
This aids in the pushing and driving of goals toward conversions or pre-determined outcomes.
4. Average Order Value (AOV)
While you want to see a rise in the number of orders you receive, paying attention to the average ticket value might pay off handsomely.
AOV is a crucial indicator for marketers to keep track of earnings, manage revenue growth, and report a profit.
A small increase in average order value can result in thousands of dollars in extra revenue, and it’s frequently as simple as improving the user experience and offering up-sell possibilities.
5. Conversion Rates By Channel
Overall performance and income are now dependent on integrated digital marketing strategies.
CMOs are under increasing pressure to determine which channels are doing well and which are the most cost-effective.
We all want to know where our traffic is coming from as marketers.
This information tells us where the majority of our consumers are and/or where our marketing efforts are generating the most buzz, whether it’s organic, paid social media, or other channels.
But it isn’t the end of the narrative.
Conversion rates can be a more accurate predictor of success and can reveal where the best chances are.
Assume that organic marketing accounts for 75% of your traffic and PPC account for 25%. However, your PPC conversion rates are twice as high as organic.
As a result, increase your PPC spending. You’ve simply quadrupled your ROI by increasing PPC traffic to match organic traffic.
Attribution reporting also aids in the understanding of how channels interact and which channels have the ability to influence others in terms of conversion lift.
6. Conversion Rates By Device
You should check conversion rates by the device in the same way that you check conversion rates by channel.
If one device is performing poorly in terms of conversions, it may be time to reinvest in that device, especially if traffic to that device is increasing.
Mobile is a fantastic example of how device transitions occur, and conversion rates will differ based on the device.
This is especially true for eCommerce and retail marketers, as more and more people are making purchases on their mobile and tablet devices.
7. Exit Rate
How many people leave your site after visiting a given page?
The number of exits from each of your landing pages should be listed in your website statistics.
It may also display a percentage based on the number of exits/page views received by the landing page.
To evaluate which landing pages require conversion rate optimization and extra improvements for stickiness, use the highest number of exits or highest exit rate percentage.
8. Click-through rates on blogs
Blogs are a terrific way to promote your brand and thought leadership while also driving traffic to your website, but what do you do with them?
While blogs are known for having high bounce and departure rates, that doesn’t mean you have to accept such insignificant figures.
Instead, utilize them to define objectives for moving visitors from your blog to your primary website.
With absolutely no additional marketing costs, a minor increase in blog click-throughs can yield valuable new revenue.
9. Customer Lifetime Value (CLV)
You can’t properly comprehend the return on investment of your marketing efforts until you know how much the average consumer will spend over the course of their lifetime.
If the initial investment yields a substantial long-term profit, you can write off the first sale as a marketing expense, knowing that profits will follow.
10. Net Promoter Score (NPS)
The Net Promoter Score (NPS) is a measure that asks customers if they would recommend a product or service to others.
The scores are given, which are based on a scale of 1 to 10, are a good predictor of client loyalty and satisfaction.
NPS = Net Promoter Score vs. Net Detractor Score
You can measure and enhance customer service techniques and tactics by tracking promoters vs. detractors.
11. Time spent on a project/campaign vs. the amount of money earned
Do you know how much time each member of your team put into a specific project or campaign?
If you want to get the most out of each employee’s skills, make sure they’re working on initiatives that are worthwhile to them.
You can deploy the right personnel to the correct projects after you know the worth of your projects.
12. Traffic To Lead Ratio
A rise in website traffic is a sign that your digital marketing efforts are paying off.
Do the outcomes, however, have an impact on your company’s bottom line?
The traffic to lead ratio is another technique to assess the worth of your marketing activities. This KPI simply counts the number of visitors who become leads.
13. Return on Ad Spend (ROAS)
Return on Ad Spend (ROAS) is a metric that may be used to determine how well your advertising and paid initiatives are performing.
Digital marketers may see how much they spent and how much they got in return.
When analyzing performance, comparing channel spending, and forecasting for the future, this is especially crucial.
The majority of marketers follow the concept that your investment should provide a 3X return.
14. Total Revenue
As marketers, we are continually confronted with sales performance comparisons.
When sales go well, sales take center stage, with marketing taking a back seat.
When sales aren’t going well, marketing receives a lot more attention.
Measure and attribute all you do to avoid these conflicts.
This could be a whole campaign, a marketing touch or assistance, or a piece of content.
Make sure your marketing and sales teams are on the same page when it comes to collecting and reporting revenue.
Establish rules and accountability pathways for leads, opportunities, and any other marketing activity that affects or influences sales revenue.
15. Customer Retention Rate
Do you know how to calculate how many clients your company has kept?
Use the formula below to calculate your client retention rate over a particular time period.
((E – N) / S) x 100 = Customer Retention Rate
You’ll use the number of customers you had at the end of the period (E), the number of customers you gained throughout the period (N), and the number of customers you had at the beginning of the period to calculate the number of customers you had at the end of the period (S).
As the popularity of digital marketing grows, so does the demand to show results. So, make use of the Digital Marketing ROI Metrics described earlier in this post and let the facts tell your ROI narrative.
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