How would you know if your marketing efforts are effective or not if you aren’t tracking them? That’s when KPIs, or Key Performance Indicators, come in handy! KPIs allow you to track the indicators that are most important to your company so that you may continue to grow.
A key performance indicator (KPI) is a metric or a quantitative measure that you may use to assess the performance of your company. Digital marketing KPIs are measures that are directly linked to your digital marketing plan. Whether it’s brand awareness, lead generation, sales growth, or SEO. They contain data like your online sales revenue, website traffic, SERP, conversion rates, page conversion, marketing qualified leads (MQL), engagement rate, total revenue. Basically, anything quantifiable and actionable is a part of your digital marketing plans.
Your Key Performance Indicators can originate from social media platforms like Linkedin, Facebook, and Instagram, as well as pay-per-click (PPC) solutions like Google Ads or Bing Ads. Any lead conversion tool, marketing activity, or your sales personnel are all possibilities.
Why Do You Need to Track Your Key Performance Indicators?
To have a clear view of what’s working and what isn’t, you’ll need to track your KPIs. You’ll never know where to invest if you make a profit at the end of the day but have no understanding of where it came from. Or what component of your marketing plan was responsible. For example, a single source of website traffic may be responsible for nearly all of your qualifying leads and sales. While you might be wasting money on marketing channels that aren’t generating any.
Thanks to multiple systems such as Google Analytics and Google Ads, almost anything can now be tracked. It’s simple to observe where your consumers come from, your cost per lead, how much it costs to acquire a customer, which digital marketing strategies worked best, and so on. With this knowledge, you may eliminate the components of your plan that aren’t profitable and concentrate on improving the ones that are.
What KPIs should you track?
It’s not a “one-size-fits-all” decision when it comes to digital marketing KPIs. The greatest KPIs to track for one organisation aren’t always the same for another.
To determine the ideal KPIs for your company, start with your objectives and move backwards. There’s no need to track email marketing KPIs if your lead follow-up is solely done over the phone or in person.
It is of utmost importance that your KPIs meet basic criteria, commonly abbreviated as SMART, of being-
To put it another way, the KPI must deliver a particular result that digital marketers can assess. One that can be identified when achieved. One that is related to your goals and that can be assigned a date or timeframe.
Some of the important Digital Marketing KPIs
The exact combination of Key Performance Indicators you track depends depend on your organisation and the channels you’re targeting with your digital marketing campaigns. Most businesses will also benefit from having some broad marketing measurements and KPIs. Some of general marketing KPIs include –
Rate of Conversion
What percentage of visitors convert to leads and leads to customers is known as the conversion rate. If you want to measure each channel independently, this is a generic marketing KPI that can also apply to any of the other categories. You might also keep track of how many leads or conversions you’ve received.
Cost per lead
Everything your team does to generate new leads is an investment. Advertising, web design, and social media management all consume a significant portion of your company’s money. To understand how much it costs to attract a potential consumer, add the cost per lead KPI to your dashboard.
A lower cost per lead could indicate a better customer experience or greater brand awareness. The contrary result shows that you should review your marketing plan and concentrate on channels that are more profitable.
The cost-per-lead is also an important sales KPI because it lets you measure the performance of your sales force.
Customer Lifetime Value (CLV)
A customer’s lifetime value is the amount of money an average consumer earns over time. Depending on your average retention rate and back-end product or service offerings, this could take days, weeks, months, or years.
Customer Acquisition Cost
The acquisition cost is the amount of money required to acquire a consumer. Advertising, sales calls or visits, and anything else that goes into your prospecting and conversion process are all examples of this.
Return on Investment (ROI)
The ROI is a result of the last two KPIs. When you compare your client acquisition cost to revenue earned, it informs you how much profit you make.
This marketing KPI depicts the number of customers that use your product for an extended period of time and purchase it again. You can see how engaged your consumers are by keeping track of their retention rate.
Here’s a basic formula to remember: ((CE-CN)/CS) x 100 = Retention Rate
CE stands for the total number of customers at the end of a term
CN stands for the number of new customers acquired over a given time period
CS stands for the number of customers at the beginning of a term
What KPIs to not track?
The ease with which digital marketing KPIs such as website traffic, e-commerce analytics, churn, and organic search can be tracked can be a double-edged sword. It makes it simple to measure key metrics, but it also makes it simple to track things that aren’t important, wasting time and attention.
Consider whether the data will provide you with any relevant insights on ways to improve your bottom line when determining which KPIs to track. It’s probably a vanity measure if the metric isn’t something you can act on or influence, hence it’s not worth tracking.
For example, you might be tempted to track vanity metrics like Facebook likes or Twitter followers, but why measure them if you’re not currently running a social media campaign to increase likes or followers? It’s not a useful metric.
Tracking KPIs is extremely important. This is beneficial if you already have particular objectives in mind, but it might be extremely daunting if you don’t know which data sets to examine. Therefore, it is critical is to choose your marketing KPIs properly. You can determine the success of your plans and continue to improve by focusing on only the most important indicators in terms of your business.
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