Rosy Strategies

Digital Marketing ROI: 11 Metrics You Must Understand

digital marketing 101

Any novice who has ever dipped their toe into Google Ana­lyt­ics can attest that the sheer vol­ume of data avail­able could eas­i­ly crush even the might­i­est Avenger. Fight­ing Thanos. On Ego. With all his Avenger buddies.

Let’s put it this way; you need to be a Guardian of the Galaxy to man­age the her­culean task of sift­ing through all that data.

But before sig­nal­ing The Mar­vel Bunch to help you mea­sure the ROI of your dig­i­tal mar­ket­ing efforts, you need to get some basic met­rics. Because, let’s face it, with­out the right equip­ment, even a God of Thun­der is pret­ty helpless.

1. Cost per Lead

If your web­site is col­lect­ing leads for your sales team to “close,” you need to know how much you’re pay­ing for each lead.

If the cost of each lead is more than what you pro­duce by clos­ing leads, that is indica­tive of a back­ward return on investment.

2. Lead Close Rate

How do you track your lead clos­es? I’m will­ing to bet you’re doing this offline, which means that data isn’t being inte­grat­ed into ana­lyt­ics or the online data you’re gathering.

That’s fine, but you need to make sure you keep an eye on your lead close rate so you can check that against the leads being gen­er­at­ed. This will help you ensure your dig­i­tal mar­ket­ing efforts are deliv­er­ing leads profitably.

This infor­ma­tion is also help­ful to use as a con­trol against new dig­i­tal mar­ket­ing efforts. If you sud­den­ly get an influx of new leads but you find they close at a low­er rate, then you may need to adjust your tar­get­ing efforts.

3. Cost per Acquisition

Using the data above, you should now be able to fig­ure out your cost per acquisition.

This can be fig­ured sim­ply by divid­ing your mar­ket­ing costs by the num­ber of sales generated.

You now know what it costs to get a sale, which will help you get a firmer grasp on your ROI.

4. Average Order Value

While you want to see the num­ber of your orders increase, pay­ing atten­tion to the val­ue of the aver­age tick­et can reap sig­nif­i­cant rewards.

A small increase in aver­age order val­ue can bring in thou­sands of dol­lars of new rev­enue, and can often be as sim­ple as improv­ing user expe­ri­ence and pro­vid­ing upsell opportunities.

5. Conversion Rates by Channel

We like to know where our traf­fic is com­ing from. Whether it’s organ­ic, paid, social media, or oth­er avenues, this infor­ma­tion tells us where the bulk of our cus­tomers are and/or where the mar­ket­ing efforts are pro­duc­ing the most buzz.

But that’s not the whole sto­ry. Con­ver­sion rates can be a bet­ter indi­ca­tor of suc­cess and let you know where the best oppor­tu­ni­ties lie.

Let’s say 75 per­cent of your traf­fic comes from organ­ic mar­ket­ing and 25 per­cent from PPC. But lo and behold, your PPC con­ver­sion rates are dou­ble that of organic.

What you learn from this is sim­ple: Invest more in PPC. If you can increase PPC traf­fic to match organ­ic, you’ve just dou­bled your ROI.

6. Conversion Rates by Device

Just like check­ing con­ver­sion rates by chan­nel, you want to do the same by device.
If one device has lack­lus­ter con­ver­sion per­for­mance, it may be time for you to rein­vest in that area, espe­cial­ly if you see traf­fic for that device increas­ing (mobile, anyone?).

7. Landing Page Performance

There are a lot of things to mea­sure when it comes to the per­for­mance of your land­ing pages: Bounce rates, CTR, con­ver­sions rates, con­ver­sion assists, etc.

Look for any land­ing pages that aren’t help­ing dri­ve con­ver­sions need to be fixed or elim­i­nat­ed, or the mar­ket­ing dri­ving the traf­fic needs to change.

Either way, you’ll want to know how each page is performing.

8. Blog Click-Through Rates

Blogs are a great way to get traf­fic to your site, but what are you doing with that traffic?

While blogs have noto­ri­ous high bounce and exit rates, that doesn’t mean you have to resign your­self to those ridicu­lous­ly val­ue­less numbers.

Instead, use them to set goals for dri­ving traf­fic from your blog to your main site. A small increase in blog click-throughs can pro­vide valu­able new busi­ness at almost no addi­tion­al mar­ket­ing costs.

9. Customer Lifetime Value

You can’t tru­ly under­stand the ROI of your mar­ket­ing efforts until you have a good idea what the aver­age cus­tomer will spend over their lifetime.

Let’s say, for exam­ple, that it costs you $500 to bring in a new sale or client. But they only make a $500 pur­chase. Well, that seems like a net loss, once you con­sid­er the cost of every­thing else beyond your mar­ket­ing investment.

But what if you knew that that cus­tomer will go on to spend $500 every six months for the next five years. The aver­age life­time val­ue of that client is $5,000. Now, $500 to get that cus­tomer doesn’t seem so bad, eh?

That’s not to say you want to come out at a loss on every first-time cus­tomer, but if the ini­tial invest­ment brings a hefty long-term prof­it, you can more eas­i­ly chalk up that first sale as a mar­ket­ing expense, know­ing prof­its are to come.

10. Brand/Non-Brand Factors

Keep an eye on and dif­fer­en­ti­ate between brand and non-brand searches.

Brand search­es tend to have a high­er click-through and con­ver­sion rates than non-brand because you’re hit­ting peo­ple already famil­iar with you.

By sep­a­rat­ing out this data, this gives you addi­tion­al insight into what is or isn’t per­form­ing up to par.

11. YoY comparisons

Final­ly, when com­par­ing data, try not to com­pare month to month as that doesn’t take into account sea­son­al­i­ty or even oth­er month­ly relat­ed abnormalities.

Look at year-over-year com­par­isons to get a true sense of how your cam­paign is improving.

Are You Getting ROI?

This is the ulti­mate ques­tion, espe­cial­ly those in the C‑suite. To pro­vide an informed answer, you have to get your head around these met­rics. Let the met­rics tell the sto­ry of your mar­ket­ing cam­paign and adjust accordingly.

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