Numerical data always tells a story. When it comes to growing your business, digital marketing KPIs provide critical insights into which of your strategies are gaining more customers, producing more engagement, and delivering meaningful results for your time and money.
Below we outline the most important digital marketing KPIs examples you need to implement in 2021.
Lead Sources
Lead sources provide a good indication of the long-term success of your business. This digital marketing KPI gives you insights into where your target customers spend their time. It also tells you where you can spend your marketing dollars to get the most sales in return.
Lead sources also tell you about your diversification. If all your prospects come from a single source, a disruption or issue could negatively impact your company. It would be best for your team to create a graph that communicates what percentage each lead source makes up. When you diversify your sources, it will strengthen your business for the future.
Average Cost Per Lead
The cost per lead KPI will give you critical guidance in forming your marketing budget. Your team should understand how much each lead costs for your business. If you are unable to convert the leads, there might be a problem with the selling strategy, not the marketing strategy.
To evaluate the cost per lead, take the total money spent on a campaign and divide it by the number of leads gained. Compare this figure to your other campaigns, and then double down on the lower cost per lead source.
Cost Per Acquisition
Your company should also know how much it costs to acquire a new customer. You should also identify the profitability for each of your acquisition strategies.
To find out your cost per acquisition, find the total amount spent to gain a new customer for an individual marketing channel. Then, you should divide it by the total number of new customers.
Lead Conversion
How effective are your sales and marketing teams at converting leads into customers? Lead conversion is critical in understanding your company’s ability to close sales. If you find that you have many leads that do not turn into customers, it could be an issue with the selling process.
There could also be problems with your funnel, website, or final stages of the marketing campaign.
So, how do you find your lead conversion percentage? You simply take the total converted leads and divide it by the total amount of leads. After you multiply this figure by 100, it will provide you the percentage of leads converted.
As you scan your different advertising sources, double down on the high-converting channels, and then realign your strategy on the underperforming ones.
Social Media Engagement
Social media engagement is one of the essential digital marketing KPIs. It provides insights into how much your loyal customers and followers interact with your company’s content. Social media engagement data may communicate that you need to develop more engaging social media posts.
To find your social media engagement insights on Twitter, Facebook, Instagram, or other, follow these simple steps:
- Identify your period of time
- Count the number of shares, likes, and comments
- Divide this total by the number of followers you have
- Multiply by 100
You can also perform this exercise by post category. You can measure your engagements on inspirational posts, product or service highlights, or staff updates. Find out which types of content your fans engage with the most or least, and then adjust your strategy accordingly.
Lifetime Customer Value
A customer is worth more to you than one purchase of a product or service. The lifetime customer value KPI gives you insights into what a customer is worth beyond this single purchase. This digital marketing KPI is especially critical for businesses with a subscription service.
To figure out the lifetime customer value, you will need to find your churn rate. This metric shows how many people cancel their subscription or package with your company each month, as a percentage of your total customers. You then utilize a formula of 1 divided by this churn rate, which gives you the average length of time a customer will do business with you.
Metrics like lifetime customer value are critical for long-term revenue forecasting. It will also give you key insights on how to maintain a robust pipeline and reach your sales goals.
Project Time Invested vs. Returns
This digital marketing metric is a vital measure of productivity. It also conveys the worthiness of your marketing efforts. Measuring this KPI involves recording the total time spent on a project or marketing pitch, and then comparing it to the profit generated from the venture.
This data gives you a number that indicates the net income generated per one hour of marketing project work. If you bring in less revenue than usual, you may need to evaluate your current marketing initiatives.
Click-Through Rate on Emails
Email marketing is still a powerful tool in growing your business. This digital marketing KPI delivers insights on how much your customers engage with the promotional emails that you distribute. You can find out this data by taking the total amount of clicks from a campaign and then dividing it by the total emails sent.
To maximize your marketing dollars, you can identify which of your email marketing campaigns have more clicks than the average. Study these emails and understand why they were more popular. You can then reinvest time and marketing dollars into running similar campaigns.
Bounce Rate
Your company website is also a vital engine that drives new leads and sales. The bounce rate KPI tells you how many customers visit your site, and then leave right away. Bounce rate may indicate weaknesses within your website, and it will tell you which pages are less popular than others.
To accurately calculate bounce rate, you should take the number of visitors that only navigate to one page. Then, divide that number by the total visitors. Once you multiply by 100, you will know your bounce rate.