How to Measure Digital Marketing Returns On Investment
How to Measure the Return-On- Investments from Your Marketing Efforts
The evolution of marketing into employing technology as a tool comes accompanied with added advantages that enhance efficiency and effectiveness. The use of technology varies with the nature of business services as some enterprises have converted wholly to digital marketing while others have to combine technology with traditional marketing to convert a prospect into a paying client. That is what marketing objectives are all about and will cover it in our subsequent discussions but for now I want to highlight important aspects that you should quantify in terms of costs incurred in comparison to the revenue earned.
1. Cost per lead
This is the amount your business incurs to identify those people who exhibit a high potential of consuming your products or services. Cost per lead includes factors such as lead generation from landing pages or targeted traffic on social media platforms or email marketing and display ads. The cost of identifying potential customers should factor the cost of your products and services.
2. Lead close rate
The close rate from potential customers is dependent on the nature of services and products. Leads for low-priced consumer goods and services that convert the leads into paying customers can be tracked using analytics unlike high-value services and products that require direct engagement with the potential customer. The close rate in both cases needs to be checked so as to determine the number of potential customers that end up becoming paying customers from the number identified. This forms good reference for determining your targeting criteria.
3. Cost of acquiring a customer
This is the total cost incurred in identifying a potential customer up to the moment the customer subscribes to your products and services. It can be calculated by deriving the sales generated against the costs incurred in marketing.
4. Average order value
Determining the average amount customers pay for your products or services is a good indicator to show which products and services they prefer in comparison to the rest hence providing you with the opportunity to upsell and improve customer experience.
5. Conversion rate by channel
Marketing efforts that are shared by different channels in attaining the business goals should be segmented in an effort to determine which one has more engagement and conversion rates. This can also be a good indicator as to where the best opportunities lie.
6. Conversion rate by device
Does your business experience conversion from visitors who use desktops and none from mobile devices. The findings could help you scrutinize and improve your website visibility on mobile gadgets.
7. Landing page performance
Landing pages help you understand the specific needs of your customers so that you can tailor solutions that best address them. Bearing that in mind you should be in a position to determine the bounce rates on your landing pages so as to improve on them or eliminate them altogether.
8. Blog click through rates
This would help you measure the quality of your content with regards to driving traffic to your website. The blog sections tend to have very high bounce rates but they would provide meaningful insight into the quality of content that you should be focusing on.
9. Customer lifetime value
Depending on the nature of your business, does your business focus on one-time customers or recurring customers on a relationship basis. In both cases you should determine the value you gain from them from the transactions you do with them.
10. Brand and non-brand factors
Do customers look for your brand because they have heard about it or been referred by other customers or they stumbled upon your brand while searching for solutions from the internet. Whatever the case you should divide the two and measure the performance of each.
11. Year over year comparisons
The duration of periods that best demonstrate how your marketing efforts are faring on. For example search engine optimization efforts need to be compared over several months while paid marketing can be evaluated on a monthly basis.