10 Digital Marketing ROI Metrics You Need to Know
Running a digital marketing plan is an important part of managing a business, but it’s also crucial to track your return on investment (ROI) to show management that you’re making progress and sticking with your overall strategy. Digital marketing is largely based on the ROI of your business. It’s important to monitor your digital campaign, and prove their effectiveness with data. There are a number of ways to determine digital marketing ROI metrics. Some metrics you might already be familiar with include revenue and revenue per user, which show how effective your marketing methods are at increasing revenue. Other metrics you may be less familiar with are ecommerce conversion rate and social media reach.
Cost Per Lead (CPL)
The cost per lead formula looks like this: Cost of advertising x number of charges divided by total sales from leads. The key is to determine how many customers you want to sell. Use your best guess, then subtract the cost of advertising from that estimate. You may need to experiment with different lead counts to find out which is most effective for your business and budget.
Lead Close Rate
The lead close rate is a metric used to track how often salespeople can close leads they generate. It’s a great way to measure whether your reps are closing more qualified leads than others in your industry and other sales teams.
Cost Per Acquisition (CPA)
The cost per acquisition (CPA) is a measurement of customer acquisition and can be used to gauge the success of paid advertising campaigns by analyzing campaign performance. If a company spends $1,000 on Facebook ads and makes $2,000 off that ad spend, its CPA would be $1.
Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is one of my favorite metrics because it tells you how much money the customer will spend with your business over their lifetime. This includes every purchase they make with you and any spending related to their referrals and recommendations.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is a fundamental metric for measuring the success and profitability of your marketing efforts. It is the amount of money it costs your business to acquire a new customer.
Net Promoter Score (NPS)
The net promoter score (NPS) is a great way to measure customer loyalty. It’s based on one question: How likely would you recommend your company or product to a friend or colleague?
Average Order Value (AOV)
This metric refers to how much money customers spend during each visit. If you have a high average order value, you’re selling more expensive products than if you had a low AOV.