Which Digital Marketing KPIs are the Most Important to Track?

If you have opened this article, I assume you are interested in the topic of marketing. Maybe, you are a marketing specialist, or you would like to start a career in marketing, and you are looking for some insights into what this job involves. Maybe you are a company CEO looking for ways to improve your company's outreach. In all cases, I am glad you are here, so without further ado, let me tell you what you will invest a few minutes of your valuable time in.

As a marketing manager at AcuPower LTD, I have a broad scope of things I should handle. It is not only social media management, of course. I am involved in content marketing, our website's improvement, SEO, and marketing analysis. You may be managing even more aspects of marketing than I mentioned here. But all our marketing efforts should have goals; otherwise, it will waste time and resources. To make your marketing more efficient, you need to prepare your KPIs, which will help you track whether your campaigns are leading the company in the right direction and whether your marketing strategy helps your company achieve its aims and grow. So, today, I will share the most crucial marketing key performance indicators.

If you are new to the term KPI, I want to invite you to the article that explains it in depth and provides some examples. But overall, KPI, which stands for a Key Performance Indicator, helps you track how well you are doing in the long run toward a specific goal.

Now, let's look at marketing KPIs that you should measure:

• Customer Acquisition Cost (CAC)
• Lifetime Value of a Customer (LTV)
• Return on Marketing Investment (ROMI)
• Marketing Qualified Leads (MQL)
• Net Promoter Score (NPS)
• Organic Traffic
• Social Media Activity
• Advertising Metrics
• Share of Voice

Customer Acquisition Cost (CAC)

According to the name of this indicator, you need to know the cost of a customer your company gets. According to your results, you will see whether your strategy works or doesn't. If your CAC is high, you should optimise your marketing, automate more processes, learn your customers and listen to what they say, and improve your message to fit your customers' needs.

How to calculate your customer acquisition cost? The formula is to divide the total marketing cost over a certain amount of time by the number of new customers gained during that same time.

What does CAC incude?

• salaries to sales and marketing specialists;
• customer relationship management (CRM) and marketing automation software;
• use of outside firms for marketing, advertising, or creative needs;
• advertising;?
• funding for events and conferences;
• the amount of discounts applied to the list price of a product is included.

Lifetime Value of a Customer (LTV)

The lifetime value of a customer is a measure of how much money a company can count on receiving from that client. LTV is a crucial measure that you may use to improve your understanding of cost and advance the development of your organisation's decision-making, but it can be pretty challenging to grasp in a young or digital business when there aren't much available data. Most companies commonly calculate the LTV over 1, 3, or 5 years.

There are two more measures we'll need to calculate LTV:

1. Churn rate:?this is the total number of subscribers that cancelled their subscriptions or stopped making payments during a specific time frame. If you started the year with 100 customers and lost 5, your churn rate is 5%.
2. Average Revenue Per User (ARPU): the sum of all your current account revenues. Alternatively, monthly recurring revenue is divided by the number of active users. If you have 100 customers and 50 generate $50 in revenue per year while the other 50 generate $100 in revenue per year, your ARPU is $75.

Now, let's look at how to calculate the lifetime value of a customer.

If you have a high customer turnover rate, your LTV will be low. At the same time, if your CAC is higher than your LTV, you're probably spending too much money getting customers.

Return on Marketing Investment (ROMI)

Return on investment in marketing is how much money you make compared to how much it costs to market your business.

It's important to remember that this formula assumes that all sales growth is due to marketing. It would be best to consider sales that don't come from marketing to get a more accurate picture of how well the marketing works and how much money it makes back.

A good return on investment (ROI) in marketing is at least five to one. To rephrase: you're doing well if you can generate $5 for every $1 spent. A return on investment (ROI) of 10:1 is excellent since it means you made $10 for every $1. Marketing is probably losing money at a return on investment of two to one or less.

Marketing Qualified Leads (MQL)

A marketing qualified lead (MQL) is a lead that has shown interest in your organisation and has the potential to develop into a potential customer if you improve your connection with them. This key performance indicator helps track the number of leads generated by your marketing team. When the MQL is ready to talk to your sales team, this is an SQL, which is a Sales Qualified Lead.

Net Promoter Score (NPS)

You definitely saw an email or a pop-up window on a web page asking you to evaluate the service or product from 0 to 10 or whether you would recommend the company use the same scope from 0 to 10. Have you thought about why this specific scope is used? According to the choice of the customer, marketers can identify whether they are happy or not overall. There is a particular formula for NPS, but before we go there, you should know how the customers are distinguished.

If you chose from 0 to 6, you are a detractor. It means you are a person who won't recommend the company/product/service. If the choice is 7 or 8, you are a passive customer, which means you are satisfied to some extent, but you are not a loyal client yet. And if you pick 9 or 10, you are a promoter. You are a loyal customer with a high chance of bringing new customers to the company by word of mouth.

So, here is how to calculate the Net Promoter Score.

While passives aren't counted in the NPS score, you shouldn't ignore their significance. Any effort to find out what you might do better/differently to win them over would be well worth it, especially if they give you a score of 8.

Organic Traffic

Organic traffic is the number of people that find your website through natural (i.e., unpaid) search engine results. This only means they came to your website or blog article after searching for a relevant phrase on Google instead of clicking on one of your sponsored ads. Keeping your blog fresh with new and exciting posts is the most distinctive approach to boosting your site's organic traffic. The most excellent analytics tools for monitoring your organic traffic statistics are Google Analytics and the Google Search Console.

What makes organic click-throughs so crucial??

First, targeted audiences are more likely to be reached by organic traffic than by ads. This indicates that users who find you through organic searches are more likely to be interested in what you have to say than those who see your ads. This increases the likelihood that they will become paying customers.

Second, unlike sponsored advertising, organic traffic grows over time. Once you've gotten to the top of the search results page, you can usually expect to stay there for a while. However, paid traffic is typically unpredictable and ceases when you stop paying for it.

There are several metrics that organic traffic includes, but it is better to highlight them in a separate article; what do you think? Let me know in the comments below if you are interested in this.

Social Media Activity

Social media plays a vital part in marketing nowadays. Engagement may be defined as any action on the part of a client or potential customer that results in a positive outcome for you. Regarding social media, engagement is one of the most important key performance indicators. You could monitor responses to posts with the like, share, comment, message, tag, or mention buttons.

How to calculate social media engagement rate:

In this case, total engagement includes all interactions (shares, comments, reactions, etc.). Engagement can help you determine how well your social media posts are doing.

Advertising Metrics

Metrics for advertising show you where your efforts are paying off and where you might want to make adjustments. Depending on which platform you use to run your ad campaigns, the metrics can vary a bit. Advertising campaigns may be fine-tuned based on results, with successful strategies expanded upon and less effective ones abandoned. Let's take Google Ads metrics today, and if you want to learn more about Facebook and Youtube ad metrics, text me in the comments.

Google ads metrics comprise:

• Total site traffic, which includes referral, social, email, organic, paid search, other, and direct sources;
• Bounce rate measures how many visitors to your site do nothing but look around before clicking "back" or "close.".
• Impressions (how many times your display ad has been shown on a third-party site, or how many times it has been shown in paid search advertisements)
• CPM (cost-per-thousand impressions) is the amount you're willing to spend per thousand impressions for advertising on Google's Display Network.
• Clicks let you track what people do on your ad or web page and show you how well your marketing message is getting through.
• CPC (cost-per-click) is how much you pay every user who clicks your Google ad.
• Conversions mean a wished completed activity by a user on your web page.
• CPC (cost-per-conversion) is calculated by dividing your total cost by your total number of conversions.
• Average cost-per-acquisition (CPA) is how much you were charged when someone clicked on your ad.
• Return on Advertising Spend (ROAS) helps evaluate the profitability of individual advertising campaigns instead of the marketing department as a whole.
• The engaged visit rate is the opposite of the bounce rate, and it measures how good the visits are that come from your display advertising campaigns.
• Quality Score is scored on a scale from 1 to 10, and it's a big part of how paid search ads on Google and Bing rank. Advertisers can move up in the SERPs if they have higher quality scores.

Share of Voice (SOV)

Share of Voice is a way to determine how much of your brand's market is compared to your competitors. If you have a more significant percentage of the market, you are more established and trusted by your audience.

How to calculate the share of voice? It could be your social media mentions, website traffic, link clicks, or paid advertising clicks. You need to divide your brand's measures by the total market measures.

To improve your SOV, you should keep growing your social media presence, making your posts consistent and more engaging. You can also make the content on your posts and website more relevant, which will help your SEO increase.

Where to track all your KPIs?

You have a clear path ahead when you can see your progress using numbers. You can understand what works and doesn't and what you should improve to help your company acquire more customers and increase its voice. Of course, you can use Excel, where you can keep all this data. But it will be time-consuming, and there is a high probability of chaos and lacking some of the information you need. On the contrary, you can use the ERP system, which will be helpful not only to you and your marketing team. The whole company can benefit from it.

Acumatica, the True Cloud ERP, is capable of plenty of things. Many companies managed to decrease their operational costs by 30% and double their revenue within a year after the implementation. Acumatica has rich functionality that will let you automate many processes and reports, significantly decrease the number of errors and connect all employees and departments. This is especially crucial for companies with many offices in several countries.

Speaking about marketing, Acumatica lets you track everything starting from leads and finishing with email campaigns. I've attached a screen below showing all the opportunities available.

Our team at AcuPower is experienced and adept at Acumatica implementation and development. We can show you how your company can benefit from this ERP system and help you take your business to the next level. We are reliable partners, and your success is our top priority. To meet with us, schedule a demo at our website: https://acupower.co.uk.?

Conclusion

One of the marketing aims of every company is to make the company's brand well-known and generate traffic. You are unstoppable with the help of the mentioned KPIs and the right tool in your hands. If you have read till this very moment, it means I managed to give some valuable data for you. If so, I will be happy to see your like under this article. Have a great day ahead!