Digital marketing isn’t a new beast entirely. It shares much of its DNA with its traditional counterpart, but many of the techniques that have been the most successful have been based on the new flexibility afforded by online media and promotional platforms. But one area where its advantages over traditional marketing really shine is in the analysis phase. When It comes time to justify the existence of your marketing efforts, there are specific metrics we can point to. Here are some of the best metrics you can look at to see whether your marketing budget is having an effect.
Customer Acquisition Cost
This number really summarizes the efficiency of your digital marketing efforts. You can arrive at it by adding all of the marketing spend over a given period of time, including the salaries of marketing employees, commissions, and bonuses, and divide it by the number of new customers added in that time period. The result tells you how much you’re spending to earn each new customer’s business. You’ll see this referred to as CAC (Customer Acquisition Cost) or COCA (Cost of Customer Acquisiton). The lower your CAC, the more efficiently you’re spending your money. It can also inform your plans for scalability.
Inbound Sales Revenue
Another KPI (key performance indicator) is the total revenue that your inbound marketing efforts are producing. Subtract your sales from other sources from your total revenue and focus on the amount that your digital marketing is bringing in. Is it worth the expenditure? If not, you may need to retarget.
Website Traffic to Lead Ratio
It’s not enough to attract traffic to your website. You need to also be generating conversions, flipping customers from aware or interested in your product to making purchases or signing up for mailing lists. How many visitors to your website convert to actual leads? Calculate this KPI to be sure your site is effectively selling your product and/or gathering user’s information for further retargeting.
Sales Team Response Time
One aspect of marketing that hasn’t bee obliterated in the digital age is person to person sales. That means it’s still vitally important that your sales team respond to and pursue leads quickly, as leads degrade substantially over time. Connecting quickly with leads generates greater sales, so check out this KPI to see if your systems for notifying and dispatching sales staff are up to snuff.
Lifetime Customer Value
Retaining customers is yet another task that has largely fallen to digital marketers. That means this KPI, calculated by multiplying the average sale per customer by the average number of purchases per year by the average retention time, is another focal point for demonstrating the value of your efforts. If you can show that each customer you’re attracting adds a substantial value to the company, it means you’re really doing something right in the process of establishing relationships and branding yourself.
The wealth of information we can access to evaluate the efficacy of our campaigns is staggering. If we choose the right analytic data to look at, we can re-shape our strategy to capitalize on our successes and remedy our failures.