Here at effloresce, analytics and reporting have always been at the very heart of what we do. Every activity is measured against key metrics so that we can not only learn what works, but also so that we can ensure our clients budgets are maximised. Never has this been as important as in a post COVID world where every penny counts more than ever before.
We have been doing a lot of work recently on ensuring our clients understand the key metrics we use when it comes to Digital Marketing and we thought it might be helpful to share this crib sheet with you.
1. Cost Per Lead
This measures the amount spent to attain a conversion. If you are collecting leads via LinkedIn or via a website form completion for example, you will need to know how much cost you are paying for each lead. If the cost of each lead is more than what you earn by closing leads, then of course this would not be a viable activity and adjustments would need to be made.
2. Click Through Rate (CTR)
This is the % of readers who actively clicked on your article/eshot/post (B2B generalisation is around 0.44% and effloresce regularly achieve upwards of 0.80% for posts written and posted). This metric will show you how relevant your content is and how much it resonates with the reader.
3. Lead Close Rate
How do you track your lead closes? We find it is often difficult to ensure this is reported internally and back to us – online reporting is always so much easier than offline! Measuring close rates also gives you insight into how sales teams and representatives are performing.
4. Cost Per Acquisition
This is a simple sum which can be worked out by dividing your marketing costs by the number of sales generated. By understanding how much a sale is costing you, will ensure you are able to have a better understanding of your ROI.
5. Average Order Value
While you want to see the number of your orders increase, paying attention to the value of the average order or sale can reap significant rewards. Average order value ensures your sales and marketing teams are able to keep track of profits and manage revenue growth. It can often be something as simple as tweaking the user web experience, or adding upsell opportunities throughout the customer journey, which can really make a difference to an average order value.
6. Conversion Rates By Channel
Integrated digital marketing strategies are essential to overall performance and revenue. We are constantly reviewing activity by channel to see which channels are the most cost effective and bring the highest ROI and this is where we then focus our efforts. It is important to know where your customers are, what platforms they are using and how. We can then reach those customers through a variety of channels including organic or paid social media, PPC or email marketing.
7. Web Exit Rate
How many visitors leave your website from a specific landing page? A quick look on Google Analytics will tell you. Higher exit rates tell us which landing pages need conversion rate optimisation to incentivise customers to stay and action what we want them to.
8. Customer Lifetime Value
It’s imperative you know the £ value a customer generates not just for the immediate sale but for the entire time they’re your customer. You could be investing more time with a less profitable client and so its important to concentrate on those which will bring your most value.
Net Promoter Score (NPS) is a metric where customers indicate if they would recommend a product or service to other people and companies. Tracking promoters v’s detractors (customers who have left or are thinking of going) helps you measure and improve customer service strategies and tactics.
10. Return on Ad Spend
Measuring Return on Ad Spend (ROAS) helps identify how well your advertising and paid campaigns are doing. This is particularly important when reviewing performance, comparing channel spend and future forecasting. We generally work on a rule that you should aim to have a 3X return on your investment.
11. Break Even
Once we have some months under our belts, we can look at the number of months it takes to earn back the cost per lead.
12. Customer Retention Rate
It is also important to measure the number of customers your business has retained. We like to use this formula:
Customer Retention Rate = ((E – N) / S) x 100
So for this we would look at the number of customers you ended the period with (E), the number of customers you gained during the period (N), and the number of customers you started the period with (S).
What is the ROI – the million dollar question and one that every marketer and marketing agency needs to ensure they can answer! We hope you found this guide useful and if you would like to talk about any upcoming digital marketing campaigns then please do get in touch.