Key Performance Indicators (KPIs) are numerical metrics that are used to measure performance across different areas of measurement – these are deployed by organizations, both large and small, to help assess if they have truly achieved the goals that were set out initially. Especially in business, you would not want to lend support to a digital marketing strategy that does not generate positive results at the end of the day. With KPIs in place, you will be able to constantly measure, monitor and adjust your strategy as the campaign take its course; timely decisions, such as halting the campaign, can also be made to cut losses.
That said, measuring the right KPIs is just as important. Measuring KPIs for the sake of measuring them may lead to an incomplete or irrelevant understanding of the situation at hand. You might end up making incorrect decisions based on inaccurate or misleading information. Assistance from a good and competent marketing agency can be beneficial to your business, in terms of helping you to determine the right KPIs you need to measure in order to improve your business. Here are some key digital marketing KPIs which every business should seriously consider in tracking.
Do you know if your inbound marketing campaign is bringing revenue to your company; if so, what is the amount? Having a good understanding of the sales revenue involved can help determine the effectiveness of your inbound marketing campaigns. On top of ensuring the activities generate income, there could be specific profit or growth targets that you need to achieve, either to maintain the business or to answer to shareholders. It becomes important, then, to know which activities are money-generating ones, and which ones are not – these can be eliminated and the funds freed up and diverted to the profitable ones. Hence, sales revenue is one key KPI that businesses are often interested in, as it tells you whether your business is performing or not.
Email marketing has emerged and remains one of the most effective marketing techniques in the highly digitalized world we live in today. Email lists are often lengthy and, taking into the account the cost involved sending emails to this list, the cost per email is comparatively low and reaches out to more people easily. Many marketers claim that they are obtaining a higher return on investment (ROI) from email marketing, when assessed against other forms of digital marketing. In a 2016 report by Campaign Monitor, email marketing is found to have the potential to yield a return of $44 for each dollar spent. To derive maximum benefit from your email marketing activities, the following are KPIs which you should be measuring:
- Click-through rate (CTR): this measures the number of visitors who click on an image, call-to-action (CTA) or hyperlink on an email that brings the visitor to your page.
- Conversion rate: this is the percentage of your email subscribers who actually complete an action or specific goal you have set for the business. Using the conversion rate, it shows you the number of subscribers who not only clicked through (an image / CTA / hyperlink) but also went through the entire process to reach your desired outcome.
- Return on investment (ROI): besides measuring conversions, you would also need to have the overall ROI measured, which shows you the profits made for a specific campaign
- Open rate: unique open rates are perfect KPIs, in that they are measured to help you know the effectiveness of your subject lines. It shows you the number of distinct opens of the emails that you have sent to the subscribers on your mailing list.
- Bounce rate: as the name goes, bounce rates tell you the number of emails that failed to be delivered successfully to the inboxes of your subscribers, due to one reason or another (e.g. inboxes are full, email addresses are no longer valid, spam filters in place, et cetera)
Social media marketing
Social media, with its widespread use and impact across multiple demographics, must definitely be part of your digital marketing strategy. Through social media marketing, you can dramatically increase the conversion rates. To learn and understand which social media content is helping you generate the conversions, you would need to keep track of the following KPIs:
- Impressions: these tell you the number of times your content has been shown on a particular social media site
- Click-through and bounce rates: click-through rates will tell you how many people clicked on your content on a given social media site. Interpreted concurrently with bounce rates, these two KPIs will jointly tell you how much interest each piece of content is generating on social media
- Social shares: this shows you the number of shares your content gets on social media; specifically, you can see the amount of traffic going into your website, referred from the various social media channels
Digital advertising, via paid search or pay-per-click (PPC), is a critical component of every online marketing strategy which cannot be ignored. Some of the common but important KPIs to measure in PPC as well as other paid search campaigns include cost-per-click (CPC) and cost-per-thousand-impressions (CPM). The objective in both cases is to determine how much value the advertisement is bringing to your businesses by measuring its ROI.
Your business website KPIs
Most of the e-commerce sales process takes place on your website. Therefore, it is important to track all the necessary KPIs that would help to increase sales and keep your business on its intended growth track. Some of the key website KPIs you would need to measure include: bounce rates by visitors, the amount of time visitors spend on your website, as well as the pages they check on each time they visit you. Just as important is the tracking of the number of cart abandonments to determine what exactly causes these potential buyers to stop their purchasing journey. Addressing and resolving these causes can then turn the situation around to your benefit.