Marketing campaign metrics, also known as KPIs, play an important role in the monitoring and planning of marketing activities as well as possible ways to optimize them for better results. They form a base of information for any business. It’s helpful not only for well-known digital companies like TonyBet casino in Canada and Amazon, but also for offline businesses, like a local grocery store or a restaurant.
Today’s technology makes it possible to automate most of these functions. However, it’s not unreasonable to understand the different types of digital marketing metrics and their potential relevance to your business. That’s what we’ll talk about now.
Return on Investment (ROI)
This metric is one of the most important. Thanks to it, you can find out how effective your investment in advertising is.
How to calculate ROI? Subtract all marketing expenses from your total income, and then divide the balance by the same expenses. Marketing costs include any campaign spending: SMM, email marketing, print and digital marketing, etc.
Through tracking this metric, management decides how much to spend on current or future marketing campaigns. A negative ROI indicates that the campaign should be revised or shut down completely; a positive ROI indicates that it should be extended or expanded.
Customer Lifetime Value (CLV)
It establishes what value, in terms of purchases, a particular customer represents over the life of your company.
This metric is useful for understanding which customers to focus on in order to increase value, drive sales growth and maximize profits for your company. Instead of looking for customers in hard-to-reach markets, focus more on developing your existing customer base.
Customer Acquisition Cost (CAC)
Through this metric, organizations determine the amount it costs them to acquire a new customer or buyer for their products and services. This metric is determined by dividing the sum of advertising, sales and marketing costs by the number of new customers for your company.
CAC is important for businesses because the low cost of generating leads and subscribers means that your company’s costs of attracting new customers will be small. Thus, you will generate more revenue and profits.
This metric has recently emerged with the advent of the age of Internet pervasiveness. Organizations now use a variety of tools to determine where to invest their money.
Click-through Rate (CTR)
It’s one of the most valuable metrics for determining the effectiveness of an advertising campaign in a digital environment. It’s measured by counting the number of people who click on a link in your email or website. For example, if 100 people see your ad but only ten click on it, your click-through rate is 10%.
When your click-through rate is high, your advertising or marketing strategy is successful because a large number of people who see the ad are interested enough to open it and become your potential customers.
By analyzing the metrics, you will determine which ads are worth changing and which ones are effectively attracting leads. Although CTR is generic, it ranks high on the list of examples of marketing metrics because it shows a favorable picture of your target market’s behavior.
Cost per Action (CPA)
The metric refers to an affiliate marketing model in which payment is made when a target user commits a specific action. These actions vary widely in nature and can include purchase, click, subscribe, sign up for a trial, fill out a survey, download, and so on.
This model is often referred to as “pay per action” (PPA) because the advertiser will only make payment upon completion of the desired action. For such models to be financially profitable, high conversion rates are required in most cases.
This is why small and medium-sized businesses use “cost per click” or “cost per impression”. These models do not prevent good profits when conversion rates are low. Through CPA, it’s easy to track how much a company is investing in carrying out a particular desired action. Reporting is usually done once a month.
Net Promoter Score (NPC)
NPC is widely used in marketing. It gives an understanding of what customers think about your products and services and whether they are willing to recommend them to their family, friends and colleagues. In most cases, customers are asked to answer just one question to determine this metric.
In this survey, customers are asked to select a number between -100 and 100. Negative numbers indicate a negative attitude toward a company, while positive numbers indicate a favorable opinion.
If the client chooses 100, it means that he is satisfied with everything your company does, and vice versa. To get reliable data on how customers feel about the company as a whole and whether they are ready to recommend its services and products to others, the average customer loyalty index is used.
This marketing measurement is useful because companies get a warning of customer dissatisfaction with implementing changes before they completely abandon products and services.
Summary
There are many key marketing metrics that are used to analyze and monitor business initiatives and marketing activities. As data collection technologies and statistical methods evolve, their number continues to grow.
To stay ahead of the competition, you need to have a clear understanding of what marketing metrics are and keep up to date with what’s happening in the field.