It’s challenging, isn’t it? To identify which KPIs matter the most for digital marketing agencies. That’s why we have created a list of some of the most important metrics to help you identify what’s working for your marketing strategy and what’s it lacking.
Top 15 KPIs You Should Track
Let’s look at the top 15 metrics every digital marketing agency should track.
1. Conversion Rate (CR)
It is the primary metric that shows whether your marketing campaign is successful or not. It calculates the proportion of visitors who are able to finish a particular task or goal on their website or even within a marketing campaign. You can calculate the conversion rate with the formula below:
Conversion Rate (CR) = (Number of Conversions / Total Number of Visitors) x 100
A higher value of the conversion rate shows that you are more successful in getting people to perform the desired activity, such as purchasing, downloading material, or registering.
2. Brand Awareness
Brand Awareness is a tracking metric. It keeps a check on things like brand mentions, social media and relevance, search engine visibility, website traffic, customer surveys, reviews, influencer impact, and media impressions.
3. Website Traffic
Every website receives traffic from several sources. Understanding how visitors land on your website can help you create strategies that ensure a steady flow from different sources. The three most common sources of your website’s visitors are direct, search, and referral. This can also be broken down into traffic based on landing page and keyword rankings using Google Analytics.
4. Click-Through Rate (CTR)
Click-through Rate (CTR) is linked with digital advertising and email marketing. It evaluates the percentage of users that click on a certain link or call-to-action (CTA) out of the overall number of users who view it.
Click-through Rate (%) = (Number of clicks / Number of Impressions) x 100
A higher CTR value shows that your advertisements are compelling and encourages users to click through to your landing page.
5. Cost Per Acquisition (CPA)
The cost of acquisition is the money needed to gain a new consumer. Instances of this are sales pitches, meetings, marketing, and any other action that contributes to your prospective conversion process. For separate items, this metric is also known as Cost Per Acquisition (CPA). CPA strives to acquire a large number of clients at the lowest possible- cost.
6. Return on Investment (ROI)
You can use this metric to calculate the profitability of your business activities or marketing campaigns. It evaluates the return you gain from an investment relative to its cost.
ROI = (Net gain from investment / Cost of investment) x 100
A positive ROI shows that your investment has resulted in a profit, while a negative ROI value means a loss. You should strive for a high ROI value as it shows that you have efficiently used all of your resources with favorable returns on marketing investments.
7. Bounce Rate
The percentage of visitors that leave your website after looking at only one page is known as the bounce rate. It is an engagement metric that reflects the behaviour of your users. A high bounce rate suggests that users did not find what they were looking for or that your landing page was not arresting enough.
8. Monthly Recurring Revenue (MRR)
The revenue guaranteed every month and recurring income from monthly contracts and subscriptions, discounts, and coupons is represented by the Monthly Recurring Revenue (MRR). The MRR does not include the one-time fee paid. The MRR can be calculated as:
Monthly Recurring Revenue = Total number of paying customers x Average revenue per user (ARPU) per month
9. Social Media Reach
It refers to the number of users that have come across your content or profile. It can be calculated as:
Social Media Reach = (Total reach / Total number of followers or subscribers) x 100
10. Cost Per Click (CPC)
Cost-per Click (CPC) is a metric under the financial domain and it is used in paid advertising campaigns. It is a representation of the average cost you will pay every time a user clicks on that specific advertisement. A lower value of the CPC metric shows better cost-effective advertising. A high CPC value indicates that your strategy needs optimization. CPC can be calculated as:
CPC = Total cost of campaign / total number of clicks
11. Engagement Rate
Engagement rate is a measure of the level of interaction users have with your website, its content, and even on social media. It is expressed as a percentage and can be calculated in several methods based on the context. The higher the engagement rate, the more your content resonates with the audience. You can calculate it as:
Engagement Rate = (Total Engagements / Total followers) x 100
12. Lead Generation Rate
Another metric that determines the success of your marketing campaign is the Lead Generation Rate. It is simply the percentage of your business leads that has managed to successfully convert viewers and visitors into paying customers. It represents the effectiveness of your lead generation process.
13. Churn Rate
Churn Rate is a metric that allows you to understand the level of satisfaction your customers have with your business. It measures the number of customers that have stopped giving you business over a certain amount of time. It is a metric that helps you understand the degree of satisfaction a customer has with your brand. A greater churn rate value shows reduced client satisfaction. It is a valuable KPI that affects the net margin as you incur more costs and try to gain and retain new clients.
Churn rate = (Lost customers / Total customers within that period) x 100
14. Customer Lifetime Value (CLV)
It is simply an indicator of the total revenue that can be gained from a single client throughout the business relationship. It draws parallels between the revenue and the predicted lifespan. A larger CLV indicates that the agency is good at finding and retaining new clients. Corrective measures are taken when the CLV is low and CLV is calculated as:
Customer Lifetime Value = Customer value x Average customer lifespan
15. Return on Ad Spend (ROAS)
Return On Ad Spend (ROAS) is a metric that effectively measures the effectiveness of your advertisement campaigns that specifically generate revenue when compared to the amount invested. ROAS enables data-driven decision-making. The higher the ROAS, the greater the success.
ROAS can be calculated as:
ROAS = (Revenue from advertisements / Cost of advertisements) x 100
Contact Glomm today to plan, create, and execute all your digital marketing strategies.
