As a digital marketer, you know the digital KPIs to track for your agency, but you also track KPIs for your clients. Your clients come from any vertical, in any industry – but are all competing in the digital arena. They track their own business and human-resource KPIs, but rely on ‘their’ agency to make sure marketing efforts are both effective and cost effective. It’s much like you are the mechanic and their digital collateral is their car. Clients don’t always understand the details and it’s pretty easy for them to feel swindled. You are the expert and your objective is not to repair individual problems but to build campaigns and foster relationships. Your client’s wins are your wins. Are you tracking the right KPIs for your clients? Will you be able to show some marketing wins? These five digital marketing KPIs will put you on the right track.
Digital marketing objectives are a specific breed. So, how do you know where to start? There are a plethora of must-haves for any company. These are standard digital KPIs, the results of which will filter into our five more-refined KPIs. These include bounce rate, page views, reach, conversion rate, ROI etc. and all are all available in your Google Analytics account – see our blog post Top 5 Google Analytics KPIs to Track. With these prepared, it’s time to think about using consolidated data (not just from Google Analytics).
A common error in setting marketing KPIs is to track too many. There are a lot of vanity metrics that appear important but these five have strong returns. From an agency point of view, focus on the KPIs that have the biggest impact. Some factors to consider when looking for tangible results are:
- Where do you spend client’s marketing dollars?
- Is social media paying off in the long term?
- How many qualified leads are coming from mobile first?
- Are landing pages achieving set objectives?
- Is the right KPI dashboard properly setup?
The Top 5 KPIs for Digital Marketing
1. Customer Acquisition Cost (CAC)
Customer Acquisition Cost is the total spend required to convert a potential customer into a customer. CAC includes the product cost plus all other costs, such as research and marketing, spent on attracting a customer. The old business adage, “You can’t manage what you don’t measure” is on point when measuring your acquisition costs. Two common failures, primarily for startups, are:
- To under budget for customer acquisition and,
- Not measuring data properly.
According to Lon Safko, in his book the Fusion Marketing Bible, every business should look at its cost of customer acquisition at least twice a year and after each campaign. Once per quarter is an even stronger, more usable metric. For a deeper, more accurate look at the acquisition costs, split them into different channels or campaigns per quarter (like in the example chart below).
Customer Acquisition Cost By Marketing Channel
a) Organic Traffic
How much are you spending to increase your organic traffic? What are your true Customer Acquisition Costs for this channel? It should be noted that this metric is difficult to track because often there are multiple players and efforts involved. You may not notice your site’s traffic increasing right away, but it is important to pursue because the results are so valuable. The value starts to show when your site ranks high in an organic search. This lends credibility to your content. You are viewed as an expert and this builds trust with your visitors. Although there are costs, trust cannot be bought, it has to be built.
The cost involved in increasing your trust is not a purchase, but an investment. The investment, often substantial, is mostly upfront through building and maintaining your site to be search engine friendly. This pays off in spades and is easy to build into your client’s long-term digital ROI and spread over a depreciation period, while the monthly maintenance fees factor easily into cost of customer acquisition.
b) Paid Traffic
Paid traffic can require a steep monthly budget, depending on the keywords you are bidding on or display ads you are placing. More often than not, the conversion results are not as effective as organic traffic. Although, as a complementary marketing effort, it can be potent for startups. A PPC campaign can be the perfect effort for specific, stand-alone needs such as the introduction of new products or services. With PPC, it’s easy to see the returns for each campaign if you are tracking the right metrics.
- How many leads converted from a particular paid campaign?
- Were the most effective keywords in play?
- Was the cost worth it?
- Are there other channels that could yield the same results for less outlay?
c) Social Traffic
How much does your client want to invest in social each month? Engagement may be the goal of social, but conversions are the goal of your client. Are the social channels achieving conversion? Are you producing enough good content and is it being published on the right platform? For example, if you are trying to engage an executive audience, LinkedIn might be the better platform, even if Facebook has the larger audience.
d) Email Marketing Campaigns
Tracking open and click rates are fundamental to building longer-term drip campaigns. Do customers consume the content you are sending out? Do you have a solid content strategy? Are your emails building a relationship with your target audience or alienating them due to inbox clutter? Keeping track of all these metrics will help refine your campaigns with each send.
e) Television/Radio/Non-Digital Advertisement
Although it can be difficult to track visitors that find your site because of a radio or TV ad, it is useful to know the impact of non-digital marketing efforts. Tracking this involves comparing traffic with media flights (dates they ran). Were there any spikes during the campaign? If not, is a media strategy a worthy investment when digital might suffice? If there were relevant changes in traffic, it might be worth pursuing offline efforts.
Since business could track KPIs, Customer Acquisition Cost has been at the top of the list. If you don’t understand which of your expenses are simply that, and which are investments, you are merely gambling. A well-designed CAC KPI (excuse the initializations) can highlight where you are making wise investments and where you are simply throwing money away.
2. Landing Page Conversion Rates
A landing page is a great marketing tool. As a standalone page, distinct from the main website, it is designed around a single, focused objective. To be effective, landing pages must make worthwhile conversions easy. The action you want the user to take must be evident and your messaging clear. In a landing page environment you can limit the options for visitors and guide them towards an intended goal. Tracking becomes straightforward and changes easier to evaluate. Conversion rates for a landing page (i.e. successful completion of the intended goal of the page) can depend on different things. Primary consideration is, of course, what the conversion is.
- Is it signing up for a newsletter or downloading a white paper? If it is as simple as a request for more information, you can expect a higher conversion rate, sometimes up to 20%.
- Are you asking your user to sign up for a free trial but will require them to include their credit card information? You should expect a much lower conversion rate.
The expectations for a Landing Page Conversion Rate should be inline with the commitment you are expecting from the user. Another important factor is the channel. How the user got to your landing page plays an important role. Did the user find the landing page organically or were they led there from a site they already trusted? Although it can take longer to see results, these options typically convert higher than paid search traffic.
If your landing page was designed around focused keywords and a clear theme, organic searches will drive traffic. Google prepared a custom report (within your Google Analytics account) where you can measure the quality of your organic search traffic. This can and should be done for each landing page. From here, you can track goal conversion rates, revenue, and per-session value to demonstrate the value of organic traffic.
In addition, one of the most valuable dashboards you can create is an analysis of your top converting landing pages. This will help you understand which content is most engaging for your audience. In turn, this contributes to generating ideas for future content creation. MOZ explained this concept in detail in one legendary whiteboard fridays post. With datapine’s Google Analytics Connector you can spot your top converting landing pages and make a chart like the one below. This will give you a clear insight as to what pages are most effective at converting visitors.
Top Ten Converting Landing Pages For Organic Traffic
Conversion is the primary element of your paid search strategy. If you’re aren’t converting lookers into buyers at a reasonable rate, what are your objectives?
Again, what the conversion is is always a focus, but A/B testing is important too. Developing your messaging, calls to action etc. based on testing will help increase your conversion rate by showing you what is and what isn’t working. Or, showing you what is working better. Landing page refinement is somewhere between an art and a science. It is an experiment. Make sure you clearly identify your objective before beginning your testing, otherwise, it is simply guessing.
Once you have outlined your hypothesis, change things incrementally to ensure you can understand what made the difference. Whether you start with messaging, call to action or usability, make sure and track everything!
3. Mobile Traffic Conversion Rates
The predicted-shift has finally happened: users are now accessing more websites from mobile than desktop. According to a new study released by comScore, U.S. users are now spending the majority of their time consuming digital media within mobile applications. Smartphones and tablets are accounting for more web browsing traffic than ever. If your site isn’t optimized for mobile devices, you’re missing a key demographic. Not only is the number of visitors who find you on mobile relevant, but it’s also how effective your mobile presence is.
Google’s mobile-friendly update will keep the bounce rate in check, but you should track conversion rates for mobile traffic (and landing pages optimized for mobile) as well. Initially agencies were the only ones designing with mobile first in mind, which was an important start in optimization. Now we have to catch up and think more broadly about what mobile first means for marketing. Not only should websites be optimized for mobile, but marketing strategies as well.
Universal Analytics gives you all the options needed to track your Mobile Traffic Conversion Rate. A user searching for your site on any device, is the same person, even when they switch devices. The Universal Analytics user ID associates multiple sessions with a single user giving you a more accurate view of your visitors and their behaviour.
Understanding mobile traffic conversion can take some time and you may find you need to tweak campaigns regularly to achieve results. For example, in the chart below you see that in the first campaign, desktop and mobile are achieving approximately the same conversion results: a success! In the second campaign, there is a little bit of room to optimize mobile efforts. The third campaign clearly has issues. The low mobile conversion rate shows flaws in mobile marketing efforts. Perhaps Google has marked this page as mobile unfriendly. This one requires immediate attention and possibly a new strategy.
Desktop vs Mobile Traffic by Landing Page
4. Social Media Reach/Influence
It’s no secret that the advent of social media can be a rabbit hole for marketers. It seems an intangible and has such a life of immediacy. Every tweet is a moment and status updates are a passing thought. There are some important metrics to track though. A suited KPI for your Social Media Reach allows you to show clients the effectiveness of their social media presence. This KPI can measure things such as number of likes, retweets, shares, etc. It can also measure more complicated data, such as number of leads generated from each social media platform, and what percentage of traffic is coming from each. In order to understand what you need from your social metrics, some questions to consider are:
- How many people get to your site via social media?
- Who are these people and which SM platform did most of them come from?
- Investing in good content is important but which content is working?
- Which social-media outlets are the most cost effective?
- Which sites are converting?
Creating charts to visualize your social media data will help you understand the status of your campaigns at a glance.
Conversion Rates & Cost per Conversion by Social Media Channel
In the chart above you’ll notice the conversion rates of social media channels. LinkedIn is the strongest at converting visitors with a 9.9% conversion rate. Twitter is a close second, which is valuable information when building your social strategy; however, when you look at the Cost per Conversion, which should matter most for digital marketers, Google+ is the most effective and cost efficient. In this case you would get more conversions for your money, even if your conversion rate is less effective than LinkedIn.
The notion that social is a free arena of captive users is not only dated, but this arena of users has shown us that they won’t even listen unless we produce good content. No matter what you are hoping to achieve through social, if you don’t create interesting, useful and ideally pretty content, you won’t even get a visit, let alone a conversion. Formulating social media engagement is serious business. A strong content strategy with well-defined KPIs will show you what’s working (and what isn’t).
5. Customer Lifetime Value (LTV)
Customer Lifetime Value (LTV) is a metric used to predict the profit you’ll generate from your relationship with your customers. It’s important to understand how it’s linked to the Customer Acquisition Cost, and you’ll find this in one of our previous blog posts we explained the relation between LTV, Customer Acquisition Cost and Average Revenue Per User (ARPU) in detail. LTV is reasonably simple to calculate, but often overlooked. It allows you to determine the buying history of your client’s audience. This information is valuable because it helps determine whether or not you client needs to invest more into customer acquisition or customer retention. The smaller the customer lifetime value, the more new customers, in theory, are needed. In turn, the higher the customer lifetime value, the fewer new customers. This simple equation shows your client how to spend their marketing dollars and shows you how to target your efforts.
With a good inbound marketing automation in place, most of the information should be gathered for you. How you translate that information will determine your strategies’ success. Basically, LTV is the projected revenue that a customer will generate during their lifetime.
Customer Lifetime Value by Month with Trend Line
If properly calculated we can determine how much customers spend, how often they spend, and what loyalty programs have incentivized them to keep spending. These are the “happy customer” metrics. Investing in retention (by keeping our customers happy) shouldn’t be undervalued and it might not be necessary to spend as much on attraction.
Similar to LTV is visitor loyalty. This KPI for non-E-commerce sites is very useful. If your site does not require a sale for a conversion, this metric can measure loyalty and recent visits. Be careful when reporting Visitor Frequency though, as most web analytics tools will automatically put New Visitors into those counts. Make sure to filter them out to better understand the loyalty component.
With the wealth of information available, it can be overwhelming to choose which KPIs are best to track for your clients. By using the top five Digital KPIs (for clients) above, you can start to identify areas that need attention because nothing (or the wrong thing) measured means nothing gained. Learn how datapine’s dashboard software can help you to turn your web data into insights – start your free trial today!