Today is the golden age of digital outsourcing. A company or digital agency can employ the best individuals from all over the world at the right time. However, online agencies require assistance as well! To track and predict business trends and patterns in the digital age, highly scientific methodologies are required. Marketing campaign metrics, also known as KPIs, are critical for monitoring and planning marketing initiatives and determining how to optimize them for the best results. They provide a solid foundation of knowledge from which marketers and B2B business owners can formulate and implement all business decisions.
Many of these marketing functions can now be automated using modern technology. Understanding the various types of digital marketing metrics and their applicability to your business will be beneficial.
As a marketing agency and advertising strategist, digital advertising assists you in reaching prospects where they spend the most time, i.e., on the internet, and capturing the appropriate target audience.
Let’s examine the Top 12 Metrics Digital Agency Owners Must Track to determine the effectiveness of your digital marketing campaign.
Table of Contents
Top Key Metrics Digital Agency Owners Should Track for Business Success
Customer Churn Rate
The churn rate tells you how many clients are leaving and why allowing you to identify clients who are not a good fit.
The churn rate can be determined by dividing the number of lost customers during a given period by the total number of new customers acquired at the start.
A higher churn rate indicates that customers are dissatisfied, and you may lose more customers shortly.
Taking client feedback (particularly from dissatisfied customers) to identify potential problems can help project-based agencies reduce their churn rates.
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Some strategies for lowering churn rates include:
- Using feedback from leaving customers to identify potential problems
- Recruiting an experienced customer success manager
- Enhancing customer service
- Identifying customer-specific requirements
Customer Lifetime Value
Customer lifetime value is another useful metric for an agency’s growth.
Setting growth objectives won’t be easy if you don’t know how much money each client brings to your business throughout their relationship with you.
You can easily calculate your LTV (Customer Lifetime Value) by multiplying your revenue by the average time a customer spends with your brand.
Once you begin measuring customer lifetime value and analyzing the various components, you can employ specific pricing, sales, advertising, and customer retention strategies to decrease expenses and increase profits continuously.
When you know how much you can expect to earn from a typical customer, you can adjust your spending to maximize profitability and continue to attract the right types of customers. Customer retention is key to CLV. Accurate segmentation can help you find your best customers and determine what works.
Revenue (per segment or service)
The most obvious metric is revenue. It is a key metric as well, but it needs to rely on more to the exclusion of other key metrics. Many people also need to look beyond the headline to determine what is going on. Increasing revenue indicates that your service is adding value to your customers.
However, to see which of your services or client groups are growing, you must track your revenue per client niche and service. For example, your headline revenue could be flat but reflect two declining service lines and one rapidly growing line.
Channel-Specific Traffic
This KPI tells you which channel your visitors came from before visiting your website. Consider this: you have a lot of doors leading to your website.
They may have arrived at your website after visiting one of your social media platforms and clicking on a link. They entered through a social door, in this case. Alternatively, they could have directly typed your URL into their browser’s search bar (a direct door).
Your visitors may have also searched on Google and arrived at your site from the results (an organic door). Or they clicked on a link on another website or domain (a referral door).
Understanding your traffic through marketing channels allows you to see which channels drive the most traffic, allowing you to focus your marketing efforts where they are most effective.
Also Read: Top 10 Web Analytics Tools To Check Your Website Traffic
Bounce Rate
The bounce rate of your website indicates how many visitors need to engage. A high bounce rate indicates irrelevant content, a page that loads slowly, or other issues. However, it can also indicate that a visitor quickly obtained the required information and exited the page. You must do some A/B testing to improve your site if your bounce rate is high.
Gross Margin (per segment or service)
Gross Margin is the basic profit you make from providing your services. Profit before overheads, interest, administration, and other company-wide expenses. Revenue indicates where you add value to your clients. After basic costs are deducted, the gross margin tells you how much value you receive in return.
It becomes a powerful tool when broken down into segments and service levels.
If you have a high revenue but a low gross margin, you should examine your costs or the price you charge – are you charging too little or over-servicing your customers?
Cost Per Click (CPC)
The cost per click (CPC) metric determines how much advertisers pay for ads they place on websites or social media based on the number of clicks the ad receives. CPC is important for marketers because it measures the cost of a brand’s paid advertising campaigns.
Marketers should strive to reduce the cost of clicks while cultivating high-quality clicks and, as a result, satisfied customers.
The cost per click is the amount you pay each prospect who clicks on your campaign. Because it is directly related to your ROI, this amount determines your success probability.
The CPC can be reduced by increasing the campaign’s quality score and relevance. Google has done an excellent job of automating this reporting. The average CPC varies depending on the industry, demographics, and season.
Total Conversions
A conversion occurs when a site visitor completes a specified action on your website or social page. For instance, it could be becoming a paying customer and clicking “buy” or exchanging personal information for the download of a lead magnet or short eBook.
If your website visitors need to convert, you must test to determine what is failing. Is it your design? Are the offers too vague or insufficiently captivating? Does your visitor understand the next step they must take?
It is possible to track the percentage of people who saw your ad, became interested, or even made a purchase. Conversion data allows us to make educated decisions about extending, tweaking, or refreshing campaigns.
It’s easy to figure out: divide the number of conversions by the number of leads and multiply by 100.
Examples of conversion include subscribing to a newsletter, registering for a webinar, or downloading a whitepaper.
Recommended Article: A Guide to Write Conversion-Boosting Content for Marketing
Customer Acquisition Cost
Your cost per acquisition (CPA) is the amount you pay to acquire a customer. Leads and customers are different.
When someone buys something from you, they have yet to become a customer. They become a customer further down your sales funnel. When you buy something, a lead turns into a customer.
Therefore, your CPA expenses include sales visits, advertising, and anything else required to convert a website visitor into a paying customer.
You have yet to add to your bottom line if you’ve spent a lot of money and only converted three or four leads into customers. Consequently, your CPA provides a comprehensive view of the success of your entire campaign.
Quality Score
Google helps us develop a quality score based on how good the content is and how relevant it is to the target audience-. The CPC, CPM, etc., decrease our investment as the quality score increases.
Organizations also monitor the quality score because it impacts brand equity. Digital advertising increases traffic, customer engagement, and revenue with minimal expenditure.
Typically, brands are aware of market dynamics and thoroughly comprehend their target consumers. Combining this with a comprehensive understanding of the digital advertising landscape can help them maximize the effectiveness of their communication efforts.
Return on Investment
Return on investment (ROI) or return on cost is the ratio of net income to investment. A high ROI indicates that the investment’s returns exceed its expenses.
ROI is used as a performance metric to evaluate the effectiveness of an investment or to compare the effectiveness of multiple investments.
Unlike traditional media channels such as newspapers or television, it is much simpler to calculate a digital ad’s return on investment (ROI). We can see the effectiveness of our advertising campaigns in near real-time using Google Analytics and other third-party tools.
Minute-by-minute, the investments made, the number of people landing on our page, and the actions taken are transparently visible. These outcomes are directly attributable to clearly defined expenditures.
Source Tracking
Which channel is most effective for your product and intended audience? People may encounter the advertisement on multiple pages before landing on the landing page. To determine where you should direct your attention, you must understand the origin of each customer journey. This will help us determine which websites or types of content are best suited for our advertisements. This provides a deeper understanding of our customers’ collective consciousness.
Final Thoughts
Every marketer desires a successful digital marketing campaign. And if it’s not, they want to know what went wrong to run tests and enhance their performance.
These metrics may appear to be numerous, but they are much simpler to track than the overall financial health of your digital agency or consulting firm.
Moreover, these are key metrics that pinpoint key business areas. These metrics will guide your decision-making and help you achieve your business objectives if you pay close attention to them.
Selecting the appropriate digital marketing metrics to measure the success of your campaign is a step in the right direction.
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