In this new era of the internet, a lot of marketers are at a loss when it comes to tracking their campaign performance. This can be attributed to the lack of experience and skill in using advanced web tools to measure their Key Performance Indicators (KPIs).
Worse yet, if care is not taken, you’ll end up tracking data that isn’t even relevant to your overall marketing strategy and goals. As digital marketing becomes more mainstream, there are now more resources available for marketers who want to track their campaign success.
After working with hundreds of clients over the years, we’ve discovered 5 of the most important KPIs that have driven a lot of results for our clients.
Even though there are many KPIs to measure, focusing on these 5 metrics and making them influence your marketing decisions would make a huge impact on your business.
They have proven successful time and time again. But for the sake of those who are new business owners, let’s go over what we mean by KPIs.
What are KPIs in Digital Marketing?
As the name suggests, KPIs are key performance indicators. They’re metrics that measure how well your marketing efforts are doing, and are used to evaluate the success of your digital marketing campaigns.
Using KPIs allows you to understand how content is performing, as well as track the success of your digital marketing efforts overall.
Here’s an example. Suppose you have a blog post about a specific topic and it gets 100 shares on social media, but only three people clicked through from there to an e-commerce landing page and made a purchase from your website.
From this scenario, we can conclude that the post wasn’t so bad, because at least it was shared. However, the number of sales generated tells us that we have to do something about that post because it’s not reaching our sales goals.
That’s what we mean by measuring KPIs. This brings to the reasons why you need to measure the metrics.
Why You Should Measure Your KPIs
As we mentioned earlier, KPIs are used to measure the success of your digital marketing efforts. They’re key performance indicators that allow you to gauge whether or not what you’re doing is working.
Here are at least five reasons why you need KPIs;
- KPIs are like scorecards for the overall health of your business. They help you find key areas that need improvements or where you need to concentrate your efforts and resources.
- They also help you know if you’re getting close to the goals you set for your business. For instance, if your goal for a period was to get signups, KPIs would help you know how far you’ve gone with your goal attainment.
- Based on the metrics, you’ll be able to make several adjustments in your marketing strategy to propel your business forward
- It also helps you find loopholes and other problems in your marketing efforts so that you can solve them before they get out of hand.
- KPIs can help you find marketing trends and hence make informed decisions for your upcoming campaigns.
If your KPIs are up, then it means that all is well and good with your campaign. But what if they go down? Then it’s time to change things up!
To measure KPIs, you need to use software, tools, and probably plugins to get the data.
Tools to Measure KPIs
We now know why have to measure KPIs. Let’s see what tools you can use to gather the data. The most popular ones are;
- Google Analytics
- Good Data
These are just a handful of the software you can use to put your finger on your marketing pulse. Apart from these, there are analytical programs that you can use to measure your social media engagements.
Facebook Analytics, Twitter Analytics, Bing Webmaster Tools, and Youtube analytics, are great examples. It’s also possible to use Hootsuite to monitor your social media accounts in one place, instead of relying on multiple platforms individually.
With the KPI software, you can measure these key important metrics;
- Cost per lead
- Conversion rate
We’ll explain each of these terms one at a time. Let’s begin with the “reach”.
Reach is the number of people who saw your content since it went live. It’s also known as impressions. To be sure about the success of your digital marketing campaign, you need to pay attention to this key metric. After all, what’s the point in spending money to create content if people can’t even see what you’ve worked hard to produce.
Having close to accurate data on how many people have seen your content would help you know what you can do to improve upon it.
For instance, if the reach or impressions are relatively low for a particular post, you can decide to run ads for that post, or probably reach out to an influencer who has more followers to promote that piece.
To calculate reach, you need to know three things:
- How many people have seen your ad/content?
- What is the total number of potential viewers? (i.e., how many people are there in the market?)
- How often did they see it?
You need to find the reach for your social media, paid ads, and organic website traffic.
Some platforms are better than others at this. For example, Facebook has more accurate measurement tools than Twitter or LinkedIn.
Reach can also be calculated by adding up different types of impressions over time (for example, the total number of likes/comments on social media posts).
This way you’ll get an average impression rate per post so that you can compare how well different types of posts perform.
Engagement is another important KPI that you can measure in your digital marketing campaign. It is a measure of how engaged your target audience is with your brand, products, and services.
How are people engaging with your brand? Are they liking and sharing your content? Where are they talking about your brand, and what are they saying? Are they leaving reviews?
It’s important because customers who are more engaged with a particular brand will be more likely to buy from them.
A higher level of engagement also results in better customer loyalty, which means they are less likely to switch brands and more likely to recommend the brand to their friends or colleagues.
There are two ways you can measure engagement: content engagement (i.e., likes, comments) and site interaction.
Additionally, if you want an overall picture of how well your content performed on social media platforms such as Facebook or Twitter, then there are other metrics available such as mentions (a number indicating how many times someone has referenced your company name) or reach (a number indicating how many people have seen something related to your company).
High engagement rate signals that there is a high awareness of your brand. It’ll also encourage you to continue doing what’s generating these results.
The impact is the visible change that your marketing efforts are having on your business. It’s the measure of your efforts and their effect on your business. Did you get more contacts on your list? Did you get new customers after the campaign? Did your social followers increase?
Finding the impact rate i’s like performing a before and after analysis.
To calculate impact, you need to compare a number or metric from before the campaign started with one after it. This can include the difference between two different campaigns’ results or the difference between what was predicted and what actually happened with each campaign.
Here are some examples:
Comparing revenue generated by an email campaign with revenue generated by a direct mail campaign shows how much more money customers spent as a result of receiving an email than they did by receiving direct mail (impact).
Calculating customer acquisition rates for both digital and print ads show how many new customers were acquired through each channel.
Measuring customer satisfaction rates before vs. after running an ad campaign gives information about how satisfied people who saw the ads were before they were shown to them.
Measuring the impact of your campaign helps you as the digital marketer to see if you’re reaching the goals of your campaign. And if the answer is no, the metrics would tell you where to improve.
5. Conversion Rate
The conversion rate of a digital marketing campaign is the percentage of website visitors who take an action on your site.
It’s important to track since it’s a good indicator of how well your efforts are working and how effective they are at driving conversions.
If you have 1,000 visitors that come to your website, but only 100 convert into leads (meaning they fill out a form or make a purchase), then your conversion rate would be 10%. If you had 200 leads from those same 1,000 visitors, then your conversion rate would be 20%.
Conversion rates vary from industry to industry and from company to company (and even from campaign to campaign). For example, if you run an e-commerce store and sell products online with no sales team in place—as Zappos does—then chances are very high that every visitor will buy something when visiting the site. On the other hand, if you’re running ads for an accounting firm, we can’t expect the conversion rate to be the same as the e-commerce store.
If you realize that your conversion rate is low, you and your marketing team would do something we call Conversion Rate Optimization (CRO). If we were doing science, we’ll say we’ll use the scientific method to solve the conversion rate problem.
This kind of conversion rate troubleshooting involves brainstorming ideas on why customers are not converting, and then forming hypotheses on possible solutions. Your team would then test the hypothesis with A/B testing.
As you continuously monitor your conversion rate and do whatever you can to make it better, you’re sure that your digital marketing campaign is headed in the right direction.
Having the right KPI metrics makes it easier to measure the success of your digital marketing campaigns.
If your digital marketing campaign is a success, you’re going to want to know. And the only way you can know if it’s working is by measuring key performance indicators (KPIs) and seeing how they stack up against the goals of your campaign.
The right KPIs allow you to measure the success of your digital marketing campaigns. These metrics are important because they help show whether or not customers are converting on the actions that matter and taking action on other parts of your website as well.
As the saying goes, two heads are better than one. Therefore, don’t hesitate to contact us to help you with measuring the most relevant metrics. Not only would we help you measure the data, but we’ll also help you make sense of what the analytics say.