In order to effectively measure how a digital marketing strategy is performing, it is important to know about which metrics to consider. Key performance indicators (KPIs) are used in every business environment, but change depending on what needs to be measured. Each measure can be qualitative (categorical) or quantitative (numerical). Keeping track of KPIs ensures that each decision can be made based on data, not gut feeling.
Key Performance Indicators for Virtual Marketing and Sales
1. Traffic Sources
By viewing traffic sources, you can measure the quantity of visits from each source; whether it is social media, search engines, or email marketing. When one source naturally outperforms the others, it can be a chance to maximize on the newly discovered opportunity.
2. Organic Search Traffic
Gaining traffic from organic search results can help save money on advertising. It is important to note how many visitors are coming because of organic search results, and what they searched to end up on your site. Once this metric is noted, measure the number of people that made it to the goal page.
3. Return on Investment (ROI)
ROI compares the amount of money invested in a campaign to the return that was generated. The formula to calculate ROI is as follows:
ROI = ((Total Revenue – Total Cost)(Total Cost))100
A high ROI is a concrete indicator of a successful campaign, and a negative ROI indicates that the campaign costed more than what it returned.
4. Sales Revenue
This metric is similar to ROI, but is expressed differently. It is calculated by subtracting marketing expenses from total amount of money spent on the campaign. Much like ROI, a higher number is preferable, and a negative number indicates an unsuccessful campaign.
5. Cost Per Lead
Cost per lead can be generated by comparing the total amount of cash spent on a marketing campaign to the number of leads that were acquired through the corresponding avenues. Although it can be useful to focus only on quantity of new leads, it is important to consider the lifetime value that each new lead carries.
6. Customer Lifetime Value
This metric is calculated by multiplying duration that customer is retained, average number of purchases per period, and average sale value per purchase. When this metric is used in combination with cost per lead, it can reveal the true value of customer acquisition and the importance of long term customer retention.
7. Email Marketing Engagement
This metric can be broken down into three smaller indicators: subscribers, open rate, and click rate. Number of subscribers represents the total number of people who are still signed up on your email list. Open rate represents the number of people who open the email. Click rate indicates the total number of people who clicked on any call to action within the email. Each of these metrics are significant, but should only be considered in comparison to each other.
8. Social Media Interactions
A social media interaction is considered any contact with others on a social media platform. This metric includes number of likes, followers, reposts, and messages. A high volume of social interactions can help develop goodwill, insight into the external environment, and boost organic search volume.
9. Social Media Reach
This metric measures the number of leads, customers, and visitors obtained from social media interactions.
10. End Action Rate
This rate measures the number of people who made it to the goal page as a result of the marketing campaign. The “end action” can be set as any page, whether it’s post check-out, or a form that was filled out.
11. Interpret Your KPIs Effectively
In data analytics, information can be sorted into four categories: descriptive, diagnostic, predictive, and prescriptive. These categories can be seen with their descriptions in the graph below.
When evaluating your own KPIs, make sure that they are being applied correctly. Each KPI should be tracked over time in order to optimize campaign performance and make more accurate forecasts of the future.