Measuring your digital marketing is a must
This article walks you through how to choose the right digital marketing metrics for your business.
To get the most out of your digital marketing efforts, measurement is a must. And as online research and shopping become a customer preference, it’s even more important. The right digital marketing metrics will help you identify opportunity areas for your business, ensure your marketing investment generates a positive return and help you minimize risk.
It can be intimidating if you’re new to digital marketing metrics and data, but don’t let this deter you. In this article, we’re breaking down a tried-and-true approach to get you started and help you consistently measure and optimize your marketing efforts. Make sure you make it to the bottom, as we include a FREE GUIDE that will tell you what THREE metrics to measure to grow your business!
SMART marketing goals
Goals determine desirable customer actions. Desirable customer actions determine KPIs.
As always, we start with the business goals. Goals should follow the SMART formula – Specific, Measurable, Achievable, Relevant, and Time Bound.
What are we trying to achieve with our marketing? Frame this in terms of business goals and how they impact the bottom line. Typically, it boils down to three areas: new customer acquisition, existing customer revenue growth, or churn reduction. For more information on goals, budgets and tactics, check out this article.
Since new customer acquisition is a very common goal, we’ll focus on this example. And to make it SMART, it could be: “Drive 10% more new customers in the next quarter.”
Next, we need to think about how these goals map to KPIs. To do so, consider the customer journey. How do customers move through each phase of the marketing funnel, and what actions do they need to take to move from Awareness to Consideration to Conversion? These actions become your goals, which then translate into your digital marketing metrics, and each phase of the customer journey will typically have its own metrics.
Let’s look at an example of marketing objectives and how they map to digital marketing metrics
If you own a coaching business, and your goal is to get an online lead submission for a quote, your customer journey might look like this:
Sample KPIs for an online lifestyle/business coach.
Dimensions are the key to generating marketing insights
Always aim to understand the “why” behind your digital marketing data
Once we have our KPIs, we need to identify the best way to slice and dice the data… we call these our Dimensions, and they add color to our analysis. We use Dimensions to determine the performance drivers and uncover the “why” behind the data. Dimensions include customer segment, geography, product, device type, ad creative version, product price range, etc.
In some cases, performance overall may look as expected. However, one dimension may be over-performing or under-performing and skewing the results. By looking at the data across a few key Dimensions, we can identify what is driving the performance, and subsequently, we uncover optimization opportunities.
How do we analyze marketing data to understand performance?
In going back to our coaching example, let’s say we have two ads in market with the below messaging:
Ad #1: Change your life as soon as tomorrow
Ad #2: Build your dream business
We look at the overall Lead Conversion Rate (lead form submissions divided by visits) and see below the benchmark. This would prompt us to take a few actions:
1. First, we would look at Lead Conversion Rate by our selected Dimensions. As we drill down by Ad Creative Version, we see that Ad #1 is driving the bulk of the Leads and at a much higher Lead Conversion Rate. We can conclude that the audience we are targeting is interested in making a lifestyle change as soon as possible. Since this ad set is performing best, we may want to allocate some additional spend to generate more Leads.
2. We also want to understand why Ad #2 isn’t performing. Let’s say we see a strong CTR, so we can conclude that the ad successfully grabs the user’s attention. However, the Bounce Rate is quite high. This tells us that perhaps the landing page does not live up to the “business of your dreams” message portrayed in the ad. Now that we know this, we can either test some new messaging, imagery, or testimonials on the site, or tweak the ad creative and messaging to align with our existing service offering.
This is how to determine your business’ KPIs
The guide below is a holistic view of the common digital marketing metrics for a simple Awareness –> Consideration –> Conversion marketing funnel. Choose the metrics that make the most sense for your business, marketing strategy, and website.