Running a business can be a bit tedious and time-consuming. However, seeing the fruits of your labor is extremely satisfying, especially when you see your return on investment grow exponentially.
It is important to measure your ROI every once in a while so you’d know where your business stands. This will give you an idea of whether your digital marketing campaigns are working or not. It will also help you continue on with the ones that are effective and tweak the ones that are not getting too much attention from your target market.
Furthermore, you definitely would want to know whether your digital marketing campaigns are working or not simply because you are spending a good penny on these campaigns.
Here are a few tips that you can try to ensure that you will get the most ROI from your digital marketing campaigns.
Work On Your KPIs
Key performance indicators or KPIs for short are used to measure the progress of certain goals. They help you know if your ad campaign is working and is effective. KPIs need to be specific so you know whether you were able to achieve your goals or not.
KPIs have to be specific – no more than 5 to 8 indicators- and they must be targeted. They also have to be measurable, as numbers are key to knowing if you are getting a return on your investment.
You would want to make sure that your KPIs are concise. Avoid being vague, as this would only be a waste of everyone’s time. Not only are KPIs placed to track your campaign’s goals, but they are also used to manage everyone’s expectations.
This is why it is important to discuss the KPIs with the whole marketing team first before you apply it to your new techniques.
Digital marketing trends change over time, which is why you and your team should never stop looking for new techniques and innovations. A few might work for one specific project, but that might not be the case for your future advertisements. Also, not all digital marketing campaigns are the same.
Keep all of your data relevant by doing proper research before starting a live campaign. Make sure to analyze each one with your team so you’d know how to use the data to your advantage. Also, remember that it’s okay to experiment with the new data that you gather each time. Keep a close eye on your results so you’d know which ones you can use in the future and which ones you should avoid.
Small factors such as targeting the right age group, knowing which device/s they are using, on what channel/s they are viewing your ads, and knowing what time or day of the week you get the most views are imperative to reaching your new goals and return on investment.
Know What Your Goals Are
This one might sound like a no-brainer, but we are including it here anyway since it is a vital part of getting the most ROI out of your digital marketing campaigns. You definitely need to be aware of each goal that you are setting so you’d know how to measure it afterward. Just like what we have said earlier, setting goals for your KPIs is important so you’d know if your ads are effective.
For example, if you are looking to gain new customers, then consider being pretty specific with it by indicating how many percentages you want to increase it by. Instead of saying “Increase Customer Acquisition Rate”, you can instead say that you want to “Increase Customer Acquisition Rate by 20%”. Additionally, you can also indicate the time frame in which you are looking to achieve your goal.
Your metrics should be measurable, as this would make it easier for you to track your progress and see which goals are being met and which ones are not.
Social Media Numbers Can Sometimes Be Irrelevant
You might think that getting tons of likes, shares, and comments on your social media ads will automatically increase your return on investment, but unfortunately, this one’s not just true. Your Facebook likes and shares have no direct effect on your revenue. However, it can improve your brand’s reputation, as well as your Google ranking.
What you truly should be paying attention to is your sales. Are your customers and viewers buying your products and services? Are they visiting your website and other pages? If you are seeing an increase in your sales through your ads, then this is when you can say that you are getting your return on investment through your digital campaigns.
Get the Right Tools (and People)
There are hundreds of marketing automation tools in the market today to help you measure your company’s ROI. These tools make it easier to see which ones of your digital marketing campaigns are effective and which ones are not. Some of these apps and tools include Google Analytics, HootSuite, Buzzsumo, Mixpanel, and a whole lot more.
However, sometimes, you just cannot be satisfied by leaving it all to these tools or apps. If you want to make sure that you are getting your ROI, then you might want to hire people who are willing to take a look at your numbers. You can either hire in-house marketing people or get a third-party company to help you with it.
But how exactly do you measure your digital marketing ROI? We’ve compiled a couple of tips below:
Compute the Cost per Lead
If you are looking to collect new leads and gain new customers, then you might want to consider knowing how much you are spending for each lead. Some social media platforms such as Facebook and Instagram have a feature that automatically calculates your cost per lead for each ad so you’d know if you are spending your money on the right audience.
However, if you want to do it without the help from social media, then consider dividing your total spend on the ad with the total number of leads that the campaign has garnered. If the cost per lead is greater than closing your leads, then you can consider this particular campaign successful.
Take a Look at Your Customer Lifetime Value
Loyal and repeat customers will definitely help you get your return on investment, which is why it is important to pay attention to the numbers that are attributed to them. If you really want to pay attention to your ROI, then consider what an average customer will spend on your products and services over the course of their whole lifetime.
Let’s take a closer look at this. Let’s say that you just spent $20 to acquire a new customer. After this, the customer then goes on to spend $20 buying your products or services. Now, this might not seem like getting your return on investment, but if they proceed to spend $20 every single month buying your products and services, then you are already getting your ROI a couple of times back. This is the main reason why it is so important to take a look at your customer’s lifetime value.
Keeping Your Conversion Rates in Check
This one’s by far the most used and popular way to track your ROI. If your main goal is to convert your leads to sales, then focusing on the conversion metrics will help you see if you are accomplishing your goals.
When it comes to checking conversion rates, check which channels and devices are converting the best. Once you know where the ads are performing well, you can focus on running multiple digital marketing campaigns to get the most return on investment.
Overall, keeping track of your conversion rates will help you realize what you are doing right when it comes to running your digital marketing campaigns.
Remember: experimenting with different techniques is a must, especially if you are just starting. Know which ones work well so you can apply them to your future ads and campaigns. Be specific, learn to adjust, and be mindful of your techniques and you’ll get your ROI in no time!
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Nice idea, and thanks for sharing