When companies create a marketing plan to organize the most important actions to develop within the value chain of their campaigns, they outline clear objectives with the purpose of guiding their operations and evaluating in a given time, whether they were met or not. those objectives. Measurement comes into play in this process, the purpose of which is to know if the promotion of content, product and/or service was as successful as expected.
It is well known that what is not measured cannot be improved, therefore, quantifying results becomes a very important task for companies that need to know the “state of health” of their business model. It is about contrasting the behavior of the market and the receptivity of an audience, before and after implementing a marketing strategy with the aim of analyzing its effectiveness.
KPIs are an important piece in this process since they act as metrics to compare these results. Before knowing which are the main KPIs that you should consider in your digital marketing strategies, we invite you to first know the concept of this term:
What is a KPI and what is it for?
KPI, which stands for Key Performance Indicator, is a measurement unit that is responsible for quantifying the degree of compliance with your objectives. As we have already mentioned, these performance indicators are generally present within the strategic plans of organizations and reflect their profitability over a given time.
KPIs can be used in various areas of a company, such as: marketing, purchasing, sales, customer service, production, etc. They roughly constitute metrics that determine the value of a quantitative variable, such as: income, expenses, number of sales, number of visits, etc. These indicators can provide useful information about your company and reveal opportunities to improve some actions that are not working.
Using KPIs in your digital marketing strategies will give you a much broader picture of the variables that affect your success in practice. Each company must create its key performance indicators and, in turn, the variables that it wants to measure in a personalized way, according to its purposes and the industry in which it operates. However, here are some KPIs that companies mostly use to evaluate the performance of their objectives (economic and scope) to create benchmarking indicators within platforms and digital media with extensive experience:
Cost per click (CPC)
Cost per click is the charge made by digital advertising platforms, such as Google AdWords or Facebook when a user clicks on an ad. In other words, it is a payment method for online ads in which you only pay when the user clicks on an ad or banner.
The cost per click is a KPI because it allows you to determine which digital media are where your ads have the greatest impact, that is, they receive the greatest number of clicks. For example, when you decide to implement native advertising based on a strategy to boost your content marketing, the cost per click is an effective metric to know if that paid advertising receives an optimal number of clicks to make your investment worth it. You can calculate this investment/profit ratio by dividing the total spending of the campaign by the number of clicks obtained.
Cost per interaction
In the process of converting the inbound marketing methodology, companies, through content offers, motivate their readers to perform certain actions. Calls to action, landing pages and forms come into play within this metric, since they are tools that further promote the relationship between the readers of a blog or a social network with the brands that promote that content, converting them into simple visitors to sales opportunities.
There are marketing strategies that do not necessarily meet their objectives by the number of clicks they receive, but what is much more important for them is the actions that Internet users carry out when they see their ads. An objective that can connect perfectly with this KPI is: time on the site, pages viewed per session, number of shares, likes, comments, among others.
The way to calculate this indicator is by dividing the total cost of the campaign by the number of interactions completed. Keep in mind that, although the cost per interaction is usually cheaper than a CPC advertising model, it is more oriented towards generating engagement, so your ROI may be more favorable under this model.
Cost per acquisition (CPA)
The cost per acquisition is an advertising cost that is determined by the action that you consider valuable on your landing page, such as the purchase of a product, the submission of a form, the download of a PDF, the playback of a video, etc. That is, that action that allows you to convert a visitor into a lead within the conversion process, that is, acquiring a new sales opportunity who may be interested in purchasing your products and/or services.
While CPC measures the number of clicks received and cost per action, the number of actions a person took on your website, CPA is much more precise because it actually condenses from all those metrics, the people who actually converted. in a sales opportunity for your company. The cost per acquisition is a much more expensive KPI that will allow you to evaluate the success of your inbound marketing strategies.
When you want to define your objectives based on the cost per acquisition, it is important that you ask yourself: How much will each conversion cost you? How many conversions can you buy? However, to calculate your CPA you must divide the total cost of the campaign by the number of people acquired (leads) or sales.
Return on investment (ROI)
ROI is a formula that allows you to know the economic benefit obtained from an investment made. In other words, ROI allows companies to know their profit margin in relation to the performance of an applied marketing strategy.
ROI represents an important KPI because it allows you to measure the profitability of a business (in terms of investment and income) and in the case of social networks, of a particular content. In digital marketing, ROI takes on a strong role, since if the return on investment generated by some strategies is not known, it would not be possible to correctly evaluate whether they are meeting the stated objectives or not.
To calculate your ROI you must subtract the money you obtained from sales with the amount of the investment and divide that result by the same amount invested. For example, if your company invests $2,000 through advertising on social networks and the profit is $10,000 (that is, that was the profit obtained from the sales generated by that advertising) the ROI would be calculated as follows:
Number of customers acquired via paid ads: 4
Value of each sale: $2,500
Profit: $10,000
Investment: $2,000
ROI = 10,000 – 2,000/ 2000
ROI = 4% (The value of ROI, being the quotient of two related magnitudes between Yes, it is a ratio, which is why it is expressed as a percentage). Based on the example, your ROI would be 4%.
Number of followers, likes and shares obtained
The KPIs that are most related to the field of social media are those that allow you to evaluate the performance of your publications on social networks such as Facebook, Twitter and Instagram. The number of followers is a very important metric because it allows you to see how much your reader communities have grown. At the same time, it is an important indicator to know what the reach of your content has been. The number of likes is another key performance indicator, which, together with your objectives, will serve as a sample of how pleasant your posts are to your followers.
The number of shares or times shared, therefore, measures the impact and influence that your content has to penetrate other audiences. All of them are KPIs applied to marketing strategies that connect with your social networks, who, in the same way, will allow you to know their performance in the short or long term.
Quantity and quality of leads obtained per month
In inbound marketing, a lead refers to a person who, by providing their contact information, automatically becomes a sales opportunity for companies. If the cost per acquisition (CPA) measures the economic effectiveness of a paid campaign, the quantity and quality of leads measures the number of people who, through the aforementioned conversion process, have become sales prospects for your company. That is, what is the number of people who not only clicked but also continued the calls to action and connected with the content offer.
When you publish content in your blog post and add a call to action with a content offer, you are automatically creating a lead capture strategy. To do this, there are also measurement formulas that will allow you to know the effectiveness of your CTA or form on your landing page.
Let’s remember for a second that the inbound marketing sales funnel works as follows: you attract traffic or visits to your online destination (web page, blog post, social network, etc.), convert the visits into prospects and a percentage of These, in turn, may constitute new clients.
In this sense, the more leads you generate, the chances of growing your sales increase. But not only the quantity is important, the quality of those leads also deserves to be measured. You can use different measurement scales (from 1 to 5) for the variables that you consider determine the quality of your leads (lead scoring), among which may be: their socioeconomic level, receptivity by email and via phone calls that they have had, how interested they are in your content offers, how many purchases they are willing to make, etc.
Conversion rate
I already understand the importance of leads for the performance of your marketing strategies, the conversion rate is nothing more than a KPI that tells you how many people converted into sales opportunities have finally become customers of your company. This performance indicator, as you may have deduced, is widely used in the inbound marketing methodology because it really quantifies the final effectiveness of that content used to voluntarily attract people’s attention. In this sense, you can set a goal of a conversion rate of N% to measure that effectiveness, after a certain time has passed.
To calculate this KPI, divide the total number of leads generated by the number of clients obtained from that same base of prospects and multiply it by 100. Now, you can also calculate a visitor-lead conversion rate, that is, calculate what percentage of the visits received on your page became a contact or prospect for your business.
Conclusion
You cannot understand the design of a marketing plan and its intrinsic strategies without establishing key performance indicators. But what’s the point of planning something if you don’t want to know its results? Therefore, KPIs are important elements to establish in each step or strategy that you want to carry out in your company.
Remember that it is not just about having measurement tools, but about really quantifying the success and reach that your actions are having. Around this, you will be able to know which strategy worked above another, on which platform and under what conditions.
