Digital marketing plans usually hover around making the right kind of content and reaching out to the right audiences through their frequently used platforms. That is all good, but the main focus of any plan must be on the returns you can get from the investment i.e. your ROI.
What Is Digital ROI?
All your marketing activity has certain costs attached to it and you make provisions for it in your budget. This could also include the cost of hiring a digital marketing agency in India. When you do so, you expect some returns for every rupee that you have invested. To understand whether you are getting that return, you need to keep track of the business generation that has happened through your marketing efforts. Without this assessment, you will have no idea where your marketing plans are headed.
How to Measure Digital ROI?
It is easy to understand when you talk about conversion as a goal. In this case, you can put a monetary value on your expenditure and your income. But, when your goal is brand building or to get customers to enter the marketing funnel, how do you measure your ROI? This can be measured through the immense volume of data available on Google Analytics. The following measurements can help you evaluate the returns.
This is the most common tool to measure your ROI, especially when the goal is conversion. You can know the total number of unique visitors and the total number of desired actions taken. This makes it easy to calculate the conversion rate.
Cost Per Lead
If you have set lead generation, which is very important in a B2B environment, as your marketing goal, then you will need to measure the investment you had to put in behind every lead that you got. This can be calculated by dividing your total investment of that particular campaign by the total number of leads generated through it. If the cost of producing a lead is higher than the revenue that you can generate from them, the ROI is negative.
Lead Close Rate
Evaluating how many of these leads are converted into deals is worth measuring too. This gives you a better idea of the effectiveness of your campaign as you can put an actual figure of business generation in place and compare it against your investment. Use the results from each campaign as a benchmark to understand what works better. These could also vary by the effectiveness of your sales team, so do keep that factor in mind when evaluating the campaign on this metric.
Cost Per Acquisition
This measures how much a new customer cost you. This can be easily calculated by dividing the total cost of a marketing campaign by the number of sales generated through it. The return is positive when the value of business generated through these customers is greater than the expenditure incurred to acquire them as customers.
Average Order Value
This is evaluated by dividing the value of all orders received by the number of orders received. Even if you do not have too many orders, if the ones that you get give you good value as revenue, it can be considered as good returns. A small percentage of growth in this metric could mean high growth in total revenue.
Customer Lifetime Value
This is utilized when you calculate the monetary value of an average customer. This should be compared against the initial cost of acquiring the customer. A healthy long-term profit justifies a high acquisition cost.
Digital Marketing Channels and Their Measuring Tools
When you use a certain channel for digital marketing, you need to keep track of certain measures for each of them. These are:
E-mail Marketing – Open rate, bounce rate, click-through rate, un-subscription rate, conversion rate, lead rate
Social Media – CTR, followers added, leads acquired, conversions
Landing Pages and Blogs – Traffic, total page views, unique, new, returning visitors, time spent, action taken, conversions
Ways to Improve ROI
If you want to improve your ROI, you can undertake the following:
Define Your Goals at the Outset
The returns cannot be measured when you don’t have a goal.
Use Relevant KPIs
Each goal has to be measured differently and you must use the right KPI.
Measure for Different Channels and Platforms Individually
This is important to know which of your marketing channels are effective and which need attention. The effective channels could be utilised for better returns with a larger investment.
Improve UX and Buying Opportunities
This can help in increasing average order value if you showcase your product well with up-selling and cross-selling opportunities.
Hire the Services of Experts
If you are looking for digital marketing services in India, Techmagnate is a great choice as they offer a wide spectrum of services in digital marketing.
Your digital marketing agency in India should be one that is capable of planning your marketing campaign and tracking the results of the same. The regular reports provided by them can make your work easier.