Important Digital Marketing Metrics that you Should Track

Total Visits. 

Your website should be the primary target new or existing customers, but you can also measure total visits to any location relevant to your campaigns, such as landing pages or social channels. Measuring your total number of visits will give you a “big picture” idea of how well your campaign is driving traffic.

Conversion Rate

Whether it’s email subscribers, eBook downloads, or a pure lead generation conversion, every campaign has a goal. Once we understand how many people have visited our page in question we need to determine what percentage of them actually did what we wanted them to do in the first place. If your goal is a white paper download, and you had 1,000 visitors to the page, and 100 of those did what you wanted them to (download an eBook, fill out a form, etc) then your conversion rate for that goal would be 10%

Cost per Conversion (CPC)

Using the previous example, where 100 people out of 1,000 converted and completed your goal, it’s important to understand how much you spent to get those 100 conversions. Let’s say you spent a total of $500 dollars on your campaign. Take the total the amount you spent, divided by the total number of conversions to get the cost per conversion for your campaign.

Cost of Customer Acquisition (CAC)

CAC is an extremely important and versatile metric, which can be applied to both you’re on and offline activities. In the previous example, we looked at conversions, which could be any goal you want to achieve. CAC, however, focus on customers and how much it costs us to acquire them. Let’s say you spent $10,000 dollars on all your marketing initiatives, from social media, and content, to SEM, SEO and Email. All these efforts helped you acquire 100 new customers. To determine CAC, you simply take the total amount spent on all initiatives, divided by the total number of customer acquired by those initiatives. In this example, our CAC would equal to $100, meaning it cost us $100 marketing spend to acquire 1 customer.

Customer Lifetime Value (CLV)

Customer Lifetime Value or CLV for short helps us understand the value of an average customer over their lifetime. There are a number of ways to calculate CLV depending on your business model,  but the simple formula is to take the(Average Order Value – Costs to Acquire a Customer) x (Number of Repeat Sales) x (Average Retention Time) For example, let’s say you’re selling magazine subscriptions for $20 per month, and on average it costs you $15 to acquire a customer, with the average customer subscribing for 3 years. Our CLV formula would look like this ($20 – $15) x (12 Months) x (3 Years) = $180.

Now, compare your Customer Lifetime Value to the Cost of Acquiring a Customer. The ideal ration of CLV o CAC is 3 to 1, and some companies like sales force use 5 to 1. The point is if your CLV to CAC ratio is too low, your business is not sustainable if it’s too high you’re not investing enough in acquiring new customers.

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