Measuring your digital marketing success

Management thinker Peter F. Drucker is often quoted as saying: "If you can't measure it, you can't improve it." Digital marketing is no different!

A KPI is a measurable value that shows how efficiently a business achieves key business/marketing goals. KPIs can be used at multiple levels to assess success; some should be channel-specific, and others should relate to your overall business goals. It's important to follow metrics that allow you to measure your digital marketing success and create continuous improvement opportunities. For this purpose, you should always measure all your customers' journeys through your marketing funnel stages: Awareness > Consideration > Conversion > Retention > Referral. The marketing funnel identifies the key milestones in a consumer's journey to become a loyal client. You should be "helping" your prospects, leads, and customers to move from one stage to another. Let's look at these stages in more detail, as follows:

• Awareness: At this stage, you're marketing to a broader universe of potential customers to raise their awareness of your business and its products or services.
• Consideration: At the consideration stage, consumers interested in your business and its offerings decide whether or not to buy. They may express interest in signing up to your email list or requesting a white paper. These consumers are classified as leads.
• Conversion: When your customers get to the conversion stage, that means they feel safe about your business and brand, and they're acquiring your products or services.
• Loyalty: At this stage, it's time to increase your retention rate and develop your customers' loyalty. You don't want to waste your prior efforts, so you must not forget your customer. Here, you have the opportunity to transform your one-time buyer into a loyal customer that will always think of your brand when they need products or services such as the ones you sell.
• Advocacy: Your marketing should have this final stage as its goal right from the beginning—if you earn it, you no longer have only customers or clients but real fans who recommend your brand to their friends, family, and followers because they genuinely believe in the quality of your products and services. To reach this stage is to accomplish one of your most important goals: to have the rest of the world know and share how good your brand is.

All performance indicators must be clear, specific, and objective so that there's no room for two different interpretations. Only with a set of relevant KPIs is it possible to analyze the true state of the business, achieve goals, and implement strategies and actions that make a difference in its growth. Don't forget that each business should have a set of adapted and suitable KPIs because every company is different.

These are very common KPIs for an online business:

• Number of visits. This is the first indicator that should be taken into account, mostly because without visits it's guaranteed that there are no orders. How many visits did you have last month? How about last week? And how many visitors did you have 2 weeks ago and 2 months ago? Is the number of visitors increasing, or has there been a breakdown in that number? In order for you to evaluate what does and doesn't work at the online store, you need to know how many people visit it in the first place.
• Number of orders. The number of orders is an essential indicator that can be deepened and divided into a set of more specific indicators (number of orders paid, number of orders placed in the mobile version of the store, number of orders paid by credit card, and so on.) With this information, it's possible to analyze the billing for a certain period of time, as well as the number of orders.
• Conversion rate (number of orders paid / number of visits x 100). The conversion rate shows what percentage of visits actually contributes to the growth of the business. Of 100 people, how many are actually customers? If the conversion rate is 4%, for example, it means that in a group of 100 people, 4 placed an order and made a purchase. These values should be analyzed frequently so that you can have a clear notion of the impact of the implemented modifications.
• Cost of customer acquisition (investment carried out / number of new customers). Different strategies can be chosen to captivate new customers and make the brand known to new people. However, it's important to know whether the amount invested is having the necessary return in terms of achieving the goal. The cost of customer acquisition evaluates the amount invested in the actions performed to convert a person outside the brand into a customer. With the help of this indicator, it's possible to make comparisons between the different strategies and actions implemented and find out which one works best in this aspect.
• Number of views on product pages. Which product pages do customers visit the most? Do they match the best-selling products, or do they match product pages that have never received orders? Knowing this value, as well as the quantity of that same product that was sold, allows you to analyze the conversion rate of each page, and understand whether or not it's being visited by the most suitable customers—those who look exactly for the displayed product.
• Average ticket (billing value / number of orders). This KPI evaluates the average amount spent by customers. It's simple math: just divide the amount invoiced in a certain period of time by the number of orders placed in the same period. Knowing this amount, it will be easier to put into practice some actions to encourage customers to increase the amount spent on each order.
• Number of new customers and number of repeat customers. Are orders always placed by new customers? Is there something in the product and/or service that makes people lose interest in buying? Or, are we talking about a product with a fairly extended average life, and therefore the fact that there are no repeat customers is a good sign? If at some point orders are made only by customers who have already bought at least once, it means that you're not able to attract new customers. This is valuable data that will have an impact on the communication and marketing strategy.
• Abandoned carts rate (number of unfinished orders / total number of orders x 100). An abandoned cart is an order that was left incomplete. For some reason, after adding the product to the cart, the customer decided that they would no longer finish the purchase. Several studies indicate that only 20-25 % of orders are finished, so it's normal that this rate is around 75-80 %. However, some techniques can be put into practice to counteract these values—it's possible to lower the rate of abandoned carts.
• Number of visits through different channels. How do customers get to the store? Through sponsored posts on social networks? Through references in the media? Or, is it through the brand's newsletters, or do they simply search the name of the store in a search engine and choose the first result? By knowing the channels that bring more customers to e-commerce, it will be easier to understand where the audience is, and, of course, act accordingly to capture new customers and retain existing ones.
• Net profit (total invoicing – total costs). This is a clear indicator of the success of a business—there's no point in selling too many products if the invoiced amount is not enough to sustain the brand; in addition to having to cover all the costs of the company, the business has to make a profit. After withdrawing the value of all costs (production, wages, domain, accommodation, water, electricity, internet, shipping...) to the invoiced amount, what is the profit? This is the value that defines whether the online store is billing enough to be sustainable in the long term.

Measuring website performance through web analytics

One of the most common ways to measure and report on your KPIs is through analytics.

Web analytics is all about monitoring and reporting on user data, behavior, and marketing campaign performance over time. With it, you can improve the website and its online experience, better understand your users, make decisions based on data rather than sensitivity, experiment with and measure new ideas, produce reports and recommendations, improve conversions and sales, and analyze and forecast trends.

On your web analytics solution, you should be able to generate reports on the following categories:

User data and behavior

• Geographic data
• Demographic data
• Behavioral data
• Psychographic data
• Technology used

Marketing data

• Channels' performance
• Campaigns' metrics
• Conversion metrics
• E-commerce data
• Benchmarking data

Website-related data

• Speed and performance
• SEO

The process of installation of a web analytics solution is very simple. It usually consists of putting a piece of JavaScript code into all pages of your website.

Data > Reports > Analysis > Decisions > Actions > Value

When you take the data and do a report, you are converting data into information, but when you take all your data and reports and analyze them, your goal is to transform that information into knowledge that you can use to improve your business. You should be measuring your acquisition strategy, your website interactions, your conversion process, and—finally—your visitor value.

Now that you know which digital marketing tactics you have at your disposal and how to measure the success of your digital marketing, we move on to understanding how we can plan our strategy, keeping these tactics in mind.