Key Performance Indicators
Internet Data Analysis for Business
DMKT305-1901A-01
Key Performance Indicators for Digital Marketing
Key performance indicators are those measurable values that can be used as an accurate representation of how a company is performing in terms of meeting its set business objectives. It is thus, essentially a useful mechanism/tool for evaluating the level of success in achieving a given desired objective by an organization (Klipfolio, 2019). There are several metrics that can be used as key performance indicators in trying to evaluate organizational performance. The following table illustrates the various key performance indicators as applied to an integrated digital marketing drive.
Goal KPI Measurement Explanation Formula
Increase sales by 20 percent
Incremental online conversion rate. Online conversion rate, in this case, refers to the ratio of leads generated by digital marketing platforms that are actually converted into actual sales.
This will involve focusing on how the firm’s customers use the company’s web site, and also specific product pages. It will also involve, reviewing landing pages and interaction viewing advertisements. From this information we can make adjustments that will enhance the number of leads to convert them into online sales.
Conversion rate = Total number of sales / Number of leads * 100
Evaluate the financial viability of integrated digital marketing platforms
The projected rate of return
The projected rate of return is an estimation of the averages of all the expected returns from a given investment. The projected rate of return = (Total sum of expected revenues * their probability) / number of expected outcomes.
Evaluate the financial viability of integrated digital marketing platforms
Break-even point Break-even point is an estimation of when a given investment will ultimately be able to balance the costs of production with the revenues and thus obtaining a net margin of zero instead of a loss. It is expected that new ventures start by earning negative revenue and then they break even after which they are expected to generate profit
Break-even point- total revenues-Total costs =zero.
Increase email marketing performance by 10 percent
Email Marketing engagement scores This KPI measures how interactive the marketers are with their potential leads. It is expected that the more the engagement the higher the brand awareness and consequently the potential for generating new sales leads
Email Marketing engagement scores = number of lead generated / the number of email contacts
Increase email marketing performance by 10 percent
Email Forwards This KPI is a measure of the likeability and appropriateness of the contents of the marketing emails. A potential client would only forward those emails they like and thus writing a UK dissertation assignment pro papers masters thesis writing – creating a wider brand reach.
Email Forwards= total number of emails forwarded.
Increase email marketing performance by 10 percent
Email subscribers versus unsubscribes metrics This KPI is a measure of the likeability and appropriateness of the contents of the marketing emails. If the content of the emails is not relevant or appealing to the potential client then they would most likely unsubscribe from the company’s mailing lists.
Email subscribers versus unsubscribes metrics= number of email subscriptions/ number of unsubsriptions.
Increase brand awareness Followers growth in social media platforms This metric measures the number of new followers and compares them against the desired goal.
Followers growth= new followers/ total number of previous followers *100
Reduce online marketing costs by 10 percent Customer Acquisition Cost Customer acquisition cost is a measure of the total cost of acquiring a new customer.
CAC= Total costs incurred in securing a new customer.
Increase brand awareness and increase leads by 15 percent Social Media Engagement This key performance indicates how much the marketing team interacts with the fans of the organization and their products.
Social Media Engagements= Comments+ Shares + Likes + Reach + Clicks
Reduce online marketing costs by 10 percent Lifetime value: customer acquisition cost
(LTV: CAC) This metric is very important since it offers valuable insights into the efficiency of spending decisions in marketing by comparing the cost of acquiring a new customer against their lifetime value. Based on this metric the management can make the necessary cost-cutting measures while ensuring that the marketing drive remains efficient
(LTV: CAC) = Gross Margin % X (1 / Monthly Churn) X Average Monthly Subscription Revenue per Customer: Sales and Marketing Costs / New Customers Won
Reference
Klipfolio. (2019). KPI Examples. Retrieved January 16, 2019, from https://www.klipfolio.com/resources/kpi-examples
