Any digital marketing campaign should be treated as an investment, and the best way to tie it to your business performance is with ROI (Return on Investment.) gital marketers can track each action they take, as well as the results they produce. However, it is not as easy as it sounds, because there are so Dimany variables attributed to digital marketing results.
- Cost Per Lead
Whether your digital marketing efforts are profitable or not, you can get a general sense by tracking cost per lead (it’s usually associated with paid advertisements.) Cost Per Lead is calculated in Google AdWords or other advertising platform and is also called Cost Per Conversion. Make sure that you’re not over or undercounting, by checking that your conversions align with your definition of a lead. What you’re paying for is to generate leads.
- Customer Lifetime Value (LTV)
This metric applies to every business out there, and it’s important to track it because it gives you an estimate of how much you can afford to spend on ads to profitably acquire each customer. Many industries, including the New Home Builder industry, need to come up with historical customer data or a projection to predict what their LTV might be (unlike E-commerce, where you can get an exact LTV calculation.
- Return on Ad Spend (ROAS)
If you’re able to tie revenue directly your digital marketing efforts, then ROAS is a useful metric for your business. ROAS focuses on revenue instead of profit, and it factors in your ad spend and no other costs. For example, you spend $100 on digital ads and get $300 in revenue. However, your product costs $100 to make, so your ROAS is 300%, but your ROI is only 50%. To know what ROAS percentage you’re profitable at, you need to understand your profit margin.
- Cost Per Acquisition/Cost (CPA, CAC)
What CPA tells you is what you’re paying to acquire a customer (not a lead.) You can get real-time insights for paid campaigns but still doesn’t apply directly to SEO efforts. To see your real CPA, you will need to blend your lead sources. You can calculate it by dividing your total digital marketing spend, by your number of acquired customers.
- Unique Monthly Visitors
How many people are visiting your site on a monthly basis? This metric tells you. However, if you don’t dig deeper, it can be very extensive, and you can’t know how valuable it may or may not be. Segment your website traffic by source (social, organic, paid, etc.) to get more specific and look at their metrics. You can track it directly in Google Analytics, so there’s no need for calculations.
- Conversion Rates by Channel
Where is your traffic coming from? You need to know how much of it comes through social media, paid, or organic sources. This metric tells you where your marketing efforts produce the most interest and where most of your customers are.
Calculating your digital marketing ROI can be challenging unless you’re a strictly E-commerce site. But with this challenge in mind, we present you with these six metrics that can help you calculate ROI and track money spent on digital marketing to actual customer acquisition.
BP Digital has a builder-centric process in place that lets you track your digital marketing dollars through quantifiable results. Our New Home Builder Digital Marketing experts, conduct a diagnostic evaluation, explore the findings together with our clients, and help them connect new digital marketing opportunities to your business goals. With BP digital, we do the heavy lifting. You will know your ROI!
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