Research reveals that 89% of top digital marketers use strategic metrics to track their revenue and performance.
As an entrepreneur or marketing expert, you need to always know your numbers. Knowing what works and what isn’t working is important to assess your efforts and analyze your progress.
When you gain insights from your assessment and analysis, you can make informed decisions to move your business forward.
However, with the tons of digital metrics out there, it gets confusing to know the actual metrics to capitalize on when tracking your progress as a business.
This is why, in this article, we selected nine indispensable metrics every entrepreneur should know to track performance successfully.
We will walk you through each metric, explaining what they are and why they are vital to measuring your results as a business.
Let’s begin with a definition of what digital metrics are.
What are Digital Metrics?
Digital metrics are also known as Key Performance Indicators (KPIs). They are values used to identify your performance in specific areas of the digital aspect of your business.
There are various types, and the types of metrics to use are directly based on the digital areas you want to track in your business. However, entrepreneurs are known to use two popular categories of digital metrics.
They include lead generation metrics and demand generation metrics. Let’s compare lead generation vs. demand generation.
Lead generation is how you drive potential customers to your brand, while demand generation is how you drive the awareness and interest of customers to your brand.
Other metrics we will discuss in this article include social and website KPIs. Both KPIs measure your performance on your social channels and website, respectively.
Let’s get right into the different metrics that fall under each of the categories we explained above.
9 Metrics to measure your performance in 2021
Below are the top digital metrics you can employ now to track your brand’s success online.
1. Marketing Qualified Leads (MQLs)
Marketing Qualified Leads (MQLs) is a type of demand generation metrics that consists of people who have actively shown interest in your brand. Although they haven’t bought from you yet, they’ve shown interest in buying.
They do this by performing some actions that indicate they are open to doing business with you. For example, they subscribe to your email list, download materials from your website, or add items to their shopping cart.
When your visitors perform any of these activities, it’s an indicator that they have you in mind but haven’t quite made up their minds yet.
How do you identify MQLs? Check the people who visit your sites often, subscribe to your mails, or drop their contact information.
MQLs are critical metrics because they help you know how well your marketing efforts are working to generate interest in the minds of your audience.
More importantly, you can use the data you’ve gained to follow up these promising leads and convert them to consistent customers.
2. Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is a demand generation metric used to calculate the amount of money you spend to gain a new customer.
This insight enables you to calculate your profit for every customer. It also helps you identify how you can reduce the expenses on each customer to make more profit.
Calculate your customer acquisition cost by dividing the amount you spent to gain more customers by the number of customers you acquired when you spent the money.
For example, if you spent $250 acquiring 25 customers in six months, your CAC is $10.
3. Customer Lifetime Value (CLV)
Customer Lifetime Value is an essential demand generation metric that measures how much a customer will spend on buying your products or subscribing to your services during the period of doing business with you.
This metric is especially required for businesses that offer long-term services. Perhaps, a TV subscription platform, an educational institution.
Through CLV, you can calculate the entire amount of money you will acquire from a customer to make proactive business decisions.
These decisions include how much you should invest in acquiring new customers and how much you should invest in retaining your existing customers, considering the CLV they would bring.
4. Click-Through Rate (CTR)
Click through rate is a lead generation metric that identifies the number of clicks your call-to-action receives.
It helps you measure your content performance because you know what type of content moves your audience and drives them to take action.
Calculate your CTR by dividing the number of clicks you get by the number of people who view your call-to-action buttons on your blogs, emails, websites, or social media. Then, multiply the result you get by 100.
For example, if 1000 people viewed the call-to-action button on your website, and 500 people clicked on the CTA button, your CTR is 50%.
5. Conversion rate
Conversion rate is a lead generation metric that tracks the percentage of people who actually do what you want them to do.
For example, if your sole purpose of running an ad is to get people to sign up for your newsletters, your conversions are the people who do.
Identifying your conversion rate is critical to discover if the marketing efforts you’ve strung together are working. If they aren’t, you can restrategize to make things work.
To calculate your conversion rate, divide the number of conversions you receive at a specific time by the number of people who visit your site. Then, multiply by 100.
So, let’s say the number of people who visited your website last month was 10,000, and the people who did what you wanted them to do on your site (perhaps, people who subscribed to your newsletter) were 1,000; your conversion rate is 10%.
6. Engagement rate
Engagement rate is a social metric you use to measure how well your audience receives your content on social media.
Your engagement is your audience’s interaction (shares, likes, and comments) online. It enables you to figure out the content your audience finds most useful or relatable, so you can make more of them.
To calculate your engagement rate, sum up the number of interactions you receive per post and divide it by the number of impressions the post receives.
7. Brand mentions
Brand mentions are the social metric you use to know the number of times your brand was mentioned across the different social platforms your brand is present on.
They let you know how relevant your brand is online and how often your brand’s name pops up during discussions.
You can measure your brand mentions online with Google Alert or other social tools.
8. Average time on page
Average time on page is a website analytic metric that measures how long your visitors spend on each page on your website.
With this insight, you can know if your visitors are actually staying long enough on your website to perform specific actions, such as reading your blog or clicking the call-to-action buttons.
To find out the average time on a page for your website, calculate the amount of time spent on a page, divide it by the number of page views then, subtract by the number of exits.
9. Bounce rate
Bounce rate is a web analytic metric used to identify the number of people who visit your website and leave without going through other pages on your site.
Ideally, your website is supposed to captivate your visitor and lure them deeper into your website so that they can spend more time and take expected actions.
When you measure your bounce rate, you can know for sure if your website is indeed sticking your visitors to your site or not. So, you can make improvements where you need to.
To calculate your bounce rate, divide the number of one-page visits on your site by the number of entrances.
Importance of using digital metrics to track your performance
Digital metrics help your business in several ways. Here are the top three reasons to start tracking your marketing efforts with digital KPIs.
Digital KPIs help you budget wisely
Metrics give you real data on how much your marketing effort is generating, so you know how much to invest.
For example, by understanding your Cost Acquisition Cost and Customer Lifetime Value, you will know the profit each customer is bringing to your business and how much you should spend to acquire and retain your customers to maximize profit.
They help you measure your efforts
The only way to know if the time and strategies you invest in your business are making a positive impact on your business is by measuring your results.
Digital metrics are effective because they are specific to unique areas of your business. This helps prevent inadequacies and ensures that the data they provide is real and useful.
Through KPIs, you can successfully measure your growth as a business and identify ways to be better.
They help you make smart business decisions
Digital metrics give you the data you need to make excellent decisions for your business. For instance, you can measure your content performance to create more engaging content that inspires action from your audience.
You can also enhance your ROI through improved campaigns decisions and budgeting with the insights you receive.
We have revealed the nine essential digital KPIs every entrepreneur should employ to monitor their marketing strategy online.
They include Marketing Qualified Leads (MQLs), Cost Acquisition Cost (CAC), bounce rate, engagement rate, average time on page, Customer Lifetime Value (CLV), brand mentions, conversion rate, and click-through rate.
Adopt these metrics, and you are bound to track your performance as a business effectively.