KPIs or Key Performance Indicators allow digital marketing companies (or any other business for that matter) to check their growth. If you’re running your own digital marketing startup and you want it to come out on top, then you need to religiously check your company’s KPIs.
Now with thousands of KPIs at play, you might be wondering which one to prioritize? Good thing you’re here then! Below is a list of the top KPIs every digital marketing agency must check. Let’s dive in!
Top 7 Most Important KPIs Every Digital Marketing Company Must Check
1. Lead Sources
Lead source is one of the most important KPIs you should watch out for. After all, you need to know where your sales and profits will come from.
To ensure your digital marketing company’s success, it must rely on more than one lead source. If you only have one lead source, any disruption to it will put your business in jeopardy.
Anyway, the best way to check your lead sources is by creating a chart that shows each of them alongside the sales you made through them. Aside from allowing you to check how many lead sources you have, it will also let you know which ones are bringing in more profits.
2. Lead Conversion
Even if you somehow gained a thousand lead sources, none of them would matter if your digital marketing agency can’t convert a single lead into a client. So better check how well your company is doing at lead conversion.
Luckily, you can do this while checking your lead sources. While making the chart, check how many leads have been converted into clients from each source. Take the total number of converted leads, divide it by the total number of leads, then multiply the answer by 100. This will give you your lead conversion percentage.
3. Average Cost Per Lead
You should also check how much it costs to convert a lead. If you’re paying money to convert leads and it’s not working, then your digital marketing company is wasting capital. Better stop your current sales strategy and invest that money in a better one.
Now while checking this KPI, it’s important to note that the average cost per lead varies depending on what industry your client is in. You need to know the lead conversion price for each sector if you want to accurately gauge how much your company needs to spend.
Anyway, to check your company’s average cost per lead, calculate how much you’ve spent on your sales strategy, then divide it by the number of conversions. For example, if you spent $100,000 to gain 1000 sales, then your average cost per lead is $100. In short, it takes $100 for you to convert a lead into a customer.
4. Cost Per Acquisition
At the same time, you need to find out how much your client is spending to gain the leads you converted. To that end, you need to monitor your digital marketing agency’s cost per acquisition.
This KPI focuses more on your client’s expenditures, notably on their marketing strategy. To get it, you simply have to divide the total amount you invested to gain new customers by the number of new customers.So basically, if you’ve dished out $100,000 to gain 1000 new customers, then it takes you $100 just to gain a new one. That means your clients need to pay you at least $100 just to gain a new customer.
To gain more clients and ensure your agency’s growth, your digital marketing company must offer reasonable cost per acquisition rates. To do that, you need to be able to convert leads into customers using as little money as possible.
4. Return of Investment
Aside from leads, you must also monitor your digital marketing agency’s ROI or return of investment. In particular, you need to monitor your company’s SEO expenses.
Aside from helping you measure your agency’s profitability, ROIs allow you to monitor its growth and bring to light the areas you need to improve on. Now while checking this KPI, you should know that calculating ROIs vary depending on what kind of website you’re running. Additionally, you need to know how to use Google Analytics if you want to accurately gauge your digital marketing business’ ROI.
In any case, to calculate your ROI, simply set up a conversion tracking system. Then take your total SEO expenditures for one month, subtract it from the revenue you’ve made during the same month, and multiply the result by 100. The answer will be your ROI percentage.
5. Inbound Link Building
Inbound links help your digital marketing business’ website (and your clients’) gain more traffic, potentially increasing your sales in the process. The more inbound links you gain, the better off you’ll be. So best get as many quality backlinks as you can.
To that end, there are many tools available to help you find and screen potential traffic-driving inbound links. While some of them need to be bought, most can be acquired free of charge. It all comes down to you choosing the most suitable tools for your digital marketing agency.
However, the best way to acquire great backlinks is by crafting fun and interesting guest post content for other websites. Just make sure the sites you’re reaching out to have high specs. Check their traffic, domain rating, and the quality of the websites linking to them.
6. Social Media Engagement
Lastly, you need to check your digital marketing company’s social media engagement. This KPI is especially important because the majority of your target audience spend their time lounging in their social media handles.
Thankfully, measuring your company’s social media engagement is pretty easy. First, select a period you want to make a report on. Then find how many likes, shares, and comments you gained during this period.
Divide this number by the number of followers you have, multiply it by 100, and you have your social media engagement percentage. This step can be used on major social media platforms, including Facebook, Twitter, and Instagram.
If you want your digital marketing agency to rise to new heights, then you need to make sure every part of it performs optimally. By regularly checking these and other KPIs, you can guarantee your company’s success.