Measure Your ROI with the Help of Simplemachine | Digital Marketing

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Measure Your ROI with the Help of Simplemachine | Digital Marketing

Given the current pace of technological revolution, digital marketing is no longer a question. If you want to remain relevant as a business, you must establish and cultivate a strong online presence.

Even more important, however, is measuring your campaign.  And this is where many businesses make a huge mistake. Establishing an online presence isn’t enough. Building a website and creating social media accounts is just half of the work. If you’re to truly benefit from these campaigns, you need to consistently measure and grow your Return on Investment (ROI). Simplemachine can help you with both.

Why Measure?

There are three main reasons small business owners should measure their digital marketing ROI;

  • Measurement is Good for Goal Setting

Measurement is critical to both the establishment and follow-up of goals. When you consistently measure your performance, you can create achievable and relevant goals in line with the current position of your business. The data collected during measurement can also be used to verify whether you’re on track to achieving your goals.

  • Measurement Gives You Insight and Perspective

A key trait of successful business owners is consistent learning. You need to learn all the time, from as many sources as possible. In business, there is no better way to learn than through measurement. As you measure various metrics that contribute to your ROI, you’ll uncover invaluable insight to help you stay ahead of the competition.

  • Have a Stronger Financial Approach

Running a business costs money. To ensure that this money is going to good use, you need to measure your ROI. Collect and analyze data to verify whether the money you allocated to content, AdWords, email marketing, and other campaigns returned a profit. You always need to ensure that every dollar spent counts as the first step to business success.

What To Measure

To determine your digital marketing Return On Investment (ROI), you need to measure five key metrics:

  • Total Traffic

There are four elements of web traffic that you need to measure; the number of unique visitors, number of returning visitors, traffic by sources, and bounce rate (number of visitors who arrive and leave without taking action). At SimpleMachine we recommend that you keep daily, monthly, and yearly records of these metrics.

  • Click-Through Rate (CTR)

Expressed as a percentage, CTR (a term commonly used in Google AdWords and other PPC strategies) refers to the proportion of traffic that reaches your landing page or website of your marketing links and ads. For instance, if 1,000 people come across your ad on Google but only 100 click on the ad to reach your landing page, your CTR is (100/1,000) X 100 = 10%.

  • Conversion Rate

A conversion doesn’t necessarily mean a sale. Instead, it means getting visitors to take a valuable action. For instance, if your campaign is focused on growing your email list, conversion would mean getting a visitor to provide their contact information. Conversion rate is the frequency at which your site visitors take these desired actions.

  • Customer Acquisition Cost (CAC)

Also common as Cost Per Acquisition (CPA), CAC is the average cost of acquiring one customer. Put simply, how much money do you have to spend to acquire a buying customer? For a given period, CAC = Total Marketing Spend/Total Conversions. The lower the CAC value, the better.

  • Customer Lifetime Value

Finally, Customer Lifetime Value (LTV) is the projected net profit attributed to the entire relationship with a customer. How much profit can you expect to make from the customer during the period of your engagement? LTV is calculated as follows; LTV = {(Number of Engaged Years) X (Number of Repeat Purchases) x (Value of a Single Purchases)} – CAC.

Once you have records of the above metrics, calculating your ROI becomes very easy. ROI = (LTV/CAC) X 100. The result is your ROI expressed as a percentage.

How Simplemachine Can Help

Not all SMBs are equipped to measure all these metrics. There are many reasons for this, from lack of time to lack of measuring tools.

Simplemachine can help you keep track of each of these metrics so you can easily calculate your ROI. As part of our Content Management and Google AdWords Management duties, we help businesses keep records of all the mentioned metrics and many other metrics that might be valuable to your campaign

If you choose us for your Content Management and Google AdWords Management needs, we will provide you with the tools to analyze these metrics so you can not only calculate your ROI but also obtain useful insight to propel your campaign to new heights.

Contact Us

Don’t wait any longer. Contact us today to begin using our digital marketing tools to keep track of your campaign for accelerated growth.

 

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