How to measure ROI from your digital marketing strategy

Return on investment from digital marketing is the measure of loss or profit that you produce on your digital marketing strategies and campaigns. This is generally based on the total amount of money that you have put in or invested. This measurement shows you whether you are getting a return on the money you have invested in the digital marketing strategies. If you have a return on investment that is positive, then that means that your strategy is bringing in more funds than you are spending on them. Knowing your return on investment from the digital marketing strategy is vital to help you better understand whether you are allocating your marketing budget for incredible results.

Here are some of the ways to measure ROI from your digital marketing strategy:

Conversation rates

This is one of the most popular and efficient ways to measure return on investment or ROI, over time. If the goal of your marketing strategy or campaign is to convert, then the conversation rates will show you how you are accomplishing that objective or goal. This shows the ROI performance of your marketing strategy, where you can allocate more resources and improve your return on investment.

Cost per acquisition

The cost per acquisition is also one of the major ways to measure ROI for your digital marketing strategy. Cost per acquisition shows the average cost of acquiring a new customer. To measure cost per acquisition take your total marketing costs and divide by the generated number of sales. Knowing and understanding how much it would cost to acquire a new sale provides you with a better understanding of the performance of your return on investment. If you are spending more to get a new customer then your digital marketing strategy may have a negative return on investment. If this is the case then you need to revisit your marketing strategies and find ways or techniques to lower your cost per acquisition.

Average order value

Average order value is also another essential metric that can help you better understand your return on investment from your digital marketing. The metric keeps track of the average dollar amount that occurs when an order is placed by a customer. To measure average order value, take the total revenue and divide by the number of orders. Every business in the world today wants the number of orders to increase and grow over time. However, it’s also vital to pay attention to the value of each order. Improved average order value is often simple and helps in showcasing cross-sell or up-sell opportunities and offering a better user experience.

Lead close rate

It’s also vital to monitor and analyse your lead close rate. A lead close rate is the number of successful sales divided by the number of leads. The outcome is then multiplied by a 100 to acquire the percentage. Lead close rates are vital since they give you a better idea of how efficient and effective your digital marketing strategies are, and how they contribute to your return on investment. The lead close rate also helps you to understand whether your ROI from your digital marketing strategies are profitable or not.