Improve Online ROI by Tracking These Marketing Metrics

Improve Online ROI by Tracking These Marketing Metrics

The key to a successful online marketing campaign lies in understanding how well it is meeting its objectives. Improving your return on investment (ROI) can be achieved by keeping a close eye on your marketing metrics and this requires you to have a full understanding of the data at your disposal. In this post, we’ll look at a range of different metrics that, when analysed and acted upon, can help your marketing campaign become more successful.

Where to start

When using data to drive your online marketing campaign, it is important that you set goals on your website analytics and ensure that the information you need is being tracked. This way you can monitor the impact of your campaign over time, enabling you to make changes when needed.  Here are some metrics which you may find beneficial.

1. Customer Drop-Off Rate

Every customer you acquire will come at a marketing cost. It is important to keep track of those you lose as each of these will affect your ROI. The customer drop-off rate is the percentage of existing customers who you lose over a specific period of time. Although there will always be some customers who stop buying from you, it is important to keep the number down to an acceptable minimum. The higher your drop-off rate, the lower your income and profits will be.

The only way you can see how well you retain customers is to keep track of them. Setting up your analytics to see how many returning visitors click the buy button is one of the best ways to measure this. Keeping purchase history records is another.

2. Customer Life Time Value

The Customer Life Time Value (CLTV) essentially measures the revenue you earn from the average customer over the period in which they remain a customer. It is worked out by multiplying the price of the product by the number of annual purchases, times the number of years they continue to buy from you.

The importance of the CLTV is that it helps you set feasible budgets for your marketing campaign. For example, if your product costs £10 and the average customer buys from you 10 times a year for five years, you know that the life time value of your customers is £500. With this in mind, you have a much greater understanding of the limits you need to set for your marketing campaign. A campaign that costs £50 to acquire a new customer may be worthwhile, where as one which costs £500 obviously isn’t.

Keeping records of customer purchase histories is the ideal way to track your CLTV. You need to know if any changes to it take place –  you obviously want it to go up, rather than down.

3. Customer Acquisition Cost

Whilst an improvement to your CLTV is one way of measuring the ROI of your online marketing campaign, you can increase the value of the ROI by lowering the cost of acquiring new customers.

To make your marketing campaign more effective, you need to know the customer acquisition cost for the channels you are pursuing. This is calculated by dividing the cost of your marketing campaign by the number of new customers you gain.

Analysing which channels acquire new customers for the least expense is one way of determining the most effective channel and for deciding upon annual or monthly budgets. For example, if Google advertising costs £100 per new customer but Facebook advertising costs £50, focusing on Facebook ads will half your monthly budget whilst bringing in the same number of new customers. As a result, your ROI will increase too.

4. Take-Up Rate

One way to measure the effectiveness of your marketing campaign is to find out its take-up rate. In other words, what percentage of people take advantage of your marketing offer. This can be worked out by dividing the number of people who become customers by the number of people who have seen your campaign. For example, if you sent out 1000 emails and 100 people made a purchase, your take-up rate would be 10%.

Online take-up rates are generally very small. Your Google ad may be seen by tens of thousands of people, yet only a few hundred may click on it. Of these, only a handful may buy. Your task is to find ways to increase the take-up rate by making your marketing material more effective. This can be achieved through tactics such as A/B split testing, etc. Doing this can bring down the costs of acquiring new customers.

5. Payback Period

Whilst return on investment is a key metric for the long-term growth of your business, over the short-term, it is important that marketing campaigns pay for themselves in a period that does not impact on your cash-flow.

The payback period is the metric used to calculate how quickly your marketing campaign breaks even. For example, whilst a £10,000 campaign might bring in an ROI of £200K over three years, the payback period, where the campaign pays for itself, might be three weeks.

Understanding how long a payback period is likely to be is one way of evaluating whether it is worth pursuing. Spending £10k on a campaign that takes a year to pay for itself might not be the wisest of investments for a small company. If you are going to run consecutive marketing campaigns, it’s also worthwhile knowing that campaign A has broken even before launching campaign B.

6. Customer Satisfaction

Successful online marketing campaigns can backfire spectacularly if the products or services you offer do not satisfy your customers. Product returns, customer complaints, poor feedback and social media criticism can reduce ROI and do long term damage to customer acquisition.

Enabling customers to give feedback quickly and easily and keeping track of what they say is the simplest way to put a stop to issues which may escalate into crises. Enabling on-site reviews or allowing customers to contact you via Facebook and Twitter, for example, are easy ways to deal with problems. On a more positive note, great feedback can help boost sales and increase acquisition even more.


Marketing campaigns can be costly and this makes them a risk for some businesses. If you want your online business to succeed, you need to make sure you have complete oversight of how well the campaign is going and how effective it is. Hopefully, the metrics we have mentioned in this post will help you get a better understanding of your marketing campaigns.

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