In most cases, when choosing a KPI, you can use ROI as a basis. Where the coefficient cannot be calculated, it is worth tying it to target Leads. But first things first. Let's start with ROI.
ROI (Return On Investment) — investment return coefficient
This is the main marketing metric for a business owner or marketing director. It is calculated in %.
ROI = (Profit - Investment) * 100% / Investment
Norm:
If the ROI is greater why choose our service than 100%, then the investment in advertising was profitable; if less, then the campaign was unprofitable.
How can it be improved:
Track the indicator at all stages of the advertising campaign and stop it if the advertising stops paying off, so as not to waste the budget.
If the results cannot be calculated, we select a KPI based on lead generation.
A lead is a potential client.
Lead generation is the search and collection of potential clients.
Advertising campaigns also generate leads - attract potential customers to the site and collect their data. When launching an advertising campaign, the marketer sets a goal: how many leads need to be obtained and what profit they should bring.
Lead generation metrics help to evaluate the effectiveness of an advertising campaign from this point of view.
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CPA (Cost Per Action) — cost of target action
How much does your lead action cost?
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You launched a campaign to collect your clients' email addresses in order to warm them up and sell them your services. The target action of your potential client is to fill out and send a form with their data. Roughly speaking, you buy the client's email address and the ability to send them letters.
Norm:
The profit from a lead should be greater than the cost of attracting it.
How can it be improved:
Research the target audience, segment it and send relevant offers to each group.
You can view CPA in any contextual advertising service: Yandex.Direct, Google Analytics, eLama.
CPO (Cost Per Order) — the cost of a confirmed order or completed transaction
The metric shows how much one customer purchase costs. It is suitable for assessing the efficiency of online stores and service sites - banks, real estate agencies, developers and all those who have an order form on the site. Allows you to see the income from the lead. This is a type of CPA indicator.
CPO (Cost Per Order)
Calculated as the ratio of advertising campaign costs to the number of confirmed orders.
Norm (conditionally):
The profit from a confirmed order is higher than the cost of attracting a lead.
How can it be improved:
Provide relevant ads, include advertising costs in the price of the product or service. Reduce the cost per click on the ad.
Case: VT-metall
Find out how we reduced the cost of attracting an application by 13 times for a metalworking company in Moscow