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An Introduction to Common Digital Marketing Metrics

If you are like most business owners, you would agree that digital marketing metrics can be confusing. From Average Order Value (AOV) to Customer Lifetime Value (LTV), there are so many terms and acronyms to learn—and that’s before we even discuss conversion rates and bounce rates! In this article, we will break down some of the most important digital marketing metrics and explain why they are important for small businesses.

By understanding common digital marketing metrics such as AOV, conversion rate, LTV, NPS Score, time on site/page & bounce rate - companies can better understand how consumers interact with their brand.

Average Order Value (AOV)

The Average Order Value (AOV) is an important metric that measures the average amount of money customers spend per purchase. AOV is calculated by dividing the total revenue of a certain time period by the number of orders placed. This metric gives businesses a better understanding of their customer lifetime value (LTV). The higher the AOV, the more profitable each individual customer is likely to be in the long run.

Conversion Rate

Conversion rate is one of the most important digital marketing metrics because it tells businesses how successful their campaigns are at generating leads and sales. It’s calculated by dividing the number of customers who make a purchase or take an action by the total number of visitors on your website or landing page. You want your conversion rate to be as high as possible; if it’s low, this could indicate that your website needs improvement or that your messaging is not resonating with your audience.

Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) measures the total amount of money an individual customer spends on products and services over a given period of time. LTV is an effective way for businesses to measure their customer retention efforts and track profitability over time. It can also help them determine which customers should be targeted with specific offers or promotions in order to maximize their return on investment (ROI).

Net Promoter Score (NPS® Score)

The Net Promoter Score (NPS® Score) measures how likely customers are to recommend a company’s product or service based on their experience with it. NPS scores range from 0-10 and are calculated by subtracting the percentage of detractors from promoters—customers who give scores between 0-6 are considered detractors, 7-8 are neutral, and 9-10 are promoters. Companies should strive for high NPS scores as it indicates strong brand loyalty among its customers.

Time on Site/Page & Bounce Rate

Time on site/page and bounce rate measure how long people stay on your website/landing page before leaving it without taking any action—this could include making a purchase, signing up for an email list, etc.. The longer someone stays on your website/page, then more engaged they may be with what you have to offer—which could result in more conversions down the road! On the other hand, if someone leaves quickly after visiting your page then something about it may not have resonated with them—this is known as “bouncing” off your website/page which can hurt overall conversions in the long run if too many people do this frequently.

Conclusion

Digital marketing metrics give small businesses insight into how successful their campaigns are performing online and provide valuable information about customer behavior and preferences that can be used to optimize future campaigns for maximum effectiveness and ROI. By understanding common digital marketing metrics such as AOV, conversion rate, LTV, NPS Score, time on site/page & bounce rate – companies can better understand how consumers interact with their brand online thus allowing them to make informed decisions regarding future marketing efforts accordingly.

Brandon

Brandon was born in the early 1980s with two vocational-type passions starting at a young age - selling great products and tinkering with technology. In the late 1990s, he started diving into web technologies and web design. eCommerce is the perfect marriage of his two vocational passions, and it is taking the retail world by storm. Fast forward to now and Brandon has had the pleasure of working with many SMBs and startup companies across different industries from software, outdoor apparel and accessories, footwear, high fashion jewelry, pet products, interior design, hospitality, real estate, agriculture, home improvement, recreational vehicles, direct sales, and more transacting over $50M with his clients as a result of his work. He founded Peak Digital Marketing Solutions, LLC in 2022 to help clients develop practical systems and programs and elevate SMBs in the eCommerce space using a holistic approach.

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