What KPIs do you find most effective to demonstrate ROI?

When it comes to proving the return on investment of your marketing efforts, there is no one right answer. 

However, there are a few key KPIs that are commonly used to measure ROI;

And understanding what these are can help you to create successful marketing campaigns that generate a good ROI.

What KPIs do you find most effective to demonstrate ROI? 

What are KPIs and ROI? 

And what are KPIs in investment? 

These questions and others will be answered below. 

 

What are KPIs and ROI?

KPIs, or key performance indicators, are metrics used to measure and track progress towards specific goals. 

ROI, or return on investment, is a financial measure of an investment’s profitability.

What is the KPI for ROI?

The KPI for ROI is the percentage of profit generated from each investment. 

It is calculated by taking the total revenue from the investment and subtracting the total costs associated with it. 

The resulting number is then divided by the total amount invested. 

This number can be used to compare different investments and to assess which ones are more profitable.

Is ROI part of KPI?

The quick answer is no, ROI is not part of a KPI. 

KPIs are quantifiable measures used to evaluate whether a company is achieving its key business objectives. 

ROI, on the other hand, is a performance metric used to measure the profitability of an investment. 

While both are important metrics to track, they serve different purposes and should be used accordingly.

What are KPIs in investment?

KPIs in investment are numerical values that organizations use to measure the progress and success of a portfolio or individual investments.

KPIs in investment are typically classified as either positive or negative metrics. 

Positive metrics (or return on investment) measure how much money is made by an investor when they sell their stock. 

While 

Negative metrics (or loss on investment) measure how much money is lost by an investor when they sell their stock. 

Other examples of positive metrics include earnings per share and price-to-earnings ratio; 

And other examples of negative metrics include book value per share and dividend yield.

 

What KPIs Do You Find Most Effective To Demonstrate ROI?

To show the effectiveness of your marketing campaigns and the return on investment (ROI) they generate;

It is important to track key performance indicators (KPIs). 

But which KPIs should you focus on? 

In this article, we’ll discuss six of the most effective KPIs you find most effective to demonstrate ROI for your marketing campaigns.

 

 6 KPIs You Can Find Most Effective To Demonstrate ROI:

1. Web Traffic 

One of the most basic and important KPIs you find most effective to demonstrate ROI is web traffic. 

What is the KPI for website traffic?

KPI for website traffic is the number of visitors to a website in a given period, usually 30 days. 

The metric is typically expressed as an average over the month or year. 

Knowing this information will let you know how successful your campaign was;

Which in turn helps you make adjustments and changes for future campaigns.

Website traffic is one of the most important KPIs for any business, and it’s also one of the easiest to measure. 

By tracking how many people visit your website, you can get a good idea of how well your marketing efforts are paying off.

Why KPI for website traffic is important?

1] it shows customer satisfaction.

It shows if your company is doing what customers want to be done on the site. 

That is if they are happy with what they’re getting from your company. 

2] It could also help show how long customers stay on the site and where they click. 

What is a good KPI for website traffic?

A good KPI for website traffic is the number of visitors that a website has. 

The higher the number of visitors, the more popular and successful a website is.

A good KPI for website traffic would depend on the type of business. 

If you sell products online, then having a high conversion rate would be essential. 

For an e-commerce site like Amazon, that would mean having high sales numbers relative to the total amount of visits.

A good KPI for website traffic can be anything that you want to track. 

For example, some people might want to track the number of visitors per day or week instead of just focusing on one metric like new visitors.

2. Bounce Rate 

Another one of the most basic and important KPIs you find most effective to demonstrate ROI
is Bounce Rate. 

What is the bounce rate in Digital Marketing?

A bounce rate in Digital Marketing is the percentage of users who leave a website after only a one-page view. 

The bounce rate measures how engaging your site content is, and gives you an idea of whether visitors are finding what they’re looking for.

What is a good bounce rate?

A good Bounce rate is the percentage of visitors less than 40% who leave your site after visiting your website for the first time. 

 

Table 1: A table illustrating “What is a good bounce rate?”

 

% Bounce Rate

Comments
3% Very Good
5% Very Good
8% Very Good
10% Very Good
12% Very Good
15% Good
20% Good
25% Good
34% Good
80% Bad and Terrible

 

Table 2: A table illustrating “What is a good bounce rate?”

 

% Bounce Rate

Comments Explanation
1%-14% Very Good You have a good organic traffic source.

And people are finding what they’re looking for on your site and sticking around.

15%-40% Good This is a good thing!

It means that they’re finding what they’re looking for, and they’re interested in what you have to say.

41%-60% Average and Normal people are finding what they’re looking for on your site and sticking around
61%-100% Bad and Terrible a higher bounce rate is cause for concern.

The higher your bounce rate, the more people are exiting without interacting with other pages on your site

Define whether bounce rate is a good KPI.

Yes! bounce rate is a good KPI because it helps you understand the effectiveness of your content.

And if your goal is to increase conversions, then a high bounce rate could be indicative of a problem. 

However, if your goal is simply to increase brand awareness or website traffic, then a high bounce rate might not be as big of a deal.

Is a 20% bounce rate good?

It is a perfectly normal bounce rate and most sites will have a bounce rate somewhere between 15-40% for most of the traffic.

A bounce rate of 20% is not unusual for a website. 

Define whether a low bounce rate is good.

A low bounce rate is generally good because it means that people are staying on your site and engaging with your content. 

On average, the bounce rate on a website is around 41%-60%. 

If your bounce rate is lower than 40%, it means people are finding what they’re looking for on your site and sticking around. 

This is a good sign that you’re providing valuable content and that people are interested in what you have to say.

What does a low bounce rate mean?

A low bounce rate means that visitors are sticking around on your site and engaging with your content. 

This is a good thing! It means that they’re finding what they’re looking for, and they’re interested in what you have to say.

Is a lower or higher bounce rate better?

A lower bounce rate is better because it means that people are staying on your site and engaging with your content. 

Generally, a higher bounce rate is cause for concern. 

The higher your bounce rate, the more people are exiting without interacting with other pages on your site.

How important is the bounce rate?

There are several ways how the bounce rate is important.

 Here are some of them:

1) Bounce rate helps you identify pages with high bounce rates and focus on improving them.

2) Bounce rate guides you when creating content that encourages visitors to stay longer on your site.

And this is because you discover what people like to see on your site.

Additionally, you identify content that is not engaging with visitors.

3) Bounce rate helps you as a benchmark for comparing different landing pages and websites.

4) Bounce rate helps you monitor how changes you make affect your bounce rate.

5) Bounce rate helps you understand which pages get more traffic than others.

NOTE:

if you need a Digital Marketing reporting dashboard software to quickly and easily identify and track KPIs to demonstrate ROI;

We recommend Dashthis Digital Marketing reporting dashboard software to generate KPIs and dashboards.

DashThis is an easy-to-use and easy-to-implement tool to report on your KPIs.

CLICK HERE To get 10 FREE Digital Marketing reporting dashboards for 15 Days.

We don’t need your credit card information! So don’t worry!

CLICK HERE To get 10 FREE Digital Marketing reporting dashboards for 15 Days.

3. Revenue Generated 

Another one of the most basic and important KPIs you find most effective to demonstrate ROI
is Revenue Generated. 

What is the KPI for revenue?

KPI for revenue is the amount of money generated through the sale of goods and services. 

In other words, KPI for revenue measures the total amount of money your marketing campaigns have brought in.

For example:

If you see a sudden increase in your total sales, it indicates that you made a good decision on your marketing strategy. 

However, if there is no increase in sales, it can indicate that your company needs to rethink its marketing strategy. 

Revenue KPIs

There are several different revenue KPIs that can be used to demonstrate ROI. 

One common metric is gross margin, which measures the percentage of revenue left after accounting for the cost of goods sold. 

Other popular revenue KPIs include net income, operating income, and EBITDA.

Tracking your marketing campaigns’ revenue;

You can see exactly how much profit they are generating.

4. Cost-Per-Lead (CPL) 

Another one of the most basic and important KPIs you find most effective to demonstrate ROI
is Cost-Per-Lead (CPL).  

What is the cost per lead in Digital Marketing

The cost per lead in Digital Marketing is a metric that describes how much it costs to acquire a new customer. 

A low cost per lead is indicative of a strong ROI. 

A high cost per lead indicates a poor return on investment.

Is the cost per lead a KPI?

The cost per lead is definitely a KPI that can demonstrate your ROI. 

What does a high cost per lead mean?

A high cost per lead means you’re spending a lot of money on marketing activities to generate new leads. 

And this could be a sign that your marketing efforts are inefficient;

Or that the leads you’re generating are not high quality. 

To lower your cost per lead, you can either increase your marketing budget or focus on generating higher-quality leads.

Why is a cost per lead important?

1) Firstly, Cost-Per-Lead (CPL) helps marketers understand and track their return on investment (ROI).

2) Secondly, Cost-Per-Lead (CPL) can help marketers increase their ROI by focusing on their most profitable campaigns.

3) Thirdly, Cost-Per-Lead (CPL) helps marketers to set goals and benchmarks for future campaigns.

4) Fourthly, Cost-Per-Lead (CPL) provides insight into what is working and what isn’t.

5) Lastly, Cost-Per-Lead (CPL) makes it easier for marketers to monitor their marketing budget.

 

NOTE:

if you need a Digital Marketing reporting dashboard software to quickly and easily identify and track KPIs to demonstrate ROI;

We recommend Dashthis Digital Marketing reporting dashboard software to generate KPIs and dashboards.

DashThis is an easy-to-use and easy-to-implement tool to report on your KPIs.

CLICK HERE To get 10 FREE Digital Marketing reporting dashboards for 15 Days.

We don’t need your credit card information! So don’t worry!

CLICK HERE To get 10 FREE Digital Marketing reporting dashboards for 15 Days.

5. Conversion Rate 

Another one of the most basic and important KPIs you find most effective to demonstrate ROI
is Conversion Rate.  

What is the KPI for conversion?

KPI for conversion is the percentage of people who complete a transaction or process. 

We can also measure conversion rates by looking at the percentage of people who completed a certain action;

Such as filling out a form, visiting another website, or downloading an app. 

Define whether a conversion rate is a good KPI.

Yes! Conversion rate is a good KPI to demonstrate ROI. 

A table illustrating “What is a good Conversion rate?”

% Conversion Rate Comments Explanation
Less than 1.5% Low and  not Good this could be due to a lack of interest in the product or the website;

Or it could be due to an inadequacy of the information or service offered.

1.5% -2.5% Average and Normal Average sales
2.5% -5% Good increased sales
Above  5% High and Great More Increased sales

What does conversion rate mean?

 Conversion rate means a measure of how well your site is doing at converting visitors into paying customers.

Define whether a higher conversion rate is better.

Simply because the conversion rate is higher does not mean it is better. 

If your product is low quality, you may have a high conversion rate of people buying your product;

But they will not return, costing you more money in the long run. 

And they will not recommend others to buy it.

On the other hand, if your product is high quality, you may have a lower conversion rate;

But the people who do buy it are more likely to be satisfied and are likely to return for more.

And they are likely to recommend others to buy it.

Is a 5% conversion rate good?

Yes, a 5% conversion rate is good. 

However, it really depends on your business goals and objectives. 

For example, if your goal is to increase sales by 10%, then a 5% conversion rate would be great. 

However, if your goal is to increase sales by 100%, then a 5% conversion rate would need to be increased. 

Many factors come into play when determining whether or not a conversion rate is good, so it’s important to keep that in mind.

Is a 12% conversion rate good?

Yes, a 12% conversion rate is considered good. 

Is 15% a good conversion rate?

Yes, a 15 % conversion rate is considered good. 

Is a 20% conversion rate good?

Yes, a conversion rate of 20% is considered good. 

Is a 30% conversion rate good?

Yes, a 30% conversion rate is considered good. 

What is a low conversion rate?

A low conversion rate can be defined as a low number of unique visitors that convert into a sale.

A low conversion rate is a conversion rate that is much lower than what a website owner thinks it should be

And this could be due to a lack of interest in the product or the website;

Or it could be due to an inadequacy of the information or service offered.

Why is conversion rate important in digital marketing?

1] Conversion rate is important in digital marketing because it helps identify what the visitors are looking for.

2] Conversion rate is important in digital marketing because it indicates how many people are taking the desired action and how many are not.

To improve your marketing strategy and increase revenue.

3] Conversion rate is important in digital marketing because it can help you figure out which marketing channels work best for your site;

And which ones need to be changed or improved upon.

4] Tracking conversion rates can also be used as an indicator of customer satisfaction levels;

-So that you know when customers may have had enough with your product. 

To improve your marketing strategy and increase sales or leads.

5] Conversion rate is important in digital marketing because it helps improve your ROI;

-By showing you where customers are finding value in your product or service.

6. Cost per click (CPC)

Another one of the most basic and important KPIs you find most effective to demonstrate ROI
is Cost per click (CPC).  

What is CPC in digital marketing

CPC in digital marketing is an advertising cost model that shows how much you pay for each click on your ad.

What this means is that each time someone clicks on an ad, the advertiser pays a certain amount of money. 

The average for this can vary, but it usually ranges from $0.05 to $0.30 per click;

– depending on what keywords are being used and what type of ad campaign it is. 

If an ad has a higher CTR (click-through rate), then the cost-per-click will be lower;

– because more people are clicking on the ads and vice versa.

What is CPC KPI?

CPC KPI is a metric that measures the performance of the website based on clicks, impressions, and total revenue.

 It’s an important metric because it measures how much people are willing to pay for your ads. 

You want this number to be as low as possible, but not too low because then no one will click on your ads. 

The higher this number, the more likely it is that someone clicked on your ad;

And were persuaded by what they saw on your landing page or website.

Define a good cost per click.

A good cost per click (CPC) is a tricky number that varies depending on the campaign and keyword. 

Still, according to Google, an average CPC is somewhere between $1 and $2. 

It’s always important not to set too high of a bid for a specific keyword;

So that you can get as many clicks as possible without being outbid by another advertiser. 

Ad copy plays a large role in how much traffic will be generated from a particular keyword phrase.

Is cost-per-click a KPI?

This is not a KPI, as it does not measure the success of a campaign. 

It measures the cost-per-click which means the cost to market a product or service each time someone clicks on the marketing. 

As this metric cannot show the return on investment;

– marketers should look for other metrics that can be used when evaluating their campaigns and measuring effectiveness.

Why is CPC important

There are many benefits to using CPC as your primary marketing strategy. 

Here are the five most important ones: 

1] You Reach More People

 One of the biggest benefits of CPC advertising is that you can reach a large number of people very quickly. 

When you place an ad, it’s shown to anyone who visits the website where it’s placed. 

This means that you can get your message in front of a lot of people very quickly, without having to spend a lot of money. 

2] Increased Traffic 

One of the main benefits of CPC is that it can help to increase traffic to your site. 

When you bid on keywords and place ads in front of people who are interested in what you have to offer;

– you’re more likely to get them to click through to your site. 

And the more people who visit your site, the more chances you have of converting them into customers.

3] Get immediate feedback on your ad campaigns. 

4] Control your budget and how much you spend on marketing.  

5] Improve your ROI by targeting only interested customers.

 

Conclusion 

I hope that this helps provide some clarity on the KPIs you find most effective to demonstrate ROI. 

And if you need a Digital Marketing reporting dashboard software to quickly and easily identify and track KPIs to demonstrate ROI;

We recommend Dashthis Digital Marketing reporting dashboard software to generate KPIs and dashboards.

DashThis is an easy-to-use and easy-to-implement tool to report on your KPIs.

CLICK HERE To get 10 FREE Digital Marketing reporting dashboards for 15 Days.

We don’t need your credit card information! So don’t worry!

CLICK HERE To get 10 FREE Digital Marketing reporting dashboards for 15 Days.

Related Articles