--- title: "Digital Marketing: Essential Metrics to Prove Value to the Bottom Line" description: Looking for ways to show your CEO that digital marketing is getting the job done? 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When they look for places to trim the budget and digital marketing comes up, are you confident they’ll see its value? Or will it get the ax? Now more than ever, it’s important to show how your marketing efforts are adding value to the bottom line. However, that’s easier said than done, especially with digital marketing. It can all seem rather nebulous—how do you show that your marketing efforts are translating to increased occupancy and revenue? The answer is by knowing which digital marketing metrics will best prove ROI—and how to gather and interpret that data. ## **First, What Does Your CEO Care About?** Before you start calculating the ROI of your digital marketing program, you’ll need to define what your CEO cares about the most. Define your key performance indicators (KPIs) and determine what the top priority is. Is it profitability? Is it decreasing spending? Is it increasing return on investment (ROI)? You’ll also want to answer these questions: - What are your organization’s goals? - How does marketing fit into those goals? - What are specific goals marketing and sales need to hit? - How realistic are the goals compared to the budget? - What metrics are the most important to your CEO (leads, move-ins, etc.)? - What is the average performance of the existing digital program compared to your benchmark? - How does your CEO want the data presented and how often? The answers to these questions will determine which types of marketing metrics you’ll look into and include in your reports. For example, you may care about how many people are opening your monthly email newsletters, but if you can’t translate that information to a meaningful, goal-oriented metric for your CEO, it’s meaningless when making the case for your digital marketing program. Don’t get me wrong; it’s great that people are opening your emails. But does your CEO care about that? Probably not, unless you can show how that helps you meet one of your goals. ## **Important Digital Marketing Metrics (And How to Calculate Them)** ### **Return on Investment (ROI)** **![ROI Calculation](https://mktgessentials.com/hs-fs/hubfs/Picture1.png?width=600&name=Picture1.png)** ROI measures the amount of revenue generated from an investment, relative to the investment's cost. To calculate ROI, divide the amount of revenue generated by total expense. The result is expressed as a percentage or a ratio. ### **Customer Acquisition Costs (CAC)** **![Customer Acquisition Costs (CAC)](https://mktgessentials.com/hs-fs/hubfs/Picture2.png?width=600&name=Picture2.png)** This is a good metric to look at when you want to optimize your ROI. In other words, if the costs to gain customers can be reduced, the company’s profit margin improves, creating a larger profit. To calculate your Customer Acquisition Cost (CAC), you’ll need to determine the total amount you’re spending on marketing and divide that number by how many new residents (or customers) you’ve gained in a set time range. From there, you’ll be able to ask important questions, such as how much a resident brings to the bottom line and how much you can afford to spend on customer acquisition. ### **Customer Lifetime Value** **![Customer Lifetime Value](https://mktgessentials.com/hs-fs/hubfs/Picture3%202new.jpg?width=600&name=Picture3%202new.jpg)** One way to analyze and estimate marketing costs is to calculate the lifetime value (LTV) of a customer. Roughly defined, LTV is the projected revenue that a customer will generate during their lifetime with your company. To determine LTV, first you need to determine how many years on average residents stay with you. Take the total customer relationship in years, then divide by the number of customers to get an average customer relationship time period (in years). In other words, if you look at your past customers and see that they spent 5,000 years combined at the community, you would then divide by the amount of customers, say 1,000, and get an average length of stay of five years. Then, you can multiply that by the average annual revenue per customer to see how much the average customer is worth. That is your customer lifetime value. This metric is important because it will help your senior living community determine how long it will take to recoup the investment it takes to gain a new resident. ### **Sales Funnel Metrics** You’ll also want to look at your sales funnel to get some of the most important digital marketing ROI statistics. To prove that digital marketing is doing its job (and to optimize its performance), monitor how many leads are flowing through your funnel and the velocity at which they are moving. Sales funnel metrics should answer these questions: - How many leads are flowing through the funnel? - What is our conversion rate for visitors to leads? - What is our conversion rate for leads to marketing qualified leads (MQLs)? - What is our conversion rate for MQLs to sales qualified leads (SQLs)? - What is our conversion rate for SQLs to customers? #### **Funnel Stages: What to Measure** Here’s why it’s so important to report on funnel metrics: All of your marketing efforts tie back to them. For example, remember how I said your CEO probably doesn’t care about your email open rate? Well, if you can show that leads are opening your emails and converting to MQLs because of the content, that open rate becomes a very meaningful metric. It shows that those emails are helping drive potential residents through the funnel and are therefore contributing to the bottom line. So, in addition to conversion rates, you should also be monitoring the performance of your marketing and sales efforts in each stage. Below you’ll find some examples of what to track in each one. **Top of Funnel:** - Website traffic - Referral sources - Brand reach and growth - Engagement on social media - Keyword performance and ranking - Click-through rates **Middle of Funnel**: - Leads - Form fills - Visitor-to-lead conversion rates **Bottom of Funnel**: - Tours - Move-ins ## **Gathering Data for Digital Marketing Metrics** Combined, the above metrics should help prove to your CEO the value of digital marketing. The only question is, how do you gather that data? It depends on the tools in your toolbox. Depending on what systems you have access to, you can pull data from: - Your website - Google Analytics - Social media platforms - Email marketing platforms - Marketing Automation Platform (MAP) - Customer relationship management system (CRM) - User Experience (UX) tools - Call tracking - Online chats (AI Bots) ## **Improving Your ROI** It may be that when you finish gathering the data on all these metrics, you’ll have glowing results across the board. However, it’s much more likely that you’ll uncover both strengths and weaknesses. And that’s OK. One of the benefits of calculating ROI is that it gives you the chance to find what’s working, what’s not and what you can do better. 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Calculate the ROI of digital marketing with these key metrics. " } ```