(Read Time: 10 minutes)

Digital marketing isn’t just whacking together a business website and linking to it on your Facebook page.

It’s a complex beast, and one that’s hard to tame without the inside info.

  • Digital marketing is full of (seemingly) complicated terms.
  • The techniques we use to maximise Return on Investment (ROI) are always changing… because technology and people are always changing.
  • The goal of any marketing campaign is to spend $1 and make more back… like $2, $3 or ideally even more – our ROI.

We wanted to break it down a little and really simplify things. And we wanted to show you exactly how to get a great ROI.

If you’re sick of hearing techniques to boost business that don’t crunch actual numbers then this post is for you.

If you’re spending any $$ on digital marketing… there’s 8 key metrics you should understand and be keeping track of…

  • Marketing Budget
  • Cost Per Visit
  • Website Conversion Rates
  • Cost Per Lead
  • Sales Conversion Rates
  • Cost Per Acquisition
  • Customer Lifetime Value
  • Return on Investment

We’re going to show you how to pull the lever on 4 of the key metrics from above…

So you can to take your digital marketing campaigns from:

spending $1 and turning it into $2…

and change it to spending $1 and turning it into $6!

That’s a 500% ROI. And that’s something worth getting excited about.

Marketing Budget

What is it?

How much are you spending on marketing each month… $0? $40,000?

Your marketing budget is how much you spend on marketing on a monthly basis.

This figure will depend on your revenue, industry, and what you’re hoping to achieve.

The average spend on marketing for a small business is 11.1% [source: https://cmosurvey.org], and it is recommended you spend around 10% of revenue per month on marketing.


We will work from a specific scenario so the rest of the numbers throughout this post make sense!

Keep in mind this is relevant for all businesses…

Let’s assume you’re a Dental Practice.

  • You’re turning over $1.2 million P.A, so $100,000 per month
  • 10% of your revenue gives $10,000 to spend each month on marketing

Now, there isn’t a hard and fast rule… but, if you’re a small business pushing for growth, the 10% figure is a great starting point.

Cost Per Visit

What is it?

Cost Per Visit (or CPV) is one of the most important metrics in online advertising.

When we talk about marketing metrics, you might be thinking, “What are all these acronyms?!” … but don’t be put off. Once you know what they mean & start to remember the acronyms it’s smooth sailing.

Back to CPV then! What is it? It’s this little formula here…

Cost of advertising campaign / Number of unique website visits during ad campaign*

*unique website visits means if the same guy visits your website 3 times you only count him once

An advertising campaign could be just Facebook adverts… or it could be a bunch of different ad channels at once.

These might be:

  • Facebook adverts, or other social like Instagram, Twitter, or LinkedIn
  • Google Adwords, with search ads or display ads
  • Video ads, like skippable YouTube videos
  • Sponsored blog posts
  • App ads, to reach mobile viewers
  • Banner ads on other websites
  • SEO techniques, to bump up your Google rankings
  • And more…

Cost per visit should be optimised. You don’t want to spend too much $$ for each click through that you get. (Plus, if you don’t pick up any customers / followers / email addresses then it’s kind of useless!)


Let’s work some numbers here, shall we?

Advertising budget per month: $10,000

Clicks from ads: 2,000

Cost per click: $5

Is this enough traffic for the $$? … Is the cost per visit too high?

Can we push it down to just $4 per click? At $4, that’s an extra 500 clicks for the same price…

How to Improve

We can always improve on anything with time and practice… like learning how to cook a new dish. By the fifth time cooking it or so we really nail it. And CPV is no different!

To optimize your CPV, you want to drive the amount per click down, or bump up the number of clicks.

Try out these techniques…

Make sure you’re only showing your ads to ideal customers

Do your ideal customers even use the platform that you’re marketing through?

For instance, if you’re selling to the 35+ market, choose Adwords over Instagram.

Most advertising channels will allow you to section the audience for your ad via demographics… so make sure to select them carefully!

Have a more compelling offer in your ads to get people to click through

What does your ad say?

If it’s just, for instance, your service, regular price & a fancy graphic on it… will it lure people in? Try adding 20% off for new customers.

Adjust your budget across channels

What is your split of advertising funds for each channel?

For instance, Facebook is typically cheaper than Adwords for dentists – so adjust accordingly. (We’re not suggesting remove Adwords altogether, perhaps just re-allocate some of the budget!)

Optimize paid and organic channels to reduce CPV

Have you tried and compared different paid ads… and switching up your business’s website, email list, social, SEO?

Test out different techniques to optimize your paid and organic marketing. You can learn through trial and error what works for your business…

… When you make changes, track what effect it has on traffic. This helps point you in the right direction.

Website Conversion Rate

What is it?

So, we’ve got all these clicks coming through to our website… what next?

Now, we’ve got to convert clicks into new leads!

Paid ads or organic traffic? It’s all about making each site visitor:

  • Buy your product or service
  • Create a login account with your business
  • Pick up the phone for an appointment
  • Sign up to your mailing list

Each of these is hooking in a lead… when they take an action you want them to. A lead is someone who’s expressed interest in what you’re selling – and you’ve got their details to follow up.

You don’t necessarily need to make a sale right now, but you do want their details for follow up – at the very least!

That is what Website Conversion Rate is, or this formula:

Number of leads / Number of unique website visits x 100


Here comes our numbers game again… Our leads might be calls through to our business…

Unique website visits per month: 2,000

Number of leads: 80

Conversion rate: 4%

Can we push this to get more leads? What can we do to drive our conversion rate up here?

With a jump from 4% to 6% conversion we’d be bringing in 120 leads

How to Improve

We’ve hooked people with our ads, now we need to convince them with the info on our website.

So let’s go ahead and optimize our website for conversion


Punchy headline or boring as batsh*t?

Killer headlines involve one or more of these:

  • Your key theme
  • A big benefit
  • Hot news
  • “How To”
  • An interesting question

Check out our headline again:

Understanding Your Marketing Metrics & How to Get a 500% ROI or More…

Compared to:

What Marketing Metrics Do You Need To Know?

Which is more punchy? Which includes more headline slaying style?

The Offer

What are you offering? What benefit is in it for your customer?

This is your main sales copy – you’re selling a product, a service, getting them to sign up to a mailing list…

Tell them:

  • Exactly what it is
  • What the benefit is for them
  • Why they need it right now

If your offer is flat, you won’t convert… even with a brilliant product/service… simple as that!

The Value Proposition

Why should they choose your business?

Now visitors know WHAT you’re offering, they want to know WHY to choose your business.

So, we add value to the offer…

  • How your product/service is going to change their life!
  • How it differs from the competition
  • Why you’re the best in the biz

Call to Actions: Optimize them, increase them

Where are your call to actions? What do they say?

Which of these two Call to Actions (that’s CTAs) are more clickable?

Why not call our friendly staff to make an appointment sometime this week with Dr Karl?


Instant book an appointment with Dr. Karl

To optimize CTAs:

  • Keep it short n sweet
  • Start with a verb: Get, Download, Call…
  • Make it stand out from the rest of the site with size, colour, font, or pics
  • Sprinkle across site… but not too liberally!

Clean up your website to de-clutter

How much text is on your website? How many different sections to click on your homepage?

People get overwhelmed with too much stuff. Get rid of it.

Some tips for clean up…

  • Break up large chunks of text
  • Cut any irrelevant info
  • Create new pages if need be
  • Utilise menus and submenus
  • Hide things like shipping info, affiliates, behind small hyperlinks

Graphics and User Experience

Do your graphics match what you’re selling? Are they cheesy or 2017? How does your website make visitors feel?

Generic websites are so passe.

Haven’t put in the hard yards into graphics and design? Could be the leg up your competition needs.

People love something pretty to look at, that draws them in. Give it to them!

To improve graphics and the user experience…

  • Stick with the one colour scheme
  • Have up to date, personalised graphics
  • Choose “2017” fonts
  • Browse great websites for inspiration

Cost Per Lead

What is it?

Those leads that we managed to pin down from our website conversions? They’re the focus of CPL.

Cost Per Lead means:

Number of leads / cost of advertising campaign

This is how much (in real dollars!) each qualified lead has cost us in advertising $$.


From our original figures we can work out…

Advertising budget per month: $10,000

Number of leads: 80

Cost per lead: $125

This is getting a little pricier here… Can we drive down the CPL? Get some more leads through the door?

If we get 120 leads like we wanted to, it’s then just $83.33 a lead instead.

How to Improve

Brilliantly, CPL automatically reduces with better Cost Per Visit & Website Conversion Rates…!

How about that?

Sales Conversion Rate

What is it?

Woohoo!! That phone call from your lead turned into a sale!

Finally, we’re making some of that sweet, sweet dough.

Whether it’s through email, phone, social, or whatever means, if that person bought your product or service, they’ve converted….

Sales Conversion Rate is the:

Number of sales / number of leads x 100

You can think of it as a measurement of how interested a customer actually is, and whether you’ve convinced them.


Let’s say that one in four calls to our business results in a completed sale…

Number of sales: 20

Number of leads: 80

Sales Conversion Rate: 25%

1 in 4 ain’t bad, right? Or is it? [Truthfully, it’s not…]

Can we bump up our conversion rate though?

How to Improve

There’s always wiggle room in any business to improve the sales process.

Here’s how…

  • Have a clear marketing message where the sales process is in line with the marketing campaign and vice versa
  • Build better sales scripts
  • Gain a better understanding of prospects biggest pain points and how they can be solved… so you can address and close more sales
  • Train sales staff better – or hire new staff!

Cost Per Acquisition

What is it?

How much does each sale cost you? That’s what we’re looking at with Cost Per Acquisition

Because out of that marketing kitty you can find out what you actually paid for each person you snagged…

CPA means:

Number of sales / cost of advertising campaign


Checking on our figures again reveals…

Advertising budget per month: $10,000

Number of sales: 20

Cost per lead: $500

Phew! $500 per sale sounds like a lot!

If our product or service only costs $500 then we’re only just breaking even! … However, this isn’t always necessarily the case – as you’ll find out in our next section 🙂

How to Improve

The key to improving CPA is to improve our Cost Per Lead… (If you’ll remember this is a combo of improving Cost Per Visit and Website Conversion Rate)

Combine this with an improved Sales Conversion Rate, and you’ll see CPA drop… Meaning it’ll cost you less to acquire a new customer!

Customer Lifetime Value

What is it?

Remember how we were saying a Cost Per Acquisition at the same price as our sale wasn’t necessarily just breaking even?

That’s because if we can keep on selling in the future to the same customer, then we’re adding revenue on top.

Customer Lifetime Value (CLV) is the total profit made from a single customer across the course of your relationship.

This one is a little trickier to work out than our other X / X calculations, we need to calculate…

how much your average customer spends in a year


how many years they stick with you (again, on average)


profit margin on a sale % (yearly sales less yearly overheads)

Cost Per Acquisition

There’s several other bits to the CLV, and depending on your business type it can change quite a bit. However, this gives you the basics to find total profits with any customer…

Other things to consider for CLV calcs are:

  • Do you offer a product or service that delivers repeat business?
  • Do you other products or services that complement the main one that you can cross-sell or upsell?
  • Is your business one that thrives on referrals?


The process for determining the CLV is the same in any business…

Average customer spend for 1 year: $500

Number of years: 10 years

Profit margin: 30%

Cost to acquire: $500

Customer Lifetime Value: $1000

So, for each customer we can anticipate that they’ll make us $1000 in profit… We want to crank this figure up!

How to Improve

To improve CLV, we want to get more customers, keep them longer, and make them spend more with us.

Here’s how to hack it…

  • Build an effective referral program
  • Offer customers more value than you promised so they keep coming back
  • Offer superior customer service
  • Choose the right rewards and incentives
  • Build long term relationships
  • Offer upsells or cross-sells
  • Send customers more information / education (something they didn’t know about that ads value)
  • Listen to your customers and take their advice
  • Give customers something the competitors are not
  • Make quality a priority

Return On Investment

What is it?

You’ll have heard this one before, Return on Investment = ROI.

What is ROI?

Customer Lifetime Value


number of customers


cost of advertising campaign

This is a percentage figure that tells us how much money we made compared to how much we spent on them.


From our original figures we can work out…

Advertising budget per month: $10,000

Number of customers: 20

Customer Lifetime Value: $1000

ROI: 200%

Not a bad return, but hey… we want to get to 500%!

How to Spend $1 and Make $6

We’ve explained how to optimize all sorts of metrics here, so let’s put it all together…

More traffic for same price: decrease $5 Cost Per Visit (2000 visits) to $4 Cost Per Visit (2500 visits)

Improve Website Conversion Rate: 4% to 6%

Improve Sales Conversion Rate: even if this stays the same!

Increase Customer Lifetime Value: from $1,000 to $1,600

Now spending $10,000, get $60,000 – ROI = 500% ROI or for every $1 spent get $6 back!!

As you can see, it’s worth tweaking every one of these metrics.

Put the wheels into motion in your business and start seeing results.

Need help? Hey, that’s what we’re here for …

Let’s work through your digital marketing strategy together and see what can be done to kick your profits into overdrive. Schedule your free 30-minute Strategy Session now.

About Paul Hanney

Paul is the Founder and Chief Marketing Strategist at Phorge. With over 10 years experience in digital marketing and having generated over $27million in revenue. Paul's focus is on helping businesses grow and scale using sustainable and automated digital marketing strategies.
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