“How do we know that our marketing is working?” – said every business owner, ever.
As a business that focuses on using marketing to help other businesses reach their goals, we are more than familiar with this question. And we understand why we hear it pretty often, too.
The way marketing efforts are measured is a bit more abstract than measuring, let’s say, sales efforts.
Purchasing habits change constantly, people are interacting with marketing content across channels, and there are about a billion other external factors that marketers just aren’t able to control for.
Which brings us back to the question, how do we know that what we are doing ACTUALLY works?
What and how are you measuring, and does that data help you to create, adapt, and supercharge your marketing efforts?
Every marketer knows that ROI matters. Figuring out the true ROI of your programs will help you to do more of what’s working – with fewer resources.
Getting more from less is the magic formula that successful marketing departments have figured out.
Despite the more abstract nature of marketing analytics, there are steps you can take to measure your ROI more effectively.
1. Establish Clear Goals
For starters, there is no singular KPI that provides the best marketing measurement across marketing activities.
Your KPIs should be tailored to the goal of your campaign.
For example, if your goal is to get your brand in front of as many people as possible, you might measure the number of impressions you’re making in the market through different channels.
If your goal is to get people to purchase a specific product, you might measure how many times an ad for that product has been clicked on and viewed.
Let’s say your goal is to see an increase in revenue directly related to marketing. You might decide to focus on generating quality leads through hyper-focused target marketing.
We know that people want to see those dollar signs when it comes to marketing KPIs.
But keep in mind there can be more to a marketing campaign than just ROI, like shifting people’s perception of your brand.
Depending on your marketing objective, your ROI could include increasing brand awareness, gaining new customers, and increasing engagement on your website and other digital platforms.
2. Measure Your Website Traffic and Digital Presence
Some may say that traffic is a vanity metric. We disagree.
Tracking traffic is a crucial step because, regardless of what your end business goal is, you need to have eyes on your content to reach it.
Typically, marketing efforts encourage people to go to a website – the hub for your organisations’ information, products, and services.
One way to tell if your marketing efforts are working is to look at where your traffic is coming from. Your views could come from:
- Social networks
- Paid search
- Organic search
How is your target audience getting to your site? Did you invest in that channel? Should you invest more or try a new strategy?
Spending time tinkering with how you can get more eyes on your brand increases brand awareness and, in turn, potential sales.
3. Look At Revenue
Here’s the big kahuna. What percentage of revenue can be traced to your marketing efforts?
To answer this, you can start by measuring:
- New customers – Did a new customer who purchased your product or service find out about you through social media? Mass media? Email? At an event?
At what point in the journey did they decide to buy? And what did they purchase – was it something advertised on a digital channel, or something the consumer found themselves? Exploring these questions will help you understand what sales can be directly tied to marketing efforts.
- Top converting pages – While evaluating your website traffic, take a look at what pages encourage people to purchase. What pages are being looked at most often, and how are people purchasing from those pages?
- Online sales – Online sales are often influenced less by external factors and more by marketing efforts.
If you see a jump in your sales that are solely transacted online, take a look at what your marketing mix was before that happened. If you ran a special promotion or advertised on a certain platform, do more of that.
But don’t forget…
Every business is unique, and so there are bound to be some metrics that matter more to your business than the company down the road.
Two items that many executives overlook – but smart marketers never do – are the following:
- Return on Ad Spend – Simply stated, this is calculated by dividing the total spend on a channel by the revenue generated. In a real-life example, if we spend $10,000 on paid search and generate $40,000 in revenue, then the ROAS is $4:1. You should complete this formula for any digital channel where you spend measurable dollars.
- Customer Lifetime Value – This is a predictive measure of the net profit attributed to your entire future relationship with a customer. It’s particularly important for growing companies to monitor. Understanding the potential value a customer will have over their lifetime, particularly in relation to the cost of acquiring that customer, will help you understand your investments in gaining clients and retaining them, and which activities are worth it.
The best way to measure ROI? Measure multiple metrics stemming from a well-rounded marketing strategy.
Sounds simple, but most of our clients find it tricky, and for good reason. If you need help developing a plan to consistently and formally measure your marketing efforts, just ask.
We work with companies to put in place effective marketing strategies – and then measure them so their brilliant marketing teams get lots of credit!