When your company is spending money on marketing activity, you want to get a good return on this investment. But, more often than not, businesses spend too little time actually analysing and scrutinising the performance of their marketing campaigns and channels.
Once you’ve invested in an expensive promotional campaign, you’ll want to know that the money is well spent. So, setting aside some time to analyse your results and establish your return on investment is not just a ‘nice to have’ – it’s an essential part of the marketing process.
Measuring success in your marketing
Knowing your return on investment (ROI) is vital if you want to make sure your marketing is truly delivering on its promise. It’s only by analysing the performance of each marketing campaign or customer event that you can get a realistic idea of whether it was a success, or a flop.
The key problem with measuring your marketing return is that the impact of good marketing goes way beyond the purely financial impact. But, as we’ll see, to gauge any specific impact on your profitability, you’re going to need to start with the financial basics.
Let’s look at key ways to analyse the impact of your marketing:
- Financial return – one way to look at your ROI is sales income minus your investment (the cost of sales and marketing). Use your accounting platform to get an idea of the income (return) generated from sales of the product/service you’re marketing. Then use this number to work out your marketing return with the following formula: ((Return – Investment) / Investment) x 100. For example, if you made 8k from sales of your new app, but spent 2k on marketing the app, this would work out as follows:
((8,000 – 2,000) / 2,000) = 300% ROI.
- Engagement and conversion return – knowing your financial ROI is vital, but it’s also important to measure the effectiveness of your marketing. In the age of digital and online marketing, this has never been easier to do. Using web analytics tools, like Google Analytics, you can measure areas such as engagement (people viewing or clicking through to your content) and conversion (people following your marketing calls-to-action). High engagement and conversion scores mean your digital marketing is being seen by the right people, and is delivering a return on your digital investment.
- Lead generation return – if your marketing is doing its job, you should see an increase in lead generation and new enquiries. Tracking and nurturing new leads and enquiries through your client relationship management (CRM) platform allows you to follow the progress of these leads. Once set up in the right way, you also see where there’s a direct correlation between your marketing and the conversion of leads into sales (and, by extension, into more revenue for the business).
- Brand reputation return – your brand is an integral part of your marketing as a business. One desired outcome of your marketing should be to raise awareness of your brand in the marketplace, and to reinforce your brand reputation with customers. Measuring the changes in brand awareness pre and post-marketing helps you to see where your investment is having an impact. Using customer feedback and trust apps, like TrustPilot, will allow you to measure how satisfied your customers are with your service levels, products and the promises you’ve made in your marketing.
No marketing strategy should ever stand still. It’s important to review your activity, look at the performance, measure your ROI and see where you can do better.
Find out which channels are delivering the best return, which target audiences are responding well to your campaigns, and which content is knocking it out of the park. Armed with this knowledge, you can refine, rethink and improve your marketing – ensuring that you improve your overall ROI over time.