Measuring marketing ROI starts by asking the right question.
If a tree falls in a forest and no one is around to hear it, does it make a sound? Philosophers, scientists, and everyday people have pondered this riddle for centuries. My head hurts just thinking about it.
As business leaders and marketers, we’re not immune to being trapped in this same kind of philosophical conundrum. A Marketing Charts survey reported that 44% of B2B marketers are unsure what their current average return on investment (ROI) is for marketing. That number is staggering. Given that, perhaps the question we should start asking ourselves is, “If I don’t know if my marketing is working, why am I doing it?”
The fact of the matter is most small businesses don’t take enough time to evaluate their marketing’s effectiveness. This happens for a couple of reasons–measuring marketing ROI is hard and marketing isn’t always at the top of business leaders’ to-do lists. When things are unclear, they’re often neglected. Focus, on the other hand, provides clarity. A little attention to marketing performance goes a long way.
The answer to the proverbial “marketing tree” question can be found in four areas: Engagement, Analytics, Sales, and Surveys.
The first indication your marketing is working is if people are talking about it. According to McKinsey, word of mouth is the primary factor behind 20-50 percent of all purchasing decisions. When people are talking about your company’s presence online or otherwise, we call this “engagement.” Marketing engagement tells us how consumers directly interact with a brand. A few examples include website page views, email open rate, social media likes/clicks/shares, and blog readership. Another great tool for measuring if your product or service is generating a buzz is Google Alerts. By using marketing analytics tools, you’ll gain clarity on which marketing tactics are delivering the most bang for the buck.
If you’re wondering if your marketing is making a difference, look no further than your analytics. Marketing analytics come in many different forms—Google Analytics, MailChimp/Constant Contact email reports, Facebook/LinkedIn/Twitter social media analytics, and SEMrush/Moz search engine reports, just to name a few. Once you have the data, the next step is gleaning actionable insights and implementing recommendations based on the numbers. Begin by making a list of key performance indicators (KPIs). A good starter list of KPIs has to do with engagement and is listed above. After you’ve chosen your KPIs, determine when you’ll review your results—weekly, monthly, quarterly, or annually. There’s no magic formula. Tap into your inner habitual side and make reviewing your marketing analytics a regular occurrence.
In the 1970s, Al Hampel wrote the line that is now quoted in advertising agencies all over the world–”It’s not creative unless it sells.” The Worldwide Creative Director at Benton and Bowles believed as many marketers do that the purpose of advertising is to sell. Tying the dollars generated as a direct result of marketing efforts is the definitive measure of return on marketing investment. Popular tools for monitoring your sales pipeline include Salesforce, NetSuite, and HubSpot. Used right, these CRMs will align your sales and marketing activities to tell you if your marketing is moving the needle.
4. Surveys and Focus Groups
Once a marketing campaign is over, the real work is just getting started. Learning from what went well and didn’t is key to running better campaigns in the future. Start by reviewing the goals of your campaign. If it was to generate X number of leads, how’d you do? If you were trying to get Y number of candidates to apply for a job opening, did you hit that number? If the objective was to increase awareness, try polling customers and prospects to see if they noticed the campaign and remembered the key messages. Common ways to conduct a post-campaign survey include online surveys and focus groups.
Just like trees need sun, water, and nutrients to grow, your marketing needs attention and focus to deliver results. By monitoring these four areas, you’ll find out which marketing efforts are working and where you should invest your time and money. You’ll know once and for all if “marketing tree” makes a sound or not.