Sales and Marketing Advice
How to measure the ROI of your marketing efforts
Early in my career I sold complex mobile communication equipment and received “help” from the marketing department. That help consisted of shiny brochures and worn-out tactics that were tossed against the wall to see what might stick. It didn’t seem very effective.
How the heck was marketing earning it’s keep? Sounds like a simple question, yet the answer isn’t straightforward. That’s because there’s a lack of understanding and appreciation of the role of marketing and its impact -- in the short and long term.
Marketing has many facets: strategy, awareness building, positioning and messaging, target audience engagement, product expertise, customer training, public relations, lead generation, prospect nurturing, product launches, presentations, content creation, events, investor and analyst outreach, and much more.
There’s certainly value in all of this, but putting your finger on an exact ROI is usually fuzzy at best. Yet. one thing is an absolute -- no matter where you sit in your company, marketing affects you.
At the end of the day, your paycheck is tied to how much profitable revenue is brought in and marketing is a big piece of that equation. All of this begs the question of how to measure the ROI of your marketing efforts. Is it even possible?
What exactly are you measuring? This will vary by company and industry, yet you can count on a couple of things -- strategy always comes before measurable metrics. Your strategy is a roadmap, the yellow brick road that gets you to the endgame, your goals. Marketing initiatives are how you get there. And initiatives can be measured.
As an example; you are launching a new product and the strategy is to reach a specific or niche audience segment by establishing relationships with influencers in that sector. ("Influencers" are bloggers, journalists or industry analysts.) Your initiatives might be to (1) identify bloggers who are experts in your industry that have a large loyal audience, (2) organize events and invite them, and (3) offer them a free product or service to review. A bonus to influencer marketing is that most will cross post to their social media profiles, resulting in a much longer lifespan and further reach with viral potential. There are many aspects of a campaign like this that are very measurable.
How you measure ROI depends on your objective. For most us the bottom line goal is to track how much revenue is generated versus dollars spent. But, even the best strategies are not overnight hits and require a long view of success. That requires clear goals that can be measured accurately.
Back to our influencer strategy. instead of setting a fuzzy objective such as increasing awareness with three blogger reviews and then seeing if a rise in revenue follows, be as specific as possible. Shoot for metrics like reviews by bloggers and other influencer sites that expose your product to at least 100,000 targeted prospects within 30 days of launch. Better yet, add to this, increasing sales revenue by $5,000 in the first month, $35,000 in the second month, and $175,000 in the third -- directly attributed to the influencers. Now you’re cooking!
Tracking success, let me count the ways. It’s critical that you have a way to track what’s working (and what’s not) based on your goals. Warning: don’t drive yourself whacky trying to measure every possible metric! The tracking mechanism will differ depending on the objective, type of campaign, and your organization’s style. No matter what, keep it simple.
For influencers, ask if they’d be willing to use trackable links or imbedded tracking pixels to measure traffic and conversions on your site. You can’t buy a legitimate influencer, on the other hand they usually count on good working relationships with vendors for great content and will normally cooperate. You can also offer to give a special deal to the influencer’s readers and give them a custom coupon code. This works great with other types of channels too, along with creating branded landing pages.
When it comes to online ads, embrace A/B testing tracking as well. All of this leads to quantifiable metrics that can be tracked in Google Analytics and put into a spreadsheet to show which channels produced what revenue, compare to the cost.
When you tie your strategy and objectives to numbers, your actions are hard to ignore. There is no substitute. You’ll quickly know if your marketing campaign is profitable or not.
Do more than print a bunch of shiny brochures and toss worn-out tactics against the wall to see what sticks! The key is to execute on your plan, measure, adjust, and succeed.
Ron Stein is founder of More Customers Academy, helping business leaders build strategic messaging and positioning that cuts through the competitive noise to grow revenue. Ron has developed his own highly successful 5-step Stand Out & Sell More approach to winning new customers as a result of his twenty-five years of business development, marketing, and selling experiences. He works with a range of businesses, from startups to large corporations across industries including technology and healthcare, manufacturing, and financial services and banking. Ron conducts workshops, leads company meetings, offers keynote talks, and consults. He can be reached at 727-398-1855 or by email.