You’re spending money on marketing your business or products. But how do you know that the marketing has worked and justified the spend? Here are some straightforward tips on How to Track and Measure Marketing ROI:
Many businesses that we work with tell us that they spend money on marketing, on both traditional and digital marketing. What is interesting is how people view the results of that marketing.
This is a true story. One marketing manager of a well known attraction told us that if they got lots of visits to their website they considered the marketing to have worked. We asked “But wouldn’t you prefer to have lots of visits to your attraction?” (silence).
Here are some ways that you can track and measure the return on your marketing spend.
#1. What Is Your Key Metric for Marketing Success?
Let me ask you: What is the bottom line for your business? “Sales of products or service you will tell me. So the bottom line for your marketing success is…? Yes, sales of products or services.
Website visits and Facebook fans are wonderful but at the end of the day, marketing is about getting people to buy your product or service. So your bottom line key metric for marketing success is generating sales.
You can of course define secondary metrics of e.g. an increase in website visits, increase in social media fans, increase in brand awareness, but these should only be there to increase the likelihood of generating sales.
#2. Calculate an Approximate Lifetime Value of Customers
Many businesses work out how many sales they made from a particular marketing campaign and if the sales were bigger than the amount they spent on the campaign they think that’s a return. But this is missing the Lifetime Value aspect of your new customers. Each new customer you win from marketing brings more than just the initial sale (hopefully if you do a good job!).
Work out how often on average your customers spend with you and the average spend to get to an approximate lifetime value. This will allow you to measure the real ROI (return on investment) on your marketing spend.
So say you are a hairdresser and your customers spend an average of 60 euros every time they come to you and over the year they come 6 times, say, and they stay with you on average for 3 years, their lifetime value is 60x6x3=1,080.
If you spend 500 euros on a marketing campaign and you get 1 new customer, this is a good return because your customer is likely to be worth at least 1,000 to you (and more if you do a good job of upselling). Whereas if you had considered it as 60 euros vs the 500 spend you might consider that a poor return.
Don’t forget as well that a new customer is a potential ambassador. If they have a good experience and tell others who come to you then this ROI is even better than you can estimate from 1 customer!
#3. Ask Where They Heard About You
Whether you are a small or a large business, wherever the opportunity arises, you should ask customers/prospects where they heard about you.
If you need to do this verbally at a front desk or reception, have a sheet that your employees can tick quickly to track sources of new customers.
If you require your customers to fill out a form, add this as a field to your form.
If you don’t ask them you can’t track your marketing and you don’t know what has worked.
#4. Make Sure You Can Track
When you run a particular marketing campaign how will you be able to track the campaign? Are you using a special discount code that people use when they come into your premises or buy something on your website?
Do you need to get employees to track? Think about how you will track the results of the campaign whether offline or online and build that into your campaign from start to finish.
If you have a particular outcome for your campaign that you can track online, for example, signed up to our mailing list / bought an item from our e-shop / booked an appointment on our scheduling page, you can set up goals on Google Analytics to track those outcomes.
#4. Use a Different Landing Page for Every Campaign
A landing page is just a new page that you use to send people to on your website. So say you are running a special offer on haircuts, then create a new page for that offer on your website and use its URL in your marketing campaign. Using landing pages allows you to
- track visits quickly and easily that are generated from your marketing campaigns
- test and refine your marketing. For example you could compare different offers and see which landing page generated more sales.
#5. Use Unique Codes for Different Offers
We ran a campaign for a service company aimed at families and when the campaign was over we asked them how it went at their end and it turned out the code they had given us to use was also being used on other websites and in the paper.
So they had no way of knowing whether the business came from our campaign or others.
#6. Analyse and Compare Different Campaigns
Keep a spreadsheet of your different marketing campaigns. Dates they ran, what format, what the offer or message was, and what it generated in terms of leads/new customers, total spend, total estimated lifetime value.
As you start to build this up, you will be able to see at a glance what is working and what is not. You’ll be able to compare campaigns even if they ran on different media.
#7. Use Google Analytics
Check your Google Analytics each time a marketing campaign runs to see what it generated in terms of visits and goals.
Head to the Behaviour Report and put in the dates of your campaign at the top right and then put in the page you want to check on e.g. your landing page. Now add a secondary dimension of the Source of those visits by clicking Secondary Dimension and click Source.
This will let you see where visits came from to your landing page.
One final phrase to always keep in mind, Customer Relationship Management. This applies to the start of the relationship just as much as during the relationship. Marketing to prospective customers is about building a relationship with that prospect to the point that they trust and like you and are happy to buy from you.
Want to find out more about how Mykidstime can help you with tracking and measuring your marketing? Contact us now.
Did you enjoy this article? Check out our other blog posts: 5 Simple Strategies for Converting Sales Leads and How to Make Your Database Marketing 100% Better Using These Simple Strategies